The European Commission has announced 15 renewable hydrogen production projects that will be publicly funded across the European Economic Area. As envisioned, the projects located in five countries (Spain, Finland, Germany, the Netherlands, Norway) will produce a total of nearly 2.2 million tons of renewable hydrogen over ten years, avoiding emissions of more than 15 million tons ofCO2. The projects will receive a total of €992 million in funding from the EU’s Innovation Fund. The funds for this come from the Emissions Trading Scheme (ETS).
European Hydrogen Bank auctions
These 15 projects were selected during the second European Hydrogen Bank (EHB) auction, which received a total of 61 bids. They were evaluated by the European Climate, Infrastructure and Environment Executive Agency (CINEA) on the basis of eligibility criteria, and all bids that passed the review were ranked according to their bid price, and the 15 projects were selected on this basis.
The second auction under the European Hydrogen Bank reaffirmed member states’ commitment to building a robust renewable hydrogen market in Europe and underscored its importance in achieving climate neutrality in a competitive and cost-effective manner.
We wrote about the first EHB auction, for which the European Commission has allocated nearly 720 million euros, in a previous article: Will hydrogen be cheaper? EC to allocate nearly 720 million euros for hydrogen production .
The European Hydrogen Bank’s auctions are helping to increase the share of renewable hydrogen in the energy mix, which in turn is helping to replace natural gas, coal and oil in sectors where decarbonization is difficult, and in the transportation sectors. Producing more renewable hydrogen will reduce the continent’s consumption of fossil fuels, increase the EU’s energy independence and have a positive impact on security, jobs and the decarbonization of industry.
Of the selected projects, 12 are involved in renewable hydrogen production with fixed support ranging from €0.20 to €0.60 per kilogram. For the first time, the auction provided a special budget for hydrogen producers with offshore customers. The hydrogen produced by the project is used by recipients to run or use bunkering operations. This led to the selection of three bids, which received grants of 96.7 million euros. The projects will demand between €0.45 and €1.88 per kilogram. Each grant for the 15 selected projects ranges from €8 million to €246 million over a period of up to 10 years.
The authors of the selected projects will be asked to prepare a grant agreement from the European Executive Agency for Climate, Infrastructure and Environment. The documents will be signed by September or October 2025.
As announced in the Clean Industrial Deal, the third auction of the European Hydrogen Bank is scheduled for the end of 2025. Its budget could reach €1 billion.
The European Commission, as announced, will soon launch a hydrogen mechanism within the European Hydrogen Bank. This online platform will connect buyers and sellers and enable market participants to exchange information and find potential trading partners.
Production of renewable hydrogen under national funding
Some countries, such as: Spain, Lithuania and Austria, will allocate €836 million in funding for projects through the Auctions-as-a-Service function in order to increase hydrogen production. Through this measure, member states can identify and finance eligible projects in their territories if they meet the auction criteria but have run out of funds.
The European Commission is encouraging the use of the Auction as a Service measure, open to all member states, which allows them to use the auction platform at the EU level and grant national funding to additional projects covered by the simplified procedure.
European Hydrogen Bank
The European Hydrogen Bank facilitates the domestic production and import of renewable hydrogen, which qualifies as renewable fuels of non-biological origin (RFNBO). This means it is produced using electricity from renewable sources and meets EU sustainability criteria. In doing so, it supports the EU’s goal from the REPowerEU plan to produce 10 million tons of domestic renewable hydrogen by 2030. It aims to unlock private investment in the EU and third countries by addressing investment challenges, closing the financing gap and connecting future renewable hydrogen suppliers with consumers.
