EU awards €720m in first European Hydrogen Bank auction

The European Commission is awarding nearly €720 million ($774 million) to seven renewable hydrogen projects in Europe, selected through the first competitive bidding process under the European Hydrogen Bank.

The winning bidders will produce renewable hydrogen in Europe and secure funds per kilogram of hydrogen produced (Kg/H2).

The funds will be sourced from the EU Emissions Trading System (Innovation Fund), bridging the price gap between current production costs and the price that hydrogen offtakers are ready to pay.

The premium requested by the awarded project promoters ranged between €0.37 and €0.48 per Kg/H2 – well below the €4.5 ceiling price – for projects located in Spain (3), Portugal (2), Norway (1) and Finland (1).

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The seven selected projects were the winners of an oversubscribed auction which attracted 132 bids in total. Together, the winning bidders plan to produce 1.58 million tonnes of hydrogen over ten years, avoiding more than 10 million tonnes of CO2 emissions.

The hydrogen they produce will be used in sectors such as steel, chemicals, maritime transport and fertilisers.

The seven selected projects will now start preparing their individual grant agreements with the European Climate, Infrastructure and Environment Executive Agency (CINEA). These agreements are expected to be signed by November 2024 at the latest.

Selected projects will have to start producing hydrogen within a maximum of 5 years after signing the grant agreement. They will receive the awarded fixed premium subsidy for up to 10 years for certified and verified renewable hydrogen production.

The Commission plans to launch a second European Hydrogen Bank auction by the end of this year. It will draw on the lessons learned from this pilot auction and also further consult stakeholders before launching the next auction.

Kadri Simson, EU commissioner for Energy commented: "The EU is becoming a hub for clean technologies. The results of the first auction of the European Hydrogen Bank prove the high interest from European industry to produce and use hydrogen on our continent.

"The selected projects will help us to deliver the EU’s 2030 energy and climate targets, while creating new opportunities for green jobs and skills. The second hydrogen bank auction later this year is another exciting opportunity for European industry and I hope to see similar interest then."