Germany first beneficiary of European Hydrogen Bank’s financing scheme

Authorities & Government

Germany will be the first member state to take part in the new EU mechanism ‘Auctions-as-a-service’ of the European Hydrogen Bank, with the federal government providing an additional €350 million for electrolyzer projects in Germany.

Courtesy of the European Commission; Credit: Mauro Bottaro

These are in addition to the €800 million that the EU Innovation Fund provides for projects across the EU, the German Federal Ministry for Economic Affairs and Climate Protection (BMWK) said, noting that the EU Commission (EC) invites the other member states to also make use of this option in future tenders.

Federal Minister for Economic Affairs and Climate Protection Robert Habeck stated: “Renewable hydrogen will play a key role in the process of global decarbonization. We welcome the fact that the Commission is rapidly pushing ahead with the market ramp-up for renewable hydrogen in the EU.”

“German participation in this tender helps us implement our national hydrogen strategy and creates an additional incentive for projects in Germany. This tender is a big step for policymakers and market participants in Germany and beyond, increasing the availability of renewable hydrogen and supporting the emerging renewable hydrogen value chain.”

Executive Vice President of the EU Commission for the Green Deal Maros Šefčovič added: “We will only make the transition to a climate-neutral EU and a decarbonized energy system by joining forces. I am very pleased that Germany is the first member state to use the Innovation Fund’s hydrogen pilot auction to support renewable hydrogen projects at a national level. Germany is a pioneer and I can only invite others to follow this example.”

EU Climate Commissioner Wopke Hoekstra commented: “European industry is a leader in the development of renewable hydrogen and has an impressive pipeline of projects ready to take part in the auction. The pilot auction under the Innovation Fund will help to incentivize the necessary final investment decisions to enable these projects to materialize and the European renewable hydrogen market to grow in size. It is great that Germany is on board for the first auction and I invite other member states to follow suit.”

To remind, on November 23, 2023, the EU Commission opened the first EU-wide call for proposals from the Innovation Fund to promote the production of renewable hydrogen.

At the time, the Commission said it expects the pilot auction to allow for the collection of reliable data about the EU’s renewable hydrogen project pipeline, the level of competition for this kind of support, the cost of renewable hydrogen production and its market price.

The “Auctions-as-a-service” mechanism is expected to enable member states to finance projects that have bid in the auction but have not been selected for Innovation Fund support due to budget limitations. This allows them to award national funding to additional projects on their territory, without the need to run a separate auction at the national level, reducing the administrative burden and cost for all parties.

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The European Hydrogen Bank was announced by EC President Ursula von der Leyen in her State of the European Union address in 2022 to support the EU’s domestic hydrogen production and imports from international partners of renewable hydrogen.