Energy Transition, Hydrogen, Renewables, Emissions

February 26, 2025

EU to launch Eur1 billion third hydrogen bank funding round in Q3

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HIGHLIGHTS

EC to adopt low-carbon hydrogen delegated act in Q1

Reviewing effectiveness of renewable hydrogen delegated act

Demand aggregation mechanism to launch in Q2

The European Commission will launch a third hydrogen production support scheme worth up to Eur1 billion ($1.05 billion) in the third quarter of 2025, it said in its Clean Industrial Deal business plan launched Feb. 26.

The third call for projects under the EU's European Hydrogen Bank initiative will also allow member states to support national projects under the "auction as a service" scheme.

"To de-risk and accelerate the uptake of hydrogen production in the EU, the Commission will launch a third call under the Hydrogen Bank in Q3 2025 with a budget of up to Eur1 billion and encourage Member States to use the auctions-as-a-service platform provided by the Commission, for example by facilitating the use of unspent EU funds," it said.

The second Hydrogen Bank auction closed Feb. 20, with a budget of up to Eur1.2 billion, and a fixed subsidy price ceiling of Eur4/kg. The results have not yet been announced.

The first auction in 2023 cleared well below expectations at 37-48 euro cents/kg, supporting 1.5 GW of electrolysis across six projects.

Platts, part of S&P Global Commodity Insights, assessed the cost of green hydrogen production via alkaline electrolysis in Germany, backed by renewable power purchase agreements, at Eur8.11/kg ($8.51/kg) on Feb. 25, down from a peak of over Eur14.50/kg in mid-December.

The assessment reflects one possible pathway for producing EU Renewable Energy Directive-compliant green hydrogen.

Low-carbon delegated act

The commission will also adopt a delegated act setting out the definition for low-carbon hydrogen in Q1, it said.

The rules will define hydrogen production that utilizes nuclear-powered electrolysis and carbon-capture enabled production via methane reformation.

"A clear regulatory framework is essential," the European Commission said. "The commission will therefore adopt in Q1 2025 the delegated act on low carbon hydrogen, to clarify the rules for producing low carbon hydrogen in a pragmatic way, providing certainty to investors."

It said it was also reviewing the delegated act on renewable fuels of non-biological origin -- renewable hydrogen and its derivatives such as ammonia -- "to assess the effectiveness of the hydrogen framework and identify possible barriers to the upscaling of renewable hydrogen."

Countries including Germany had been lobbying the EC to relax strict rules to match electrolytic hydrogen production with new renewable generation.

The EC will also launch a "Hydrogen Mechanism" in Q2 to connect suppliers and offtakers, and link developers with "financing and de-risking instruments" to aggregate demand in industrial and transport sectors.


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