EU's second hydrogen auction was also oversubscribed, with bids for 6.3 GW of electrolyzers

The second European hydrogen auction organized by the European Hydrogen Bank was, like the first one, which was launched in November 2023, oversubscribed. The total support requested for projects involving the construction of 6.3 GW of electrolyzers amounts to 4.8 billion euros. This is four times the budget available for the auction from the Innovation Fund. The European Union's Directorate-General for Climate reported this.

The second pan-European hydrogen auction attracted 61 bids from a total of 11 countries, according to published information. That is roughly half the number of bids compared with the first auction.

Despite the drop in the total number of bids, the auction was roughly four times oversubscribed. If all the submitted projects were implemented, 6.3 GW of electrolyzers would be built, producing more than 7.3 million tonnes of green hydrogen over 10 years. On an annual basis, this represents around 7% of the EU's 2030 green hydrogen production target.

"The number of bids in the second auction organized by the European Hydrogen Bank demonstrates the attractiveness of the Innovation Fund as a tool for decarbonizing European industry and ensuring its competitiveness. Continued interest from our industry supports the development of the European clean hydrogen market," said Wopke Hoekstra, European Commissioner for Climate, Net Zero and Clean Growth.

Average support requested fell by half

Producers that win the auction will be eligible for operating support for 10 years in the form of a fixed premium for each kilogram of renewable hydrogen produced. This premium is intended to cover the difference between the cost of producing hydrogen and the price buyers are willing to pay.

Participants in the first hydrogen auction requested a fixed premium ranging from 0.37 to 4.5 EUR/kg (the auction cap), with an average bid of 1.36 EUR/kg. Projects with a premium below 0.48 EUR/kg were successful. The average premium requested in bids in the second auction fell to roughly half the level in the first auction (0.67 EUR/kg).

The bids submitted will now be evaluated, and the results are due to be announced by the end of May this year. A third auction is then due to be announced before the end of this year.