The fourth European Hydrogen Bank auction will offer €500m ($572m) in subsidies, down more than 60% from previous budgets, with funding split between green and low-carbon electrolytic hydrogen.
With bidding set to open later this year, draft terms published by the Commission show the auction’s core design remains largely unchanged, with production subsidies of up to €4/kg ($4.58) available for 10-years.
However, dedicated funding baskets for maritime and aviation, seen in previous rounds, have been removed. Those sectors had previously received ring-fenced funding aimed at accelerating hydrogen uptake in hard-to-abate transport industries.
Instead, €350m ($400m) will be available for green hydrogen produced in line with the bloc’s renewable fuels on non-biological origin (RFNBO) rules, with a €150m ($172m) basket open to RFNBO or low-carbon electrolytic hydrogen.
Previous auctions have seen a high proportion of selected projects fail to reach grant agreements, prompting criticism that the auction encourages unrealistically low bids.
Despite those concerns, successful projects in the fourth auction must still reach financial close within two-and-a-half years of signing funding agreements and enter operations within five years.
New tie-break rules would prioritise projects requesting less grant funding, projects from countries that have received less Innovation Fund support, and those expected to begin operating sooner.
Previous auctions have seen a high number of selected projects drop out of grant negotiations, with many voices suggesting the structure encourages bidding with uncompetitive prices.
The latest round selected nine projects representing 1.1GW of capacity, with subsidy prices between €0.44 ($0.50) and €3.49 ($3.99) per kilogramme.
The poor conversion rate has limited actual spending. Although the second auction allocated €1.2bn ($1.37bn), only €270.6m ($309.5m) was ultimately awarded after projects dropped out of grant negotiations.
