(Brussels / Belgium) – The European Union has set the framework for the third auction of the European Hydrogen Bank and is now awaiting stakeholder feedback. As announced, the Commission will launch the tender for hydrogen producers based in the European Economic Area by the end of 2025.
The focus is on renewable fuel of non-biological origin (RFNBO). The proposed budget amounts to €1,1 billion, divided into three areas:
- EUR 400 million to support the production of RFNBO hydrogen
- EUR 400 million to support the production of RFNBO hydrogen and/or electrolytic low-carbon hydrogen
- EUR 200 million to support the production of RFNBO hydrogen and/or electrolytic low-carbon hydrogen for the maritime sector.
Should countries participate in the third area through the “Auction-as-a-Service” principle, the EU sum could be increased by an amount corresponding to the countries’ contributions, but not exceeding a cumulative total of 100 million euros, the announcement states.
The EU is incorporating industry feedback on the draft into the tender. The auction is scheduled to start in the fourth quarter. © European Commission
"Auction-as-a-Service" enables member states to identify and finance eligible projects in their territory that meet the auction's qualification criteria but cannot be financed from the Innovation Fund due to funding constraints. Funding is then allocated to companies in the participating countries using a simplified procedure without the obligation to re-open a tender. Germany contributed an additional €350 million in the first two auctions, followed by Spain, Austria, and Lithuania with a cumulative €836 million.
The Hydrogen Bank's support takes the form of a fixed premium for hydrogen production for a maximum period of ten years. The support remains necessary because, given the gap between the cost of producing RFNBO and/or electrolytic low-carbon hydrogen and the market price, projects cannot be implemented without public financial support.
Results of the second auction in September
The first auction began in November 2023 and ended in February 2024. 132 bids were received from 17 countries. Seven projects were approved, resulting in a subsidy (clearing price) of €0,37 to €0,48 per kilogram of hydrogen and a total funding amount of €720 million. The bidders aim to produce a cumulative 1,58 million tons of hydrogen annually within ten years.
The second auction took place in December 2024. Initial results were published in May 2025. The selection includes twelve general projects with a clearing price of €0,60/kg and three projects for hydrogen production for the maritime sector at €1,88/kg. A final list, including possible additional projects from the reserve list in case of a failure during the process, will be published in September 2025. According to media reports, one consortium has already withdrawn due to an overly tight EU timeline for the project's commissioning, but this has not yet been directly confirmed (as of press time).
Following a written consultation on the draft of the third auction, feedback from stakeholders will be sought, which will then be incorporated into the final design. The final terms and conditions will not be published until the tender is opened.
The draft of the third hydrogen auction “Innovation Fund IF25 Hydrogen Auction” is available free of charge as a PDF (25 pages).
Photo above
The European Hydrogen Bank is preparing its third auction, this time with a budget of €1,1 billion. © European Union / Lukasz Kobus
