Fifteen renewable hydrogen production projects across five countries have secured a total of EUR 992 million ($1.12 billion) in grants after the second round of the European Hydrogen Bank.
The amount is a fraction of the EUR 4.8 billion requested by project proposals in the bidding round. The submitted bids represented about 6.3 gigawatts (GW), according to the European Commission.
The 15 selected “are expected to produce nearly 2.2 million tonnes of renewable hydrogen over 10 years, avoiding more than 15 million tonnes of CO2 emissions”, the Commission said in an online statement.
“The hydrogen will be produced in sectors such as transportation, the chemical industry, or the production of methanol and ammonia”.
The grant comes in the form of a subsidy meant to help close the price difference between production costs and the price buyers are currently willing to pay. Winners will receive a fixed premium per kilogram of renewable hydrogen produced over a period of up to 10 years.
“Of the selected projects, 12 are committed to producing renewable hydrogen with fixed premium support between EUR 0.20 and EUR 0.60 per kilogram”, the Commission said.
“For the first time, the auction provided a dedicated budget for hydrogen producers with off-takers in the maritime sector, which are entities using the hydrogen produced by the project for carrying out or making use of bunkering activities”.
Eight of the selected projects are in Spain, three are in Norway and two are in Germany. Finland and the Netherlands each have one.
The biggest in terms of production volume is the Netherlands’ Zeevonk Electrolyser project, which had a bid volume of 411 kilotons of hydrogen over 10 years. It was followed by Meridian SAS’ KASKADE project in Germany (354 kilotons over 10 years). Koppo Energia Oy’s Kristinestad PtX project in Finland rounded up the top three with a bid volume of 258 kilotons over 10 years.
The Commission earlier approved additional offers by Austria, Lithuania and Spain totaling EUR 836 million under the Hydrogen Bank’s “auction as a service”. Auction as a service allows countries to pick projects that participated in the auction but did not win EU funding. This mechanism allows member-states to have a competitive selection of projects to fund using their internal budgets without holding their own auction.
“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”, commented Commission Executive Vice President for Clean, Just and Competitive Transition Teresa Ribera. “We are increasing EUs energy independence with positive impacts in security and jobs.
“The strong response to the auction clearly reflects the vitality and growing confidence in Europe’s emerging renewable hydrogen industry”.
The selected projects now need to sign a grant agreement with the European Climate, Infrastructure and Environment Executive Agency. Agreements are expected to be signed by October. The selected projects must reach financial close within 2.5 years and start production within five years of signing the grant agreement.
Under the first Hydrogen Bank auction, seven projects across Finland, Norway, Portugal and Spain were awarded a total of EUR 720 million.
The seven projects were to receive subsidies of EUR 8 million to EUR 245 million, according to a statement by the Commission April 30, 2024.
Germany availed of the auction as a service under the first bidding round and received Commission state aid approval for its offer of EUR 350 million.
A third European Hydrogen Bank auction is planned to be held by year-end with an offer of up to EUR 1 billion.
“The Commission will soon also launch the Hydrogen Mechanism under the European Hydrogen Bank”, the Commission added. “This online platform will bring together buyers and sellers and enable market participants to share information and find potential commercial partners”.
To contact the author, email jov.onsat@rigzone.com
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