The European Commission has allocated €992 million in public funding to support 15 large-scale renewable hydrogen production projects across five countries within the European Economic Area (EEA). The funding, awarded through the second auction of the European Hydrogen Bank (EHB) under the EU Innovation Fund, aims to accelerate the deployment of clean hydrogen technologies and drive industrial decarbonisation.
Key Objectives and Impact
The selected projects are expected to produce up to 2.2 million tonnes of renewable hydrogen over the next decade, contributing to a reduction of more than 15 million tonnes of CO₂ emissions. These efforts are central to the EU’s broader strategy to replace fossil fuels such as coal, oil, and natural gas in high-emission sectors, including transportation, chemical manufacturing, and the production of methanol and ammonia.
“This round of auctions is a decisive step toward bridging the cost gap between renewable hydrogen and fossil-based alternatives,” the European Commission stated. “It accelerates market deployment and supports EU energy independence and decarbonisation.”
Support for Hard-to-Abate Sectors
Notably, €96.7 million of the total funding is earmarked for the maritime sector—historically a hard-to-abate industry—highlighting the EU’s commitment to decarbonizing shipping. Three maritime-focused projects were selected, with hydrogen premium needs ranging from €0.45 to €1.88 per kilogramme.
Twelve of the 15 awarded projects will benefit from a fixed premium subsidy model, receiving between €0.20 and €0.60 per kilogramme of hydrogen produced. The level of support is calibrated to offset the cost differential between renewable and fossil-derived hydrogen.
Additional National Support via ‘Auctions-as-a-Service’
Complementing the EU-level funding, Spain, Lithuania, and Austria are leveraging the EU’s centralized auction platform to provide an additional €836 million in national funding through the ‘Auctions-as-a-Service’ mechanism. This approach enables member states to streamline support for high-quality local projects that did not secure EU funding but remain aligned with national decarbonisation goals.
Next Steps and Future Auctions
Each project selected under the current round will receive between €8 million and €246 million in funding, disbursed over a maximum period of 10 years. Project developers are now entering the grant agreement phase with the European Climate, Infrastructure and Environment Executive Agency (CINEA), with contracts expected to be finalized by September or October 2025. All projects must achieve financial close within 2.5 years and commence hydrogen production within five years.
Looking ahead, a third EHB auction with a budget of up to €1 billion is scheduled for late 2025. In parallel, the European Commission will launch the Hydrogen Mechanism, a digital matchmaking platform aimed at connecting buyers and sellers, improving transparency, and facilitating commercial offtake agreements within the emerging hydrogen market.
Strategic Implications
By investing nearly €1 billion in renewable hydrogen and enabling member states to amplify the impact with their own funding, the EU is positioning itself as a global leader in clean hydrogen. This initiative is not only key to meeting the EU’s climate goals but also to strengthening energy resilience, fostering innovation, and creating sustainable industrial jobs across the continent.
