The European Commission published Friday the terms and conditions for the second auction for renewable hydrogen production under the European Hydrogen Bank.
The upcoming auction, which is financed by Emission Trading System revenues via the EU’s Innovation Fund, is expected to build on the success of last year’s pilot, and ot contribute to the production of renewable hydrogen in Europe by de-risking investments with public support.
The T&Cs are published in parallel to launch of a public consultation on a draft Delegated Act on the definition of low-carbon hydrogen – another leg of Commission efforts to support the development of a competitive and sustainable European hydrogen market.
The renewable hydrogen auction will be opened on 3 December 2024, with a competitive bidding process with a budget of up to €1.2 billion. Successful bidders will receive a fixed premium in €/kg of renewable hydrogen produced, over ten years of operation.
The financial support is to bridge the gap between production costs and the price that off-takers are ready to pay for renewable hydrogen. To support the decarbonisation of the maritime transport sector, there is also a specific allocation of funding foreseen for producers who will sell their renewable hydrogen to off-takers from the maritime sector.
The terms and conditions for the second auction include new resilience requirements, building on the lessons of the pilot auction and facilitating a contribution of EU funding to the objectives of the Net-Zero Industry Act (NZIA).
The EU executive says projects will be evaluated on a new criterion: ‘Achieving security of supply of essential goods and contribution to Europe’s industrial leadership and competitiveness’. It also promises to ensure that support is provided to safe production processes in Europe through appropriate safety and cyber-security requirements.
Hydrogen and decarbonised gas market package
Regulation on the internal markets for renewable gas (EU/2024/1789)
