ICIS data shows that renewable hydrogen could be sold for below €1/kg ($1.09/kg) if a producer obtains the maximum support provided by the European Hydrogen Bank, according to the heads of terms for the bank published by the European Commission on March 31 (2023).
The bank, which was announced in September 2022, aims to support hydrogen producers using an auction bidding system, which ranks bidders according to price per kilo of hydrogen.
Utilising the Innovation Fund, the commission will allocate €800m ($874.2m) for the first auction for support from the bank, with subsidies capped at €4/kg ($4.37) of hydrogen. The hydrogen has to be aligned with the delegated act for renewable fuels of non-biological origin (RFNBO), also known as renewable hydrogen, and projects must reach full capacity within three-and-a-half years of being awarded funding. Funding is granted once hydrogen production starts.
Successful bidders will then be granted a fixed sum according to the volume bid, over the course of ten years. Bidders cannot win more than 33% of the available budget, and must have a project size of at least 5MW.
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