Winners of First EU Renewable Hydrogen Auction Sign Grant Agreements, Advancing European Production

On April 30, 2024, seven European projects were selected for funding under the Innovation Fund's pilot hydrogen auction (IF23 Auction). Today, six of these projects have signed grant agreements, securing financial support to help cover the gap between their production costs and the price industrial users are willing to pay for renewable hydrogen.

This auction is a key initiative of the European Hydrogen Bank (EHB), which was launched by the European Commission in 2023. It leverages revenue from the EU Emissions Trading System to support hydrogen producers classified as Renewable Fuel of Non-Biological Origin (RFNBO).

The selected projects span four European countries:

- Spain (Hysencia and Catalina),

- Portugal (Grey2green II and MP2X),

- Finland (eNRG Lahti),

- and Norway (Skiga).

The Innovation Fund will provide a fixed premium per kilogram of certified renewable hydrogen produced. Payments will only be made once production starts, with projects having up to five years to commence operations from the date of signing the grant agreements.

In total, EUR 694.5 million will be distributed over ten years, with individual grants ranging from EUR 8 million to EUR 245 million for installations with capacities between 35 and 500 MWe. The renewable hydrogen produced will support industries like maritime, heavy-duty transport, agriculture, and the production of e-methane and e-methanol.

The projects are expected to produce up to 1.52 million tonnes of renewable hydrogen in their first decade, potentially avoiding over 10 million tonnes of CO2 emissions.

One of the selected projects opted to withdraw from the grant agreement process. Building on the pilot auction's experience, the European Commission plans to launch a second hydrogen auction by the end of 2024, with a larger budget of EUR 1.2 billion. The Terms and Conditions for the second auction, published on September 27, 2024, outline the application requirements.