(Brussels / Belgium) – The European Commission has launched the second auction of the European Hydrogen Bank. This tender will provide €1,2 billion from the revenues of the EU Emissions Trading System (ETS). The funds will support manufacturers based in the European Economic Area in building renewable hydrogen production facilities. The budget is €400 million higher than in the first auction, which concluded in February of this year.
production bonus for 10 years
The projects selected in these auctions typically receive a fixed production premium (pay-as-bid) for a maximum period of ten years. This is intended to close the gap between the production price and the price that consumers are currently willing to pay - in a market where non-renewable hydrogen is still cheaper to produce than renewable hydrogen. Bids for the auctions are ranked in order of lowest to highest bid price and are awarded until the auction budget is exhausted.
financing with national funds
The Commission also offers an 'auction-as-a-service' mechanism, which allows Member States to finance projects that participated in the auction but were not selected due to budgetary constraints. This allows States to use national funds to support projects in their territory without having to conduct a separate auction at national level, reducing the administrative burden and costs for all parties involved.
As previously reported, Spain, Lithuania, and Austria intend to participate in the European Hydrogen Bank's second auction using the "Auctions-as-a-Service" system. According to the report, the three countries will contribute up to €836 million of their national funds, in addition to the €1,2 billion in EU funding, to support renewable hydrogen production projects in their respective countries. This brings the total funds mobilized through the auction to more than €2 billion. In mid- November , it was stated that the three countries would contribute "only" €700 million. Germany pioneered this mechanism, contributing €350 million nationally to the first auction.
With estimated revenues of €40 billion from the EU Emissions Trading System between 2020 and 2030, the Innovation Fund aims to create financial incentives for companies and public authorities to invest in innovative low-carbon technologies and support Europe's transition to climate neutrality.
Interested parties can apply for the renewable hydrogen auction via the EU funding and tendering portal until February 20, 2025. Successful bidders will sign the agreements within nine months of the call for tenders closing.
Photos
At the second auction of the European Hydrogen Bank, 1,2 billion euros are available. Spain, Lithuania and Austria are providing additional national funds totaling 826 million euros for the "Auction-as-a-Service" program. © European Union / Lukasz Kobus
