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Upcoming EU Hydrogen Bank pilot auction: European Commission publishes Terms & Conditions

An important step towards scaling up production of renewable hydrogen in the EU.

The auction is designed to achieve four objectives:

  1. Reducing the cost gap between renewable and fossil hydrogen in the EU as effectively and efficiently as possible by allocating public support. Auctions have proved to be a success in the renewable power sector, bringing down the required funding for renewable power generation through competition on price while mobilising private investments.

  2. Allowing for price discovery and renewable hydrogen market formation. Competitive auctions with a simple and transparent set-up reveal production costs and create valuable and comparable price points that can serve to kick-start a European hydrogen market.

  3. De-risking European hydrogen projects, connecting domestic renewable hydrogen supply and demand, bringing capital costs down and leveraging private capital. Given the size of the investment needed, support from the Innovation Fund should be seen as the seed funding for increased private and corporate investments.

  4. Reducing administrative burdens and costs thanks to short, lean, and transparent procedures.

The new auction mechanism will expand the portfolio of support mechanisms that the Innovation Fund currently provides through grants, project development assistance, and other blended financial instruments. It is also expected to enable a faster rollout of innovative technologies needed for the green transition, especially in hard-to-abate sectors.

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