Belgium– European Commission is set to open the first tender for 800 million euros in aid to community manufacturers of green hydrogen. This initiative marks the inauguration of the European Hydrogen Bank, designed to catalyze the growth of a burgeoning industry.
President Ursula Von der Leyen unveiled the plan during the European Hydrogen Week in Brussels, outlining a strategic roadmap that includes an additional 2.2 billion euros in subsidies scheduled for a spring 2024 auction, bringing the total to an ambitious 3 billion euros.
In the first tender, the bank will focus on covering the “green bonus” in hydrogen production from renewable electricity. This bonus represents the variance between the cost of producing renewable hydrogen and the prevailing market price. Winning bids will be awarded to producers requiring the least economic assistance per kilogram of hydrogen, promoting efficiency and competitiveness in the sector.
Advancing green hydrogen
Ursula Von der Leyen highlighted the Commission’s commitment to green hydrogen projects by revealing that Brussels has authorized 17 billion euros for approximately 80 such projects across the EU in the last four years. This financial backing underscores the Commission’s dedication to advancing the green hydrogen sector, which is seen as a crucial energy vector with the potential to revolutionize various industrial applications and serve as a sustainable solution for maritime and aviation transport.
The European Union envisions producing 10 million tons of green hydrogen by 2030, equivalent to 14% of the bloc’s electricity consumption, while also importing an equivalent amount. In parallel, the Commission is forging alliances with countries such as Egypt, Nigeria, Kenya, and several Latin American states. Von der Leyen highlighted a significant project in Brazil involving a 10-gigawatt clean hydrogen and ammonia initiative, with the EU investing 2 billion euros. The aim is to transport the product by ship to Croatia and distribute it to Southeast Europe.
Future hydrogen subsidy auctions
The announcement of the second round of auctions, slated for spring 2024, solidifies the Commission’s long-term commitment to nurturing the green hydrogen sector. The auctions under the European Hydrogen Bank aim to provide a fixed premium to winning hydrogen producers, fostering cost reduction and enhancing the competitiveness of green hydrogen within the European Union.
