These national subsidies, aligned with the European Hydrogen Bank auction scheme, will fund projects in Spain that were pre-selected in the second EU bidding round but left out due to the exhaustion of the EU budget.
The Council of Ministers has approved, at the request of the Ministry for the Ecological Transition and the Demographic Challenge (MITECO), the allocation of €377 million to the Auction-as-a-Service (AaaS) mechanism to finance renewable hydrogen production in Spain. Funded through NextGenEU under the Recovery, Transformation and Resilience Plan (PRTR), this amount will subsidize pre-selected projects from the second general auction of the European Hydrogen Bank that did not receive EU aid due to the exhaustion of the available budget.
The approved Royal Decree launches Spain’s first national AaaS auction and sets the definitive amount that MITECO will allocate to support green hydrogen initiatives on Spanish soil. These projects were previously endorsed by the European Commission last May but excluded from EU grants. The AaaS mechanism opens a path to rescue these projects, selected by the European Commission, using national funds.
These domestic subsidies will be awarded directly by the Institute for Energy Diversification and Saving (IDAE), based on the ranking established in the second EU auction managed by the European Climate, Infrastructure and Environment Executive Agency (CINEA).
The incentives will be structured as grants for the production of certified 100% renewable hydrogen – RFNBO, according to the Renewable Energy Directive – for a maximum of 10 years from the start of operations. Projects must comply with the “Do No Significant Harm” (DNSH) principle throughout all stages. It is the first time in Spain that aid is granted not for asset investment, but for renewable hydrogen production.
High competitiveness
The latest auction from the European Hydrogen Bank, closed just over a month ago, highlighted Spain’s strong presence and competitiveness in advancing renewable hydrogen as a key energy vector for decarbonizing industrial sectors and heavy transport. More than half of the projects selected and funded by Brussels are based in Spain; the rest are located in Germany, Finland, Norway, and the Netherlands.
Now, with the first national AaaS auction in Spain, additional domestic projects that had been waitlisted may receive funding from PRTR resources. This way, the European Hydrogen Bank auctions and national AaaS mechanisms from participating countries generate synergies that facilitate project selection, cost efficiency, and administrative agility. They also help coordinate EU and national support mechanisms to boost advantages in a competitive European environment.
Accelerating the energy transition
Spain joined this European Innovation Fund and Hydrogen Bank scheme in November last year to access an additional tool to finance renewable hydrogen production domestically. The scheme provides fixed-per-kilogram subsidies to bridge the gap between production costs and market prices in an underdeveloped continental hydrogen market.
This represents another step in the Government’s strategy to promote green hydrogen as an accelerator of the energy transition, particularly in industrial and transport sectors, and to develop the entire associated value chain. It complements MITECO’s broad range of investment support lines through IDAE – such as H2 Pioneers, H2 Value Chain, H2 Valleys, and the IPCEIs Hy2Tech, Hy2Use, and Hy2Move – aiming to make green hydrogen a key pillar of Spain’s energy policy.
To support the development of this energy vector and create a comprehensive industrial ecosystem around it, more than €3 billion in PRTR grants have already been launched, including funds from the REPowerEU Addendum.
