The European Commission has announced the results of the first European hydrogen auction. A total of seven projects from four countries were selected in the European Hydrogen Bank's first competitive procedure and will now receive around 720 million euros for the production of renewable hydrogen in Europe. This money comes from the proceeds of the EU Emissions Trading Scheme.
The successful bidders will produce renewable hydrogen in Europe and receive financial support to bridge the cost gap between their production costs and the current market price for hydrogen, which is largely determined by non-renewable producers. The European Hydrogen Bank thus contributes to the promotion of clean fuels that will contribute to the decarbonisation of European industry. The renewable hydrogen produced by these projects will be used in industries such as steel production, chemicals, shipping and fertiliser production.
The seven selected projects were able to prevail against 132 competitors in an oversubscribed auction. Together, the winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over a period of 10 years, thereby avoiding more than 10 million tonnes of CO2 emissions. The projects are located in four European countries and have submitted bids of between 0.37 and 0.48 euros per kilogramme of renewable hydrogen. The amount of subsidies for the seven projects is between 8 million and 245 million euros.
The projects are:
The contracts between the companies and the European Climate, Infrastructure and Environment Executive Agency (CINEA) are to be signed by November 2024 at the latest. The selected projects must start producing renewable hydrogen within a maximum of 5 years after signing the grant agreement. They will receive the fixed premium granted for up to 10 years for the certified and verified production of renewable hydrogen.
In addition, Germany is the first member state to take the opportunity to participate directly in the first European hydrogen auction. Specifically, Germany is making 350 million euros available to fund the best-placed German projects that are not eligible for funding at EU level but fulfil the funding criteria. The results will also be published shortly. The EU hopes that other member states will seize this opportunity for the next call for proposals and support additional projects with national funds.
The internal evaluation of this first pilot auction is currently underway. Based on the findings, the Commission plans to organise a second auction of the European Hydrogen Bank by the end of this year.
Are you interested and would like to take part in the next auction of the European Hydrogen Bank? Please contact us and let us advise you on the subject of EU funding.
Text: Stefan Durm
EurA AG
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