In 2022, the Commission launched the European Hydrogen Bank to create investment security and business opportunities for European and global renewable hydrogen production. It is not designed to be a physical institution, but is a financing instrument, run internally by European Commission services.
Objective
The main objective of the facility is to unlock private investments in hydrogen value chains, both within the EU and globally, by connecting renewable energy supply to EU demand and addressing the initial investment challenges.
The European Hydrogen Bank will establish an initial market for renewable hydrogen, offering new growth opportunities and jobs.
4 pillars of action
The Communication on the European Hydrogen Bank (COM/2023/156), published on 16 March 2023, describes the concept, tasks and structure of the financing instrument in detail. It is based on 4 pillars of action at EU level.
1. Domestic pillar
The domestic pillar’s goal is to support the scale-up of the hydrogen production market within the European Economic Area (EEA) and connect the renewable hydrogen supply with demand. Funding is awarded as a fixed premium in €/kg of verified and certified renewable fuel of non-biological origin (RFNBO) hydrogen produced.
European Hydrogen Bank auctions
The second domestic auction for the production of renewable hydrogen via the Innovation Fund opened on 3 December 2024 and will award up to €1.2 billion in support to renewable hydrogen producers located in the European Economic Area (EEA), contributing to the further creation of a European market for renewable hydrogen by de-risking investments with public support. The Commission published the terms and conditions for the second auction in September 2024.
The first hydrogen bank auction was launched in November 2023 and closed in February 2024, awarding nearly €720 million to 7 renewable hydrogen projects across Europe, from a total of 132 bids submitted to the auction. 6 of 7 projects signed their respective grant agreements in October 2024.
The projects must start producing renewable hydrogen within 5 years. Together, they have the potential to produce 1.52 million tonnes of renewable hydrogen in their first 10 years of operation,avoiding more than 10 milliontonnes of CO2 emissions.
Germany became the first EU country to participate in the 'auction-as-a-service' scheme in December 2023. It made €350 million available from its national budget for the highest ranked projects in Germany which did not qualify for EU-level support, but which do meet the eligibility criteria.
2. International pillar
The Commission is developing the design of the international part of the European Hydrogen Bank that would attract imports of renewable hydrogen into the EU market.
Following the joint announcement of Commissioner for Energy Kadri Simson and German Federal Minister for Economic Affairs and Climate Action Robert Habeck on 31 May 2023, the Commission is developing the concept of joint European auctions. The aim is to bring together EU countries’ financial resources and potentially use H2Global as a vehicle for the international auctions, to make a visible contribution to international hydrogen imports.
3. Transparency and coordination
The European Hydrogen Bank will ensure transparency and coordination of information supporting market and infrastructure development.
The Commission will implement a pilot hydrogen mechanism to support the market development of hydrogen. In practice, it will collect, process, and make available information on demand and supply for renewable and low-carbon hydrogen submitted by market players. This will further increase transparency on the market and enable European buyers to match with both European and international suppliers. The mechanism is expected to start functioning in 2025.
More about the Hydrogen Mechanism
4. Coordination of support instruments
It will improve coordination of the existing EU and EU countries’ support instruments, including technical assistance and investment support inside and outside the EU.
Promoting renewable hydrogen import
Green hydrogen partnerships will facilitate the promotion of the import of renewable hydrogen from non-EU countries and contribute to incentivising decarbonisation.
Together, the European Hydrogen Bank and the green hydrogen partnerships aim at delivering a framework to ensure that partnerships established by the EU countries and the industry provide a level-playing field between EU production and non-EU country imports.
- Commission earmarks €4.6 billion to boost net-zero technologies, electric vehicle battery cell manufacturing and renewable hydrogen under the Innovation Fund (03/12/2024)
- Commission kick-starts work on a new pilot mechanism to boost the hydrogen market (03/06/2024)
- European Hydrogen Bank auction provides €720 million for renewable hydrogen production in Europe (30/04/2024)
- Commission approves €350 million German State aid scheme to support renewable hydrogen production (05/04/2024)
- Germany's participation in the European Hydrogen Bank (20/12/2023)
- Joint statement by Commissioner Simson and German Minister Habeck on energy issues (31/05/2023)
- Commission outlines European Hydrogen Bank to boost renewable hydrogen (16/03/2023)
- Factsheet: ‘Boosting hydrogen through a European Hydrogen Bank’ (16/03/2023)