The European Hydrogen Bank (EHB) is set to launch its second subsidy auction with a budget of €1.2 billion, a significant reduction from the anticipated €2.2 billion. This decision, announced during a stakeholder meeting in Brussels, marks a critical development in the EU’s commitment to advancing green hydrogen initiatives.
Despite initial projections set by European Commission President Ursula von der Leyen in November 2023, the actual allocation falls short by €1 billion, stirring reactions from industry stakeholders. The Renewable Hydrogen Coalition (RHC) expressed disappointment, citing the reduction as a setback in scaling up necessary hydrogen projects to meet competitive global standards. They emphasized the urgency of increasing the budget to maintain Europe’s competitive edge in green technology and sustainability.
The second auction, increasing by €400 million from the previous round, will now focus on supporting projects that can quickly transition to production phases, particularly targeting sectors like maritime, which are excluded from direct trade and intermediary activities. The European Commission, while maintaining the total €3 billion commitment for the EHB, clarified that the full amount was never intended to be exhausted in just two rounds of funding.
The first auction results, which saw a surprisingly low clearing price of €0.48 per kg of hydrogen, highlighted the competitive nature of the bids and the industry’s readiness to advance green hydrogen production. This low price point raised questions about the necessity and size of subsidies required to support the sector. However, industry experts argue that while the prices are low, the support is still crucial for accelerating the development of sustainable hydrogen technologies.
In addition to the EHB funding, the EU Innovation Fund’s budget for 2024 stands at €4.8 billion, with allocations also directed towards new battery projects and conventional grants. This comprehensive funding approach reflects the EU’s strategic efforts to diversify its energy portfolio and support a wide range of innovative energy solutions.
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