European Hydrogen Bank Awards €720m to 7 Hydrogen Projects
On 30th April, the European Commission (EC) awarded nearly €720m to seven renewable hydrogen projects in Europe. They were selected through the first competitive bidding process under the European Hydrogen Bank (EHB).
The renewable hydrogen will be used in steel, chemicals, maritime transport and fertilisers
The funds for this auction came from the revenues of the EU Emissions Trading System. The winning bidders will produce renewable hydrogen in Europe. They will receive a subsidy to bridge the price difference between their production costs and the market price for hydrogen, which non-renewable producers currently drive.
Therefore, the EHB contributes to the scale-up of cleaner fuels and the decarbonisation of European industry. Their renewable hydrogen will be used in sectors such as steel, chemicals, maritime transport and fertilisers.
The 7 selected projects were the winners of an oversubscribed auction which attracted 132 bids. The winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO2 emissions.
The selected projects are located in 4 European countries. They submitted bids between €0.37 and €0.48 per kilogram of renewable hydrogen produced. The subsidy the 7 projects will receive ranges from €8 million to €245 million.
These are the selected projects:
€350 million in national funding has been made available for the highest-ranked projects in Germany which did not qualify for EU-level support, but which do meet the eligibility criteria. The German authorities will select and communicate the winning projects.
The “Auctions-as-a-service” scheme is open to all Member States, enabling them to benefit from the EU-level auction platform and award national funding to additional projects. The EC invites other Member States to take advantage of this service for future auctions.
The selected projects must start producing renewable hydrogen within 5 years
The seven selected projects have started preparing 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 must start producing renewable hydrogen within 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 EC plans to launch a second EHB auction by the end of this year. It will draw on the lessons learned from this pilot auction and further consult stakeholders before launching the next auction.
The Innovation Fund is the EU’s largest funding programme for deploying innovative net-zero technologies. The budget is estimated at €40 billion from the revenues of auctioning allowances under the EU Emissions Trading System between 2020 and 2030.
The EHB was announced by President of the EC Ursula von der Leyen in her State of the European Union address in 2022. It is an initiative to facilitate the EU’s domestic production and imports of renewable hydrogen. The EHB aims to unlock private investment in the EU and third countries by:
- addressing investment challenges,
- closing the funding gap,
- connecting future renewable hydrogen supply to consumers.
The first auction of the EHB received 132 bids from 17 European countries requesting over 15 times the available €800 million budget. 119 proposals were found to be eligible and admissible. They were then ranked according to their bid price, and evaluated by the CINEA.
