The pilot European Union auction for renewable hydrogen production has garnered significant attention, with 132 bids received, representing a combined planned electrolyser capacity of 8.5 gigawatts-electrolyser (GWe), announced the European Executive Agency for Climate, Infrastructure, and Environment (CINEA) on Monday.
According to CINEA, the projects submitted span across 17 countries, seeking support that surpasses the auction's allocated budget of EUR 800 million (USD 862 million). Bidders are vying for support in the form of a fixed premium per kilogram of renewable hydrogen produced, with a subsidy cap set at EUR 4.5 per kg. Successful projects will receive subsidies for up to 10 years.
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“CINEA is presently assessing the eligibility of the bids and will subsequently evaluate and rank them based on their pricing,” stated a CINEA spokesperson. “The results are expected to be disclosed in April or May, with grant agreements to be finalized with the selected projects by November. Production commencement is required within five years of agreement signing.”
Taking cues from the European Hydrogen Bank pilot auction, the European Commission intends to launch a second round before the year's end.
Funded by the EU's Innovation Fund, the hydrogen auction initiative aims to accelerate the development of renewable hydrogen projects. Additionally, the Commission has introduced an “Auctions-as-a-service” mechanism to enable member states to allocate national funding to additional projects. Germany, being the first EU nation to utilize this mechanism, has earmarked EUR 350 million for domestic green hydrogen initiatives in the event that eligible bids fail to secure Innovation Fund support.
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Kurt Vandenberghe, Director-General for Climate Action, emphasized that “the enthusiastic market response to the pilot auction demonstrates that the European hydrogen industry is prepared to scale up.”
Launched in November 2023, the inaugural auction saw submissions accepted until February 8, 2024.
