Hydrogen Bank terms and conditions for second auction published
The European Commission has released the anticipated Terms and Conditions (T&Cs) for the second auction of the European Hydrogen Bank. They are allocating an additional €1.2 billion to support the production of RFNBO hydrogen.
The Commission has set a €4 per kilogram price cap, a five-year timeline for project commissioning, and a two-and-a-half-year deadline to reach a final investment decision. Hydrogen Europe’s large and diverse membership explicitly sought these terms, almost unanimously. Meanwhile, introducing mandatory resilience criteria for the next call will greatly aid the push towards a more resilient, industrialised, and energy-secure Europe.
Hydrogen Europe commends numerous aspects of the new auction structure
Jorgo Chatzimarkakis, CEO of Hydrogen Europe, commented: “The new terms set out for the second call of the Hydrogen Bank create a fertile environment for companies to invest in Europe. Introducing resilience criteria marks a pivotal moment for the hydrogen sector and the European Union. This bold step, aligned with the Net-Zero Industry Act and the recommendations of the Draghi report, underscores the importance of building a robust European supply chain. Equally important is the need to cut through red tape. The simplicity of implementation is an absolute must for the new mandate.”
Prospective projects bidding in the next call will have to limit the sourcing of electrolyser stacks (which include surface treatment, cell unit production and stack assembly) from China to a proportion of at most 25% (in MWe) to fulfil this criterion. Compliance with European and international safety and cybersecurity standards will also be a mandatory requirement.
Not everything is positive
Less positive is the missed opportunity to expand cumulation flexibility, including projects already benefiting from funding, the introduction of sectoral baskets and the cap for maximum bid amounts, which might undermine participation. There is also no indexation to inflation, which could provide extra uncertainty in the event of price fluctuations.
The second auction is tentatively scheduled to launch by the beginning of December, right after the flagship event of the European Hydrogen Week 2024.
Hydrogen Europe remains committed to working with industry stakeholders and regulators to unlock the European hydrogen economy and enable the energy transition.
