The European Commission announced that it has selected 15 projects across the European Economic Area (EEA) to receive €992 million (USD$1.1 billion) in funding to produce renewable hydrogen, a key element of efforts to decarbonize heavy industry and transport.
According to the Commission, the projects, located across Germany, Spain, Finland, Norway and the Netherlands, are expected to produce nearly 2.2 million tonnes of renewable hydrogen over ten years, avoiding more than 15 million tonnes of C02 emissions.
Hydrogen is viewed as one of the key building blocks of the transition to a cleaner energy future, particularly for industrial and transport sectors with difficult to abate emissions, in which renewable energy solutions such as wind or solar are less practical.
Around 90 million metric tons of hydrogen are produced annually, although the vast majority is extracted using fossil fuels, which create pollutants and GHG emissions. The development of clean hydrogen capacity, such as green hydrogen, which uses renewable energy to power the process to extract hydrogen from other materials, will require massive investments in areas including infrastructure, electrolysis, and transport.
The awards follow the EU’s second European Hydrogen Bank (EHB) auction. In 2022, the EU Commission announced plans to dramatically scale up hydrogen production in Europe, and proposed a Hydrogen Accelerator, envisioning scaling renewable hydrogen domestic production to 10 million tons. In 2023, the Commission launched its inaugural European Hydrogen Bank auction, aimed at helping stimulate investments in renewable hydrogen production capacity and bring production to scale, by bridging the gap between the price of production and the price consumers are currently willing to pay, in a market where non-renewable hydrogen is still cheaper to produce.
The Commission said that a third European Hydrogen Bank auction is planned for end 2025 with a budget of up to €1 billion, and that it will also soon launch a “Hydrogen Mechanism” under the European Hydrogen Bank, creating an online platform to bring together buyers and sellers and enable market participants to share information and find potential commercial partners.
Teresa Ribera, EU Commission Executive Vice-President for Clean, Just and Competitive Transition, said:
“The second auction under the European Hydrogen Bank reaffirms our commitment to building a robust renewable hydrogen market in Europe — one that is key to achieving climate neutrality in a cost-effective and competitive way. We are increasing EUs energy independence with positive impacts in security and jobs.”
