European Commission announces second hydrogen auction

BRUSSELS (ICIS)–Speaking at the European Hydrogen Week 2023 conference in Brussels, European Commission president Ursula von de Leyen announced a second round of the commission’s Hydrogen Bank for spring 2024, increasing funding to €3bn.

The announcement comes just days before the first official auction for the EU Hydrogen Bank is set to take place, for which just €800m has been allocated. The spring auction will be budgeted for €2.2bn, increasing total funds to €3bn, a sum originally stated when the bank was first announced in September 2022.

The maximum subsidy allowance for the November auction is €4.50/kg of renewable hydrogen produced, which means the auction can support up to 177 thousand tonnes (tk) of renewable hydrogen, if all parties are awarded the full subsidy.

With €3bn of funds, a total of 667kt of hydrogen could be supported if all of the auction’s allocation was used for maximum subsidy.

It is unlikely that all who submit for the auction aim to claim the full subsidy. This is because subsidy is awarded through a competitive auction process, meaning the lowest bidders shall be prioritised.

Supported volume could be much higher. For example, if bidders average €1-2/kg of support, the bank would be able to subsidise 1.5-3 million tonnes of hydrogen, amounting to 15-30% of the commission’s target for domestic production by 2030.

When announcing the funding, president von de Leyen stated Europe is at the “dawn of the clean hydrogen era”.

Coinciding with the announcement of additional funding for the Hydrogen Bank, president von de Leyen also stated that the commission was supporting the development of 10GW of electrolyser capacity in Brazil, funded through the €2bn Global Gateway fund.

The electrolysis capacity shall support the production of hydrogen and ammonia, which will then be transported to the island of Krk in Croatia, where it will move on to being sold into markets around south-east Europe.