Six renewable hydrogen projects have signed grant agreements as part of the EU’s Innovation Fund pilot hydrogen auction (IF23 Auction), setting the stage for significant new production across Europe. Selected in April 2024, these projects span Spain, Portugal, Finland, and Norway and are supported by nearly €695 million in funding over ten years.
The auction, a key component of the European Hydrogen Bank launched in 2023, uses revenues from the EU Emissions Trading System to bridge the gap between production costs and industrial market prices. The projects, categorized as producing Renewable Fuel of Non-Biological Origin (RFNBO), will serve crucial sectors such as maritime, heavy-duty transport, agriculture, and the production of e-methane and e-methanol.
With capacities ranging from 35 to 500 megawatts electric (MWe), the individual grants vary between €8 million and €245 million. Collectively, the projects are expected to produce up to 1.52 million tonnes of renewable hydrogen over their first decade, potentially preventing more than 10 million tonnes of CO2 emissions. These advancements mark a significant milestone in Europe’s clean energy transition.
The Innovation Fund will support these projects with a fixed premium payment per kilogram of certified and verified renewable hydrogen produced. This means that no payments will be made before projects start production. From the time of the grant agreement signature, the projects have up to five years to start producing renewable hydrogen.
The total amount of support comes to EUR 694 521 237 and will be disbursed over a timespan of ten years. The individual grants range from EUR 8 million to EUR 245 million for installations with a megawatt electric (MWe) capacity from 35 to 500 MWe.
Renewable hydrogen produced will serve many sectors, such as maritime, heavy duty transport, agriculture, or in the production of e-methane and e-methanol.
Meet the projects
| Project acronym | Project Coordinator | Project location | Bid price (EUR/kg) | Bid volume (kt H2/10years) | Bid capacity (MWe) | Expected GHG abatement (ktCO2/10years) * | Total requested funding (EUR) ** |
|---|---|---|---|---|---|---|---|
| eNRG Lahti | Nordic Ren-Gas Oy | Finland | 0.37 | 122 | 90 | 836 | EUR 45,228,375 |
| Grey2Green-II | Petrogal S.A. | Portugal | 0.39 | 216 | 200 | 1477 | EUR 84,227,910 |
| HYSENCIA | Angus | Spain | 0.48 | 17 | 35 | 115 | EUR 8,104,918 |
| SKIGA | Skiga | Norway | 0.48 | 169 | 117 | 1159 | EUR 81,317,443 |
| Catalina | Renato Ptx Holdco | Spain | 0.48 | 480 | 500 | 3284 | EUR 230,463,819 |
| MP2X | Madoquapower 2x | Portugal | 0.48 | 511 | 500 | 3494 | EUR 245,178,772 |
| Σ 1515 ktH2 | Σ 1442 MWe | Σ 10 365 ktCO2 | Σ EUR 694,521,237 | ||||
One project out of the seven that were selected to receive support from the Innovation Fund pilot auction decided to withdraw from the grant agreement process.
Drawing from the experience of this pilot auction, the Commission plans to launch the second renewable hydrogen auction via the Innovation Fund by the end of 2024, with an increased budget of EUR 1.2 billion. Published on 27 September 2024, the Terms and Conditions (T&Cs) for the second auction set out the main elements and requirements to apply.
Background
The Innovation Fund is the EU’s largest funding programme for the deployment of innovative net-zero technologies, with an estimated budget of EUR 40 billion from the revenues of auctioning allowances under the EU Emissions Trading System between 2020 and 2030.
The European Hydrogen Bank is an initiative to facilitate the EU’s domestic production and imports of renewable hydrogen. It aims to unlock private investment in the EU and in third countries by addressing investment challenges, closing the funding gap, and connecting future renewable hydrogen supply to consumers. Its domestic pillar is implemented through the Innovation Fund.
The first renewable hydrogen auction received 132 bids from 17 European countries requesting over 15 times the available EUR 800 million budget. The 119 proposals admissible and eligible were evaluated and ranked according to their bid price by the European Climate, Infrastructure and Environment Executive Agency (CINEA).
More Information
- Innovation Fund
- European Hydrogen Bank
- European Hydrogen Bank auction provides EUR 720 million for renewable hydrogen production in Europe (press release, 30 April 2024)
Date: October 7, 2024
