On November 18, the European Commission and the governments of Spain, Lithuania, and Austria announced new financial support for renewable hydrogen through the Innovation Fund. These countries will participate in the ‘Auctions-as-a-Service’ scheme as part of the second European Hydrogen Bank auction, set to launch on December 3.
The EU provides €1.2 billion from the Innovation Fund, while the three Member States will contribute over €700 million in national funds. This brings the total funding for the ‘IF24’ auction to around €2 billion.
“Renewable hydrogen will be crucial for the decarbonisation of our economy, especially in hard to abate industry sectors. European companies need our support to keep up their competitive edge. I am pleased to see that Spain, Lithuania and Austria have decided to contribute to our European efforts to create a hydrogen market with new financial contributions. I can only invite others to follow this good example,” Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight, said.
With a budget of €40 billion from 2020 to 2030 from EU Emissions Trading System revenues, the Innovation Fund incentivises investments in low-carbon technologies, supporting Europe’s climate neutrality goals. So far, it has awarded about €7.2 billion for innovative projects.
The ‘Auctions-as-a-Service’ will enhance the rollout of renewable hydrogen, while the European Hydrogen Bank aims to facilitate domestic production and imports, close the investment gap, and connect supply to consumers. These initiatives are crucial for achieving REPowerEU’s objectives.
“Producing renewable hydrogen in Europe is a key part of reaching climate neutrality and boosting industrial competitiveness. This Auctions-as-a-Service scheme is a testimony to the benefits of cooperation between the Commission and the Member States. We need to join forces to create business opportunities in this key sector. I am pleased to see Spain, Lithuania and Austria embarking on this journey with us, and I encourage all the other Member States to consider this option. In that way, we can accelerate the development of a truly European hydrogen market that brings us closer to climate neutrality by mid-century,” emphasised Wopke Hoekstra, Commissioner For Climate Action and responsible for transport.
Spain is allocating between €280 million and €400 million for a new scheme using funds from its Recovery and Resilience Plan (RRP). The total support available will depend on the funds utilised in the existing State aid scheme for hydrogen clusters. The final amount is expected to be confirmed by spring 2025.
Lithuania is designating around €36 million from its Modernization Fund to help achieve a national target of 1.3 gigawatts (GW) of electrolysis capacity and 129 kilotonnes of renewable hydrogen production annually by 2030.
Austria is committing €400 million from its national budget. Hydrogen producers can apply for grants up to €200 million per project, with a maximum capacity of 300 megawatts (MW) supported in this auction.
The European auction platform increases funding opportunities and reduces costs for participating companies. It allows Member States to finance additional projects even after the Innovation Fund’s budget is fully utilised. The Commission encourages other Member States to join the Auctions-as-a-Service scheme to support the REPowerEU Plan and renewable hydrogen targets.
