A few years ago, clean hydrogen in Europe remained largely an ambition — with bold targets but limited execution. That scenario is changing rapidly, driven by a new auction-based mechanism designed to address one of the sector’s toughest challenges: making low-carbon hydrogen cost-competitive.

The European Hydrogen Bank operates through competitive auctions under the Innovation Fund, where producers bid for a fixed-premium subsidy per kilogram of hydrogen for up to ten years. Only projects that can demonstrate credible offtake agreements and feasible paths to Final Investment Decision (FID) are eligible. This ensures that efficiently structured projects secure funding, supporting the growth of low-cost hydrogen while distributing risk and optimising taxpayer value.

The first auction in April 2024 marked a major milestone, allocating €720 million to seven winning projects. Bids averaged around €0.4–0.5/kg, significantly below expectations. The outcome unlocked more hydrogen production per euro invested and funded electrolyser capacity that could reach 6 GW, equating to roughly 0.7 million tonnes per year by 2030—nearly doubling Europe’s committed capacity at the time.

Momentum continued with the second auction in early 2025, confirming the effectiveness of the model. With a budget of €1.2 billion, the auction attracted 61 bids representing 6.3 GW of planned electrolyser capacity and over 7.3 million tonnes of hydrogen production over ten years — four times the available budget. Ultimately, 15 projects across the EU were awarded support totalling €992 million.

Among the winners, Spain led with (eight) projects, followed by Germany (two), the Netherlands (one), Finland (one) and Norway’s maritime corridor (three). General-category bids ranged between €0.20–0.60/kg, while maritime-focused projects came in higher at €0.45–1.88/kg, reflecting greater production and delivery complexity.

If all the awarded projects proceed to FID, Europe’s committed green hydrogen capacity will rise from approximately 2.7 GW to 5 GW — offering the clearest signal yet that commercial-scale hydrogen production is finally taking shape across the continent.

Source:

https://oilprice.com/Alternative-Energy/Renewable-Energy/How-the-European-Hydrogen-Bank-is-Jump-Starting-Europes-Hydrogen-Economy.html