Jorgo Chatzimarkakis, CEO of Hydrogen Europe, discusses the recent results of the European Hydrogen Bank auction and what they mean for Europe’s hydrogen sector.
At the end of May 2025, the European Commission published the results of the second European Hydrogen Bank (EHB) auction. A total of €992m in public funding was awarded to 15 renewable hydrogen projects, which are expected to collectively produce 2.2 million tonnes of hydrogen over the next decade and avoid roughly 15 million tonnes of CO₂ emissions. This announcement represents more than just a headline-worthy figure. It signals that the EU is beginning to translate hydrogen ambition into actual investment, placing climate targets, energy resilience, and industrial competitiveness on firmer ground.
The results show a clear evolution in the geographic and sectoral distribution of projects. Spain leads with eight selected projects, while Germany and the Netherlands appear for the first time, suggesting a growing appetite and potentially greater willingness to invest in or pay for renewable hydrogen in these countries. Finland is also represented, and Norway was awarded all three maritime projects. Each project received funding ranging from €8m to €246m over ten years, depending on their scale, complexity, and projected output.
Low premiums
One of the most discussed features of the auction was the low premium level requested by most of the winning general projects – below €0.50 per kilogram of hydrogen. While this figure aligns with bids from the first auction held in April 2024, it should be interpreted with care. It may indicate growing experience and efficiency in the sector, a high level of competition among project developers, and a limited available funding environment.
Hydrogen in the maritime sector
In the maritime window, the subsidies awarded were significantly higher, reaching up to €1.88 per kilogram. This reflects more closely the true level of support required in the capital-intensive shipping sector where technological maturity is lower, infrastructure is scarcer, and the operational challenges are greater. Hydrogen-based fuel alternatives for shipping remain one of the most efficient decarbonisation pathways for the maritime sector, but require massive investments to be available at scale. Encouragingly, these bids are more in line with what’s needed to make production projects viable, especially as the International Maritime Organisation (IMO) continues to raise its climate ambitions and call for the adoption of low-emission fuels.
But while the direction is promising, using hydrogen-based fuels in the maritime sector is still far from bankable at scale. There are still major gaps between policy and regulatory ambition, technological readiness, and the financial certainty required by investors. For projects to move forward, clearer regulations, stronger demand signals, and continued public support are needed to transform these early-stage projects into true market transformation.
Scaling up Europe’s hydrogen sector
If all selected projects from the second auction reach Final Investment Decision (FID), Europe’s committed electrolyser capacity could increase from 2.7 GW to nearly 5 GW. While the scale may still fall short of what is needed to meet the EU’s 2030 climate targets, it signals that the Hydrogen Bank can play a meaningful role in accelerating deployment. Its long-term potential will depend on how its impact is scaled and supported in the broader policy and investment landscape – and whether it becomes part of a more coherent, long-lasting policy framework.
But this goes beyond funding numbers. What the Hydrogen Bank represents is an emerging model of industrial policy in the EU – one that puts decarbonisation, energy resilience, and economic competitiveness on equal footing. This is not just about meeting emissions targets. It is about making sure European industry stays ahead in the global race to scale clean technologies.
Auction-as-a-Service
One notable strength of the European Hydrogen Bank framework is the emerging ‘Auction-as-a-Service’ model. While distinct from the EU-level auctions, this mechanism is designed to complement them by enabling national governments to organise their own hydrogen auctions under a harmonised EU-supported structure, supported by EU-level co-ordination. By providing a common set of guidelines, evaluation criteria and technical support, the model helps streamline how auctions are conducted across Member States. This brings structure by ensuring consistency in design, transparency through shared rules and open competition, and competitiveness by lowering entry barriers and encouraging more project developers to participate under clear and predictable conditions. It’s a step toward a more coherent and efficient European hydrogen support system.
Through the main European Hydrogen Bank auction, the fixed premium per kilogram of renewable hydrogen produced helps narrow the cost gap between green hydrogen and its fossil-based counterparts. This core mechanism of the EHB – not to be confused with the complementary Auction-as-a-Service model – provides direct EU-level support to early-stage projects. It sends a clear signal: when public funding is well-targeted, it can lower production costs and bring projects closer to viability. This is not a blank cheque, but a carefully designed incentive to generate momentum where it’s most needed.
