Released December 13, 2023 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Commission (EC) has launched the first European Hydrogen Bank auction to make 800 million euro (US$867 million) available to support companies producing renewable hydrogen.
Renewable hydrogen producers, which includes those with planned projects, can bid for support in the form of a fixed premium per kilogram (kg) of hydrogen produced. The premium is intended to bridge the gap between the price of production and the price consumers are currently willing to pay, in a market where non-renewable hydrogen is still cheaper to produce. This first auction will be followed by a much larger pot of support worth up to 3 billion euro (US$3.24 billion) next year, according to Commission president Ursula von der Leyen. The pilot auction is designed to let the Commission collect reliable data about the European Union's (EU's) renewable hydrogen project pipeline, the level of competition for this kind of support, the costs of renewable hydrogen production and its market price. The money will come from the Innovation Fund which, with an estimated budget of 40 billion euro (US$43 billion) from the EU Emissions Trading System between 2020 and 2030, is the EU's largest funding programme for the deployment of net-zero technologies.
"Today's launch is about connecting supply and demand for renewable hydrogen," explained Maros Sefcovic, executive vice president for European Green Deal, Interinstitutional Relations and Foresight. "It is about creating transparency about price points, which will help kickstart a European hydrogen market. In turn, this will help accelerate the EU's clean energy transition while maintaining our competitiveness and preserving Europe's position as a leading global economic power. We are hoping for a positive response from the market, and also from Member States who are considering taking part in 'Auctions-as-service'. The European Hydrogen Bank is a great opportunity to support European industry's net-zero transition."
Industrial Info is tracking more than 1,200 hydrogen-related projects worth more than US$110 billion in investment value across key European sectors, including power, chemical processing, pipelines, metals & minerals, alternative fuel and refining. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.
Producers can submit bids for EU support for a certain volume of hydrogen production, with bids based on a proposed price premium per kilogram of renewable hydrogen produced, up to a ceiling of 4.5 euro per kilogram (US$4.9/kg). The selected projects will receive the awarded subsidy on top of the market revenues that they generate from hydrogen sales, for up to 10 years. Once projects have signed their grant agreements, they will have to start producing renewable hydrogen within five years.
The Commission is also offering a new "Auctions-as-a-service" mechanism under the Hydrogen Bank allowing Member States to finance projects that have bid in the auction but not been selected for support due to budget limitations. The goal is to speed up alternative funding for projects by discarding the need for Member States to run a separate auction at national level. Bidders have until 8 February 2024 to apply via the EU Funding and Tenders Portal.
Wopke Hoekstra, commissioner for climate action, said: "Hydrogen is going to be a key technology to decarbonise Europe's industry and help deliver our 2030 and 2050 climate targets. Today's first EU-wide auction for renewable hydrogen production sends a clear signal that Europe is the place to invest in renewable hydrogen production, and in hydrogen-based industries. Developing a solid hydrogen market in the EU will make us more competitive, offer new growth opportunities to industry, and provide quality jobs for European companies and citizens."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Renewable hydrogen producers, which includes those with planned projects, can bid for support in the form of a fixed premium per kilogram (kg) of hydrogen produced. The premium is intended to bridge the gap between the price of production and the price consumers are currently willing to pay, in a market where non-renewable hydrogen is still cheaper to produce. This first auction will be followed by a much larger pot of support worth up to 3 billion euro (US$3.24 billion) next year, according to Commission president Ursula von der Leyen. The pilot auction is designed to let the Commission collect reliable data about the European Union's (EU's) renewable hydrogen project pipeline, the level of competition for this kind of support, the costs of renewable hydrogen production and its market price. The money will come from the Innovation Fund which, with an estimated budget of 40 billion euro (US$43 billion) from the EU Emissions Trading System between 2020 and 2030, is the EU's largest funding programme for the deployment of net-zero technologies.
"Today's launch is about connecting supply and demand for renewable hydrogen," explained Maros Sefcovic, executive vice president for European Green Deal, Interinstitutional Relations and Foresight. "It is about creating transparency about price points, which will help kickstart a European hydrogen market. In turn, this will help accelerate the EU's clean energy transition while maintaining our competitiveness and preserving Europe's position as a leading global economic power. We are hoping for a positive response from the market, and also from Member States who are considering taking part in 'Auctions-as-service'. The European Hydrogen Bank is a great opportunity to support European industry's net-zero transition."
Industrial Info is tracking more than 1,200 hydrogen-related projects worth more than US$110 billion in investment value across key European sectors, including power, chemical processing, pipelines, metals & minerals, alternative fuel and refining. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.
Producers can submit bids for EU support for a certain volume of hydrogen production, with bids based on a proposed price premium per kilogram of renewable hydrogen produced, up to a ceiling of 4.5 euro per kilogram (US$4.9/kg). The selected projects will receive the awarded subsidy on top of the market revenues that they generate from hydrogen sales, for up to 10 years. Once projects have signed their grant agreements, they will have to start producing renewable hydrogen within five years.
The Commission is also offering a new "Auctions-as-a-service" mechanism under the Hydrogen Bank allowing Member States to finance projects that have bid in the auction but not been selected for support due to budget limitations. The goal is to speed up alternative funding for projects by discarding the need for Member States to run a separate auction at national level. Bidders have until 8 February 2024 to apply via the EU Funding and Tenders Portal.
Wopke Hoekstra, commissioner for climate action, said: "Hydrogen is going to be a key technology to decarbonise Europe's industry and help deliver our 2030 and 2050 climate targets. Today's first EU-wide auction for renewable hydrogen production sends a clear signal that Europe is the place to invest in renewable hydrogen production, and in hydrogen-based industries. Developing a solid hydrogen market in the EU will make us more competitive, offer new growth opportunities to industry, and provide quality jobs for European companies and citizens."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
