European Hydrogen Bank

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.

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.

Hydrogen Bank auctions

The first EU-wide auction awarded nearly €720 million to 7 renewable hydrogen projects across Europe under the Innovation Fund. Announced in April 2024, the successful projects were selected by the European Executive Agency for Climate, Infrastructure and Environment (CINEA) who evaluated 132 bids submitted to the auction between November 2023 and February 2024 and ranked them according to their bid price.

Together, the winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO₂ emissions.

Individual grant agreements will be prepared between each selected project and CINEA and are expected to be signed by November 2024. After this, the projects must start producing renewable hydrogen within a maximum of 5 years. They will receive the awarded fixed premium subsidy for up to 10 years for certified and verified renewable hydrogen production.

The Commission plans to launch a second European Hydrogen Bank auction by the end of 2024. It will draw on the lessons learned from this pilot auction and also involve further consultation with stakeholders before launching.

Germany became the first EU country to participate in the “auction-as-a-service” scheme. 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. This additional financial weight will help to attract and fund more renewable hydrogen projects.

International pillar

The Commission is developing the design of the international part of the European Hydrogen Bank to promote a coordinated EU strategy for renewable hydrogen imports.

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 use H2Global – a project funded by the European Innovation Council and the COSME programme - as a vehicle for the international auctions, to make a visible contribution to international hydrogen imports.

Transparency and coordination

The European Hydrogen Bank will ensure transparency and coordination of information supporting market and infrastructure development.

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.