- €4.8 Billion in Bids Submitted for the EU Hydrogen Auction, Exceeding Available Budget.
- 61 Projects Compete for €1.2 Billion in Renewable Hydrogen Funding.
- EU’s Hydrogen Auction Draws 6.3 GW in Electrolyser Capacity Proposals.
The European Hydrogen Bank’s second auction for renewable hydrogen production has attracted 61 bids from projects across 11 nations in the European Economic Area (EEA). Eight bids under the dedicated maritime category were placed by hydrogen producers with off-takers in the maritime industry, reports European Commission.
Funding Requests Exceed Available Budget
The auction elicited a record response, with over €4.8 billion in total grant support requests, four times the budget of €1.2 billion available under the Innovation Fund. The aggregate electrolyser capacity from all bids submitted amounts to approximately 6.3 Gigawatts (GWe). Cumulatively over a decade, such projects would create over 7.3 million tonnes of green hydrogen, adding to helping to meet 7% of the EU’s REPowerEU domestic renewable hydrogen by 2030 target.
U Climate Commissioner’s Statement
Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, highlighted the importance of the auction and its role in Europe’s transition to clean energy. He stated:
“The amount of bids in this second auction under the European Hydrogen Bank again shows the attractiveness of the Innovation Fund as a tool for Europe’s industrial decarbonisation and competitiveness. This continued appetite from our industry reinforces the development of a European market for clean hydrogen. As a key driver of our goal to achieve climate neutrality by 2050, hydrogen plays a crucial role in cutting emissions from hard-to-abate sectors. It will strengthen Europe’s industrial leadership in emerging clean technologies, ensuring long-term economic resilience and global competitiveness.”
Auction Mechanism and Funding Model
Renewable hydrogen producers under the Renewable Energy Directive and the Delegated Acts have provided bids for subsidization in terms of a per-kilogram premium paid upon production over periods of up to 10 years. This is intended to provide a bridge covering the difference between the costs incurred in hydrogen production and what producers can sell to customers.
Moreover, EU Member States can also avail themselves of the “Auctions-as-a-Service” mechanism whereby national governments can finance additional amounts for shortlisted projects within the ambit of EU State Aid regulations. Spain, Lithuania, and Austria have already joined this scheme, pledging all up to €836 million in national contributions as announced in November 2024. The Commission has invited other Member States to avail themselves of this facility to further enable clean hydrogen projects.
Next Steps in the Auction Process
The European Climate, Infrastructure and Environment Executive Agency (CINEA) is examining the bids received against the qualification requirements set in the call text of the auction. Qualified bids will then be ranked in descending order of their bid price. Results of the evaluation are anticipated to be released by the end of May 2025, upon which winners will be asked to prepare and sign the agreed Grant Agreements.
Grant Agreements are expected to be executed by November 2025 latest. Upon signature, the shortlisted projects shall have a period not exceeding 2.5 years to achieve financial close and must commence renewable hydrogen production within five years. The successful projects shall be provided with a fixed premium subsidy for 10 years subject to them complying with the certification and verification requirements of renewable hydrogen production.
European Hydrogen Bank and the Innovation Fund
The European Hydrogen Bank was created to finance the EU’s ambition to raise domestic production and imports of renewable hydrogen. It will spur private investment by bridging funding gaps, linking producers with consumers, and helping the EU achieve its target of incorporating 20 million tonnes of hydrogen into the energy mix by 2030.
The Innovation Fund is a central part of this effort, with a forecasted revenue of €40 billion from the EU Emissions Trading System (EU ETS) between 2020 and 2030. Its main purpose is to create financial incentives for businesses and public authorities to invest in innovative net-zero technologies that will enable Europe to become climate-neutral.
Inaugural Hydrogen Auction
For its inaugural hydrogen auction in 2023, the Innovation Fund provided €694 million worth of grants to six Renewable Fuels of Non-Biological Origin (RFNBO) production projects that employ renewable electricity to produce hydrogen according to the EU’s sustainability criteria. In addition to hydrogen, the fund has granted over €12 billion of financial assistance to more than 200 projects across different sectors to drive innovation in clean energy technologies.
Continuing Funding Opportunities
Two significant funding opportunities under the Innovation Fund are ongoing until April 24, 2025. The Innovation Fund 2024 Call for Net-Zero Technologies (IF24Call), with a budget of €2.4 billion, will finance decarbonization projects of all scales. It also addresses manufacturing parts for renewable energy, energy storage systems, heat pumps, hydrogen production, and pilot projects.
The Battery Call (IF24Battery) is worth €1 billion and will be used to finance projects centred on new battery cell production for electric vehicles through innovative technologies and the adoption of cutting-edge manufacturing technologies. Both programs are poised to play significant roles in accelerating Europe’s shift towards clean energy, increasing industrial competitiveness, and promoting economic resilience in a net-zero economy.
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Source: European Commission
