German Economy Ministry Robert Habeck said on Tuesday Germany and the European Commission have made progress in "intensive" talks about funding new hydrogen and gas power plants.

The two sides set out guidelines for national hydrogen and gas plant subsidies to comply with European Union energy aid legislation.

"We achieved important progress," Habeck said.

But he stressed, "it does not mean that the intended measures have already been approved."

The European Commission said talks with Berlin would continue.

"Beyond that, we can neither comment on the content of these contacts nor predict their outcome or timetable," a spokesperson added.

Why are the talks important?

Germany is aiming to be almost entirely powered by renewable energy by 2035.

To achieve this, the government wants to build new hydrogen and gas-fired power plants to supplement renewables at times of year when wind and solar generation is insufficient.

Financial aid to build such plants must be authorized by the European Commission.

Berlin wants to tender 8.8 gigawatts of new plants that would run on hydrogen from the outset, plus a further 15 gigawatts of power plants that would temporarily run on natural gas until they are connected to the hydrogen grid.

The European Commission reportedly believes it would be problematic to fund the latter power plants under its decarbonization plants because gas plants emit greenhouse gasses. This means just the hydrogen-only plants would qualify under the scheme.

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zc/lo (dpa, AFP)