EC approves Spanish hydrogen auction under European Hydrogen Bank

The European Commission has approved the Eur400 million ($450 million) Spanish green hydrogen "auction as a service" scheme under the second round of the European Hydrogen Bank support mechanism, it said in a statement April 15.

The state aid scheme supports Spanish renewable hydrogen production projects through the second EU Hydrogen Bank subsidy auction, which closed in February.

"The approved scheme will support construction of up to 345 MW of installed electrolyzer capacity, and the production of up to 221,000 mt of renewable hydrogen in Spain," the EC said.

The service allows member states to support renewable hydrogen production projects within the country that applied for support under the Hydrogen Bank auction but were unsuccessful at the EU level.

The measures could avoid up to 1 million mt of CO2 emissions, the EC said.

Spain is targeting 12 GW of installed electrolysis capacity by 2030.

The EU's second Hydrogen Bank auction was four times oversubscribed, drawing bids from 61 projects across 11 countries, the European Commission said March 7. Winners are expected to be announced by the end of May.

Winners will receive a fixed premium subsidy for renewable hydrogen production over a period of 10 years, with a price ceiling of Eur4/kg.

Total grant support requested for the second auction was over Eur4.8 billion, compared with the available budget of Eur1.2 billion, backed by the EU Innovation Fund.

The EC said the applications represented 6.3 GW of electrolysis capacity, covering around 7% of the EU's 2030 target domestic renewable hydrogen production capacity.

The first auction in 2023 awarded Eur694 million to support six projects in Iberia and the Nordics totaling around 1.5 GW of production capacity, clearing below 50 euro cent/kg.

Platts, part of S&P Global Commodity Insights, assessed the cost of green hydrogen production via alkaline electrolysis in Spain, backed by renewable power purchase agreements, at Eur5.00/kg ($5.67/kg) on April 14, down from a peak of over Eur11/kg in mid-December.

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

The EC in March approved similar state aid schemes from Austria and Lithuania for auctions as a service under the second Hydrogen Bank round, with Eur400 million from Austria and Eur36 million available from Lithuania.

The approved schemes will support production of up to 112,000 mt of hydrogen in Austria and 13,000 mt in Lithuania, avoiding a total of up to 597,000 mt of CO2, the EC said.

A third EU Hydrogen Bank auction will launch in the third quarter of 2025, with a budget of Eur1 billion.