(Brussels / Belgium) – In April of this year, seven projects were selected for EU funding as part of the hydrogen pilot auction . Six of the winners have now signed the funding agreements. One of the successful bidders has withdrawn.
Contract for difference
The approved funding is intended to help companies bridge the gap between their production costs for green hydrogen and the price industrial users are willing to pay for it (contract for difference). This auction is one of the pillars of the European Hydrogen Bank (EHB), launched by the Commission in 2023. Revenue from the EU Emissions Trading System supports producers of hydrogen classified as renewable non-biological fuel (RFNBO).
The selected projects are located in Spain (Hysencia and Catalina), Portugal (Grey2green II and MP2X), Finland (eNRG Lahti) and Norway (Skiga). The Innovation Fund will support these projects with a fixed premium per kilogram of certified and verified renewable hydrogen. Payments will only be made when hydrogen production starts. From the moment the grant agreement is signed, the companies have five years to start production.
Six projects have signed financing agreements with the EU for the production of green hydrogen. The seventh project, "El Alamillo", was supposed to be implemented in Spain, but Benbros Energy has withdrawn it from the process. © European Commission
The total amount of the funding amounts to around 694,52 million euros and will be paid out over a period of ten years. The individual grants range from eight to 245 million euros for plants with an output of 35 to 500 megawatts (MWe).
Overall, the projects have the potential to produce up to 1,52 million tonnes of renewable hydrogen in the first ten years of their operation, thereby avoiding more than ten million tonnes of CO2 emissions. Areas of application for the energy source include shipping, heavy goods transport, agriculture and the production of e-methane and e-methanol.
Another auction at the end of the year
The first renewable hydrogen auction attracted 132 bids from 17 European countries, requesting more than 15 times the available budget of €800 million. The 119 admissible and eligible proposals were evaluated by the European Climate, Infrastructure and Environment Executive Agency (CINEA) and ranked according to their bid price.
The Fund is the EU's largest financing programme for the deployment of innovative net-zero technologies and has an estimated budget of €40 billion from the revenues from the auctioning of allowances under the EU Emissions Trading System between 2020 and 2030. The Commission plans to launch the second auction for renewable hydrogen through the Innovation Fund by the end of 2024 with an increased budget of €1,2 billion.
Photos
The European Hydrogen Bank was announced by EU Commission President von der Leyen in 2022 and launched in 2023. Six projects will now receive funding of almost 700 million euros to produce green hydrogen. © European Union / Dati Bendo
