The European Commission (EC) has approved a €122 million aid measure to be granted by Lithuania to support the decarbonisation of AB ,,Achema“ fertiliser production.

The measure will contribute to achieving the objectives of the European Union's (EU) Hydrogen Strategy, the European Green Deal and the Green Deal Industrial Plan, the EC said in a statement. It should also help to eliminate dependence on Russian fossil fuels.

„This €122 million facility allows Lithuania to help AB „Achema“ to increase its capacity for hydrogen from renewable energy sources and for low-carbon footprint hydrogen. This will contribute to the greening of the fertiliser value chain, in line with the EU's goal of climate neutrality by 2050. At the same time, the measure ensures that potential distortions of competition are kept to a minimum," the report quotes Margrethe Vestager, Executive Vice-President of the EC responsible for competition policy, as saying.

The aid will reportedly take the form of a direct grant to support the installation of a 171 MW alkaline electrolyser at the AB „Achema“ plant in the Kaunas region.

The notification highlights that AB „Achema“ currently uses hydrogen from natural gas to produce ammonia – the main raw material for fertiliser production –. The electrolysis plant will produce hydrogen from renewable energy sources and low carbon footprint hydrogen, which will then be used to produce ammonia.

The hydrogen produced by this plant is expected to replace 30% of the hydrogen currently produced from natural gas, reducing carbon dioxide (CO2) emissions and reducing the demand for natural gas.

The electrolyser is expected to be operational in 2026. The project is expected to avoid nearly 6 million tonnes of CO2 emissions over the 19 years of the plant's expected lifetime.