The European Commission has released the anticipated Terms and Conditions (T&Cs) for the second auction of the European Hydrogen Bank, allocating an additional €1.2 billion to support the production of RFNBO hydrogen.
Hydrogen Europe commends numerous aspects of the new auction structure, the Commission having set a €4 per kilogram price cap, five-year timeline for project commissioning, and two-and-a-half-year deadline to reach final investment decision. These terms were explicitly sought after, almost unanimously, by Hydrogen Europe’s large and diverse membership. Meanwhile, the introduction of mandatory resilience criteria for the next call will greatly aid the push towards a more resilient, industrialised, and energy-secure Europe.
Jorgo Chatzimarkakis, CEO of Hydrogen Europe, commented: “The new terms set out for the second call of the Hydrogen Bank create a fertile environment for companies to invest in Europe. The introduction of resilience criteria marks a pivotal moment not only for the hydrogen sector but for the European Union as a whole. This bold step, aligned with the Net-Zero Industry Act and the recommendations of the Draghi report, underscores the importance of building a robust European supply chain. Equally important is the need to cut through red tape. Simplicity of implementation is an absolute must for the new mandate.”
Prospective projects bidding in the next call will have to limit the sourcing of electrolyser stacks (which include surface treatment, cell unit production and stack assembly) from China to a proportion of no more than 25% (in MWe) to fulfil this criterion. Compliance with European and international safety and cybersecurity standards will also be a mandatory requirement.
Less positive is the missed opportunity to expand cumulation flexibility, which would include projects already benefiting from funding, the introduction of sectoral baskets and the cap for maximum bid amounts, that might undermine participation. There is also no indexation to inflation, which could provide extra uncertainty in the event of price fluctuations.
The second auction is tentatively scheduled to launch by the beginning of December, right after our flagship event of the European Hydrogen Week 2024.
Hydrogen Europe remains committed to working with industry stakeholders and regulators to unlock the European hydrogen economy and enable the energy transition.
For more information:
- Final text of the T&Cs
- Q&A on the T&Cs
- European Commission’s page on competitive bidding
- The European Hydrogen Week website
Hydrogen Europe’s response to the consultation on the T&Cs
Hydrogen Europe is the European association representing the interest of the hydrogen industry and its stakeholders and promoting hydrogen as an enabler of a zero-emission society. With 600+ members, including 40+ EU regions and 30+ national associations, we encompass the entire value chain of the European hydrogen and fuel cell ecosystem. Our vision is to propel global carbon neutrality by accelerating European hydrogen industry.