Resilience criteria
Another crucial evolution introduced for the upcoming third auction is the addition of resilience criteria aimed at strengthening Europe’s strategic autonomy. Specifically, to meet the resilience threshold, projects must ensure that no more than 25% of the electrolyser stack capacity (measured in megawatts electrical [Mwe]) – including surface treatment, cell unit production and stack assembly – is sourced from China. This requirement reflects the EU’s growing concern about over-reliance on a single supplier country, given China’s current dominance in global electrolyser manufacturing. While this is only a first step, it signals a deliberate move toward greater supply chain diversification. Moreover, compliance with European and international safety and cybersecurity standards will be mandatory, reinforcing quality and operational security. These criteria represent more than technical conditions – they are a recognition that Europe’s hydrogen strategy must also support industrial resilience and foster domestic and allied manufacturing in critical technologies.
Commercial growth
The auction results also revealed encouraging signs of commercial maturity. Several winning projects have reported progress in securing offtake agreements and identifying electrolyser suppliers, critical factors in achieving final investment decisions and attracting financing. For instance, EnBW’s FUELLA project in Norway – awarded in the first Hydrogen Bank pilot auction – has already secured an offtake agreement with EnBW for 100,000 tonnes of green ammonia annually starting in 2027. In another notable case, Spain’s DH2 Energy (a second-auction winner) has launched its own offtake auction: later this year, industrial buyers will compete to secure 1,700 tonnes of hydrogen annually from DH2’s 35 MW green hydrogen facility. These project examples demonstrate real-world commercial arrangements and supply chain partnerships – not just theoretical capacity. They show that hydrogen deployment is becoming a grounded ecosystem of producers, offtakers and technology providers, setting a stronger foundation for investment and implementation. These developments show that hydrogen deployment is about establishing real-world connections between producers, consumers, and technology providers.
Reflections and future plans
Looking back at the second European Hydrogen Bank auction, the projects were awarded in May 2025. The only remaining step in this cycle is the signature of grant agreements, expected by October 2025. In parallel, preparations are already underway for the third auction. A call for feedback on the Terms and Conditions is expected in August 2025, with finalisation anticipated in early autumn. The third auction is set to officially open in December 2025, and results are expected in the second quarter of 2026. Project developers should begin preparing documentation well in advance to meet the deadlines of this next call.
Several questions deserve closer attention. First, how many of the winning projects will actually reach final investment decision with the support currently offered? Second, should future auctions include more targeted baskets for sectors like aviation or steel, which also face high abatement costs and limited alternatives? Third, did cumulation rules – restrictions on stacking different forms of public support – deter potential applicants? And fourth, is the current 8% completion bond sufficient to discourage speculative bidding and ensure follow-through?
The Hydrogen Bank does not exist in isolation. Its future is linked to the broader landscape of industrial decarbonisation policy in Europe. The forthcoming Industrial Decarbonisation Accelerator Act is expected to provide more detailed support for lead markets across energy-intensive sectors. Meanwhile, the Industrial Decarbonisation Bank, planned for launch in 2026, will likely become a central platform for aligning finance with strategic industrial goals. Together, these instruments could turn hydrogen deployment from a project-by-project effort into a more co-ordinated ecosystem.
All of this is unfolding within a global context where competition is intensifying. Countries like China are far ahead in electrolyser manufacturing and project deployment. Others, like Japan, Chile, and Australia, are also scaling their hydrogen strategies rapidly. Europe has been a leader in setting ambitious targets and designing innovative support mechanisms. However, compared to some international peers, EU funding remains relatively limited. To maintain its leadership and shape the global hydrogen economy, Europe will need to match its policy ambition with long-term investment at scale.
Hydrogen Europe congratulates its members whose projects were selected in the second auction. But more than a celebration, this is a moment for critical reflection and renewed commitment. The Hydrogen Bank has shown that public support, when well-structured, can bring projects to the edge of realisation. But success won’t come from a few auctions alone. What is needed now is long-term visibility, industrial co-ordination, and a funding landscape that reflects both the urgency and the scale of the challenge.
The transition to a clean energy economy will not happen through ambition alone. It will require structure, investment, and political clarity. With this latest auction, Europe has taken another strong step in the right direction.
Now is the time to keep the pressure on – and fuel the future with hydrogen!
Please note, this article will also appear in the 23rd edition of our quarterly publication.
