The second auction of the European Hydrogen Bank (IF24), led by the European Commission, awarded €992 million to 15 projects across five countries, with Spain emerging as the standout. Eight of these initiatives —more than 50% of the total— will be developed on Spanish soil, securing €292 million and 891 MW of installed capacity, equivalent to 38% of the total awarded output.
The selected projects will receive a fixed premium of between €0.20 and €0.60 per kilogram of renewable hydrogen produced over a 10-year period. Unlike the pilot auction, this round introduced stricter requirements for technical and financial maturity, lowered the price cap to €4/kg, and applied supply chain resilience criteria.
“This only reaffirms Spain’s privileged position. Cheap renewables are the best incentive for the sector’s development,” states Javier Robador, Manager of Asociación Castellano y Leonesa del Hidrógeno, commenting on the outcome.
Beyond the volume awarded, industry experts speaking to Strategic Energy Europe agree that the current framework faces fundamental limitations: green hydrogen remains commercially unviable.
“€0.60 per kilo brings you closer, but it’s not enough to break even,” says independent advisor Marcos Rupérez. He estimates the gap between production cost and market price can exceed €2 per kilo, placing projects at risk unless complemented by other revenue streams or binding mandates such as FuelEU Maritime or SAF.
According to Robador, the average incentive “will represent about 10% of the price”, which, while not bridging the gap, “could support decision-making”.
Still, he warns: “Financial closure will depend on consumer expectations and the medium-term strategies of the project developers.”
Spanish leadership: a strength and a stress test
Spain’s dominance is not limited to funding volume — it also reflects its regulatory maturity and technical expertise.
“We are absolutely delighted with the selected projects,” highlights Mayte Gutiérrez Rosselló, General Manager of Asociación Gallega del Hidrógeno (AGH2). She adds that this will enable “faster, more efficient development of hydrogen valleys”, inspiring confidence among new promoters.
She also points out that the auction “positions the region as one of the country’s key players” in hydrogen production and energy transition.
But national leadership also raises a critical question: is the infrastructure in place to support this momentum? Robador warns that “its absence will cause major logistical issues, particularly for large-scale projects.”
The head of Asociación Castellano y Leonesa del Hidrógeno refers mainly to the lack of distribution networks, storage facilities, and access to large industrial offtakers. In his view, high-capacity projects —such as those awarded in this round— require robust connections for both hydrogen evacuation and integration into complex supply chains.
“If no pipelines or suitable port infrastructure exist, developers will be forced to rely on more expensive and inefficient solutions like road transport or pressurised container storage, which severely undermines the model’s competitiveness,” Robador warns.
This infrastructure gap, combined with tight deadlines for financial close and start of operations, adds pressure on developers and may hinder the timelines, particularly in regions where spatial planning and service networks are still in early development.
Looking ahead: proposals for the third auction
The next round of EU hydrogen auctions is set for late 2025, and specialists agree that both technical and financial conditions must be improved to attract real private investment.
“We should focus on the end-user and incentivise industrial demand,” Robador suggests, also calling for more flexible timelines for large projects and reduced initial guarantees for smaller ones. He further supports maintaining the 25% cap on Chinese components to stimulate the European value chain.
Rupérez, on the other hand, proposes a more radical overhaul: fund fewer, smaller projects with stronger financial support.
“I would ensure every company can test the technology through real-scale pilot projects,” he asserts, arguing that the current model benefits large players without ensuring broader market deployment.
Gutiérrez Rosselló agrees, adding that while major players are initially needed to drive the sector, “others must gradually be brought in, which requires more inclusive access conditions so the entire ecosystem can move forward.”
She acknowledges, however, that “the current criteria exclude companies without sufficient financial muscle.” For the AGH2 executive, low subsidy levels are part of the problem.
In this context, Rupérez is blunt: referring to past corporate decisions —including from firms like ArcelorMittal— he warns that “there is no guarantee developers will ultimately accept these grants if project profitability does not improve.”
Beyond funding: the urgency of building a real market
Ultimately, all stakeholders agree that the key lies not just in subsidies, but in creating structured demand.
“Production cannot keep expanding if consumption does not also develop,” insists Gutiérrez Rosselló. For this to happen, she believes support schemes must target consumers, not just producers.
Robador also emphasises the lack of regulatory certainty: “We need a stable and favourable regulatory framework. At present, the delegated acts are not providing that,” he asserts. Without it, he argues, it will be difficult to advance towards a sustainable system based on long-term purchase agreements and private investment.
The auction confirms Spain’s leadership, but also reveals the structural weaknesses of the European model. Until green hydrogen becomes cost-competitive, infrastructure gaps are closed, and a solid market emerges, investments will remain dependent on public schemes.
