On Wednesday 30 August, the European Commission published the general conditions for the first auction of the European Hydrogen Bank. This pilot project is presented by the Commission as “an important step towards scaling up production of renewable hydrogen in the EU”. The auction, financed by the Innovation Fund, will open on 23 November 2023.
Up to €800 million will be awarded to renewable hydrogen producers in the European Economic Area (EEA) in the form of a fixed premium in €/kg of renewable hydrogen produced over ten years of operation. The main objective of this auction is to reduce the cost differential between renewable and fossil hydrogen by allocating public support effectively and efficiently.
The auction will also enable price discovery and the formation of a renewable hydrogen market by revealing production costs and creating comparable price levels. This will help to reduce the risks associated with hydrogen projects in Europe by linking national supply and demand, while reducing investment costs and mobilising private capital.
The new auctioning mechanism will also expand the portfolio of support mechanisms of the Innovation Fund, financed by revenues from the auctioning of EU emission allowances, enabling faster deployment of the innovative technologies needed for the green transition.
This publication follows consultations with stakeholders since March 2023, when the Commission presented a new plan to stimulate investment in renewable hydrogen production through the European Hydrogen Bank (see EUROPE 13143/4).
The terms and conditions published by the Commission: https://aeur.eu/f/8e0 (Original version in French by Nithya Paquiry)