More than €1 billion awarded to European hydrogen projects under EU auction

The European Commission has awarded more than €1 billion in funding to nine hydrogen production projects across Europe, in a move aimed at accelerating the bloc’s clean energy transition, strengthening industrial competitiveness and reducing emissions in hard-to-abate sectors.

The projects, selected under the third auction of the European Hydrogen Bank (EHB), are located in seven countries within the European Economic Area and are expected to deliver nearly 1.1 GW of electrolyser capacity.

Over their first decade of operation, the projects are projected to produce more than 1.3 million tonnes of hydrogen while avoiding around 9 million tonnes of CO2 equivalent emissions. Funding will come from the EU Innovation Fund, financed through the EU Emissions Trading System (ETS), with total support amounting to approximately €1.09 billion.

The initiative is designed to help bridge the gap between production costs and market prices for renewable and low-carbon hydrogen through fixed subsidies awarded via a competitive bidding process. According to the European Commission, the selected projects will receive support ranging from €0.44/kg to €3.49/kg of certified hydrogen produced, for a maximum period of 10 years.

Among the projects selected under the renewable hydrogen fuels of non-biological origin (RFNBO) category are developments in Greece, Spain, Denmark and Austria. Denmark secured two of the largest projects in the category, including the 300 MW “NJK” project led by MorGen and the 100 MW “ALBA” project developed by Hy2gen Nordic AS.

In the low-carbon hydrogen category, Finland’s “Cloudberry” project, coordinated by Vetyalfa Oy, received the largest allocation, with 500 MW of electrolyser capacity and expected emissions reductions of approximately 3.5 million tonnes of CO2 equivalent over 10 years. Germany’s “Lotse” project was also selected.

The auction additionally included a dedicated maritime and aviation segment, with two Norwegian projects — “Gen2-LH2” and “RogalandH2” — securing funding to support hydrogen supply for the transport sector.

The European Commission said the auction mechanism is intended to maximise greenhouse gas reductions while ensuring cost efficiency through market-based competition. Projects were ranked according to the subsidy level requested per kilogram of hydrogen produced.

Alongside EU-level funding, Spain and Germany are participating through the “Auctions-as-a-Service” mechanism, contributing an additional €1.7 billion in national funding to support projects located within their territories. Germany will provide up to €1.3 billion for RFNBO hydrogen production, while Spain will allocate up to €440 million. Under this mechanism, projects that were not selected due to Innovation Fund budget limitations but rank highly in the auction process may still receive national funding support.

The Commission indicated that three projects in Spain and three in Denmark could benefit from this approach. The EU sees renewable and low-carbon hydrogen as a key pillar of its strategy to decarbonise energy-intensive industries, reduce dependence on imported fossil fuels and strengthen Europe’s long-term energy security.