The European Union has awarded more than €1 billion in funding to nine hydrogen production projects across Europe
The funding has been provided through the European Hydrogen Bank’s third auction and is designed to accelerate the EU’s transition away from fossil fuels and strengthen energy independence.
The selected projects are spread across seven countries in the European Economic Area and are expected to deliver nearly 1.1 gigawatts of electrolyser capacity.
Over their first decade of operation, the selected projects are expected to produce more than 1.3 million tonnes of renewable and low-carbon hydrogen, while also preventing around 9 million tonnes of carbon dioxide emissions.
The funding comes from the EU Innovation Fund, which is financed through the EU Emissions Trading System. The hydrogen produced will mainly support heavy industries such as chemicals, shipping and transport. These sectors are often the hardest to decarbonise.
Denmark and Finland lead major projects
Among the largest successful projects is the Cloudberry development in Finland, coordinated by Vetyalfa Oy. With a planned 500 MW capacity, it is expected to produce more than 500,000 tonnes of hydrogen over ten years and avoid roughly 3.5 million tonnes of emissions.
Denmark also secured major funding through two large-scale projects. MorGen’s NJK project will develop a 300 MW facility capable of producing 445,000 tonnes of hydrogen, while Hy2gen Nordic’s ALBA project will add another 100 MW of capacity.
Smaller projects were also selected in Greece, Spain and Austria under the renewable hydrogen category, helping broaden the geographic spread of Europe’s hydrogen infrastructure.
Support for maritime and aviation fuels
For the first time, the auction included a dedicated funding stream aimed at hydrogen producers supplying the maritime and aviation sectors. Two Norwegian projects (Gen2-LH2 and RogalandH2) were selected under this category.
These projects received some of the highest subsidy rates due to the higher costs of producing hydrogen for the shipping and aviation fuel markets. Together, they are expected to produce more than 35,000 tonnes of hydrogen over ten years.
The subsidies awarded through the auction range from €0.44 to €3.49 per kilogram of hydrogen produced. The support mechanism is intended to bridge the gap between production costs and current market prices, making clean hydrogen projects commercially viable during the industry’s early growth phase.
Competitive auction process
The projects were selected through a competitive bidding system that ranked applicants according to the level of financial support requested per kilogram of hydrogen produced. Lower-cost projects received priority until the available budget was exhausted.
The third auction attracted 58 bids from 11 countries, with demand exceeding the available funding by more than six times. This strong interest reflects growing momentum behind Europe’s hydrogen sector as governments and industries seek alternatives to fossil fuels.
Additional national funding
Germany and Spain are also contributing additional national support through the EU’s “Auctions-as-a-Service” mechanism. Together, the two countries are making a further €1.7 billion available for hydrogen projects within their territories.
Germany plans to allocate up to €1.3 billion for renewable hydrogen production, while Spain will provide up to €440 million. Several projects on the reserve list may still receive backing through these national funding programmes.
Grant agreements for the selected projects are expected to be finalised by the end of 2026. Developers will then have 2.5 years to secure financing and up to 5 years to begin operations.
