Renewable hydrogen producers, as categorised in the 

. The Commission will notify applicants by April 2024, with successful candidates required to finalise grant agreements within nine months post-auction closing. An 

, where applicants can ask questions to the European Climate, Infrastructure and Environment Executive Agency (CINEA), is scheduled for 30 November.

The bidding process involves proposing a price premium per kilogram of renewable hydrogen, with a ceiling of EUR 4.5/kg. Bids will be evaluated and selected from the lowest to the highest bid prices until the allocated budget is exhausted. Awarded projects will receive the subsidy in addition to their earnings from physical hydrogen sales for a duration of up to ten years. Once projects have signed their grant agreements, they must commence the production of renewable hydrogen within five years. 

Assuming an average subsidy of EUR 3/kg, the auction cap will be sufficient to support nearly 600,000 MW electrolysers, and only 400,000 MW if all projects need the maximum support level of EUR 4.5/kg.*

* The energy consumption of electrolysis for producing hydrogen is typically around 50-55 kilowatt-hours (kWh) per kilogram of hydrogen. In this calculation, an average energy consumption of 52.5 kWh/kg (midpoint of 50-55 kWh/kg) is used.

In addition, the European Commission is initiating a novel “

” scheme under the European Hydrogen Bank (EHB) framework. Following this concept, the Commission will first operate a single auction to select the projects to be awarded under the Innovation Fund budget (EUR 800 million) and after identifying unsuccessful projects from the auction to be granted support from the national budget. This approach allows Member States to award national funds to projects in their territory that participate in the auction but are unable to secure support due to budget limitations, eliminating the need for separate national auctions.

1123 EHB auction 

Participation in the Auctions-as-a-service scheme is voluntary for Member States. Any support provided by Member States through this mechanism will be considered as State aid and must be reported to the Commission. The Commission aims to streamline the approval process since the auctions are designed at the EU level in accordance with the 

Guidelines on State aid for climate, environmental protection and energy

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 has launched the inaugural auction under the European Hydrogen Bank (EHB) programme to support renewable hydrogen production in Europe. The pilot auction offers a EUR 800 million pool of aid, allocated from the Innovation Fund, and opens between 23 November 2023 and 8 February 2024 (see our 

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The European Hydrogen Bank auction launched

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