The European Hydrogen Bank’s second auction for the production of renewable hydrogen has attracted 61 bids from projects in 11 countries with the European Economic Area (EEA) . Eight of the bids were submitted under the dedicated maritime topic by hydrogen producers with off-takers in the maritime sector.
The total grant support requested is more than €4.8 billion, four times the available budget of €1.2 billion provided by the Innovation Fund. All bids taken together account for a total electrolyser capacity of around 6.3 Gigawatts (GWe). Over ten years, these projects would produce more than 7.3 million tonnes of renewable hydrogen. On a yearly basis, this would cover 7% of the EU’s REPowerEU ambition for domestic renewable hydrogen production in 2030.
Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, said: “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.”
Producers of renewable hydrogen, as defined in the Renewable Energy Directive and its Delegated Acts, have submitted bids for support in the form of a fixed premium per kilogram of renewable hydrogen produced over a period of up to 10 years. The premium, for which project promoters bid in the auction, covers the gap between the cost of production and the price buyers are currently willing to pay for renewable hydrogen.
EU Member States can also benefit from an “Auctions-as-a-service” mechanism, whereby the results of the auction can attract further national funding for additional projects, in full respect of the EU State aid rules. Under the second auction of the European Hydrogen Bank , Spain, Lithuania, and Austria have participated in this scheme, as announced in November 2024, with the contribution of up to €836 million in national funds. The Commission invites other Member States to take advantage of this service.
Next Steps
The European Climate, Infrastructure and Environment Executive Agency (CINEA) is now evaluating submitted bids on the pass/fail qualification criteria outlined in the call text. All passing bids will then be ranked according to their bid price. CINEA plans to inform about the evaluation results by the end of May 2025 and successful applicants will be invited to prepare and sign corresponding Grant Agreements.
The Grant Agreements are expected to be signed by November 2025 at the latest. The selected projects will have to reach financial close within 2.5 years and start producing renewable hydrogen within five years of signing the grant agreement. They will receive the awarded fixed premium subsidy for up to 10 years upon certified and verified renewable hydrogen production.
In parallel to finalising the evaluation, the Commission will draw on the lessons learned from this second auction to prepare the Terms & Conditions for a third auction for hydrogen, which it aims to launch before the end of 2025.
Background
With an estimated revenue of €40 billion from the EU Emissions Trading System (EU ETS) between 2020 and 2030, the Innovation Fund aims to create financial incentives for companies and public authorities to invest in cutting-edge net-zero technologies and support Europe’s transition to climate neutrality.
The European Hydrogen Bank is an initiative to facilitate the EU’s domestic production and imports of renewable hydrogen. It aims to unlock private investment in the EU and in third countries by addressing investment challenges, closing the funding gap, and connecting future renewable hydrogen supply to consumers, helping to meet the objective of 20 million tonnes of hydrogen in the EU energy mix by 2030. It will also allow the Commission to collect reliable data about the EU’s renewable hydrogen project pipeline, the level of competition for this kind of support, the costs of renewable hydrogen production and its market price.
In its first auction in 2023, the Innovation Fund allocated €694 million in grants to support six projects producing hydrogen that qualifies as Renewable Fuels of Non-Biological Origin (RFNBO), meaning it is generated using renewable electricity and meets the EU’s sustainability criteria.
In addition, the Innovation Fund has also allocated more than €12 billion to more than 200 innovative projects across different sectors through its previous general calls for proposals.
With a budget of €2.4 billion and €1 billion respectively, the Innovation Fund 2024 Call for Net-Zero Technologies (IF24Call) and Battery Call (IF24Battery) are still open until 24 April 2025. The IF24Call will support decarbonisation projects of different scales, as well as projects focusing on manufacturing components for renewable energy, energy storage, heat pumps, hydrogen production, and pilots. The IF24Battery call will provide support for projects that can produce innovative electric vehicle battery cells or deploy innovative manufacturing techniques, processes and technologies.
More information
Launch of the 2024 calls and auction
Innovation Fund competitive bidding
IF24 Auction Call Text
