Italian operator Snam has secured the renewal of two key projects in the European Union’s 2025 list of Projects of Common and Mutual Interest, ensuring fast-track permitting and priority access to public funding. The SoutH2 corridor, designed to transport hydrogen from North Africa to Central Europe, and the CO₂ network Callisto, centred around the Ravenna storage hub, are becoming structural elements in the EU’s evolving energy infrastructure.
A new regulatory framework for multi-molecule infrastructure
The revised Trans-European Networks for Energy (TEN-E) regulation now includes hydrogen and CO₂ transport infrastructure on equal footing with traditional networks. This enables both projects led by Snam to benefit from the Connecting Europe Facility (CEF), cross-border cost allocation and streamlined administrative procedures. Their re-inclusion in 2025, after a first listing in 2023, signals the EU’s continued strategic backing for these infrastructures.
The corridor is embedded in the Global Gateway programme, which aims to build long-term energy partnerships with North Africa. Algeria and Tunisia have been identified as potential suppliers of renewable hydrogen, though their exportable capacity remains limited in the near term. The EU targets 10 Mt/year of hydrogen imports by 2030, with 4 Mt expected to flow through the SoutH2 pipeline.
Project structure and industrial partners
Snam is working with European operators including TAG and Gas Connect Austria in Austria, and bayernets in Germany, on the SoutH2 corridor. Approximately 70% of the route will be based on repurposed existing gas pipelines, supplemented with new hydrogen-only segments. The Ravenna–Callisto hub, co-developed with Eni, will repurpose depleted Adriatic gas fields to create one of the largest CO₂ storage sites globally and the largest in the Mediterranean.
Phase one will begin at around 25 kt/year, scaling up to 4 Mt/year by 2030, with a potential extension up to 16 Mt/year. Callisto is designed to interconnect Ravenna with other Mediterranean injection points, including routes towards France. Snam is considering transferring its 50% stake in Ravenna into Eni’s CCS unit, shifting from a standalone CCS developer to a CO₂ infrastructure co-investor.
Capacity mismatch and ramp-up risks
Algeria and Tunisia are expected to have a combined export capacity of just 330 kt/year by 2030, representing only 8% of the SoutH2 pipeline’s potential. This mismatch raises concerns of prolonged under-utilisation, with higher unit transport costs. The corridor’s economic viability will depend on public support mechanisms such as contracts for difference (CfD) and guaranteed industrial offtake.
On the regulatory side, hydrogen infrastructure tariffs and long-term CO₂ monitoring obligations are still being defined, creating uncertainty around future regulated income. For Snam, this entails continued exposure to political and legal risks, especially in the event of CCS-related litigation.
Italy’s strategic positioning and geopolitical dimension
Italy aims to leverage its geographic proximity to North Africa to become an energy hub linking the region to Central Europe. SoutH2 aligns with this strategy, complementing the H2Med and Northern Europe corridors. Germany and Austria are diversifying import routes to avoid dependency on a single corridor, though this increases the risk of overcapacity if industrial hydrogen demand underperforms.
The EU’s explicit backing of the corridor strengthens strategic ties with the Maghreb while raising questions over new forms of energy dependency. Although Algeria and Tunisia are not under EU sanctions, political risks and internal instability remain present, especially amid heightened energy security concerns in Europe.
Economic implications for Snam
Snam’s €12.4bn investment plan includes €1.5bn for low-carbon infrastructure and €500mn for CCS, marking a clear pivot towards multi-molecule infrastructure beyond natural gas transport. The PCI/PMI status improves project bankability and supports Snam’s credit rating, but the company’s strategic flexibility is reduced due to capital concentration in a few megaprojects.
Project governance requires close coordination among transport operators, member states and industrial users, complicating financial and operational decision-making. Investor confidence will depend on Snam’s ability to secure long-term contracts and maintain a controlled risk profile in a still-developing market.
