Policy

Germany cleared to award €350m to domestic hydrogen producers as part of recent EU auction

Funding can support up to 90MW of electrolysis capacity bid in as part of €800m European Hydrogen Bank pilot

Robert Habeck , on the left , and Maroš Šefčovič . Robert Habeck, Germany's economics and climate protection minister, and Maros Sefcovic, the European Commission's executive vice president for the Green Deal, who is also in charge of the European Hydrogen Bank.
Robert Habeck , on the left , and Maroš Šefčovič . Robert Habeck, Germany's economics and climate protection minister, and Maros Sefcovic, the European Commission's executive vice president for the Green Deal, who is also in charge of the European Hydrogen Bank.Photo: EU
Deputy Editor

The European Commission (EC) has approved Germany’s request to award €350m ($379m) to domestic electrolysis projects bidding in to the recent European Hydrogen Bank (EHB) pilot auction — effectively piggy-backing its own scheme on top of the EHB’s €800m programme.

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The results of the vastly oversubscribed pilot auction are due next month, according to EU officials last week, and this latest approval will make Germany the first country to use the EHB’s “auctions as a service” platform to allocate its own funds to domestic green H2 producers.

The German funds can be expected to help finance up to 90MW of eligible electrolysis capacity — defined as bidders on the EHB pilot auction located within Germany — and produce up to 75,000 tonnes of green H2.

The EHB programme offers ten-year fixed-price premiums for each kilo of green H2 produced, with the aim of bridging the cost gap between renewable hydrogen (and its derivatives such as green ammonia and methanol) and polluting equivalents made with fossil fuels.

Producers bid for a fixed-price per-kg premium in a closed auction up to a ceiling price of €4.50/kg, with the lowest eligible bids (weighted against a range of other criteria such as sustainability) picked first, continuing until the budget is exhausted.

The aim is to give domestic green hydrogen developers the revenue certainty they need to secure project financing.

“This €350m scheme is an important step in boosting renewable hydrogen development,” said Margrethe Vestager, the EC’s executive vice-president in charge of competition policy. “The scheme will support the most cost-effective projects in Germany, reducing costs for taxpayers and minimising possible distortions of competition. Germany is the first member state to make use of this auction, which offers an accelerated solution for awarding public support in this important sector.”

Austria has also expressed an interest in using the auctions-as-a-service platform to finance domestic green hydrogen production, and has earmarked €400m for this purpose.
The Austrian funds are likely to be piggy-backed onto the EU’s upcoming €2.2bn green hydrogen auction on the European Hydrogen Bank, due in the autumn.

Germany has already earmarked billions of euros as part of its H2Global programme — on which the EHB is based — for green hydrogen imports from non-European countries.

(Copyright)
European Hydrogen BankSubsidiesGermanyEuropean CommissionEU
Published 8 April 2024, 12:21Updated 8 April 2024, 12:21