The European Commission has launched its second European Hydrogen Bank (EHB) auction for green hydrogen producers, with a budget of €1.2bn ($1.26bn).
Backed by EU Emissions Trading Scheme (ETS) revenues through the Innovation Fund, the IF24 auction will provide per kilogramme subsidies to green hydrogen projects to bridge the cost gap with fossil fuels.
With a budget €400m ($420m) larger than the pilot auction, which signed its funding contracts with six projects in October, the new auction will provide €1bn ($1.05bn) for projects supplying hydrogen to any sector, with the remaining €200m ($210m) dedicated to maritime applications.
Project developers will now have until February 20, 2025, to bid for the subsidies, which come with a ceiling price of €4/kg ($4.21/kg) of green hydrogen.
The first auction had a ceiling price of €4.5/kg ($4.73/kg). However, no project gained any more than €0.5/kg ($0.53/kg).
Read more:EHB pilot auction awards €694m after Spanish withdrawal
If successful, bidders will sign grant agreements within nine months after the call closure. Under the conditions of the funding, projects will also need to begin producing within five years of signing the agreement.
The EU’s climate chief, Wopke Hoekstra, said, “Under the Innovation Fund, we’re putting revenues from the ETS to work, once again.”
However, amid concerns about an impending influx of cheaper Chinese electrolysers, the IF24 auction also introduces limits on the amount of technology that can be imported from China.
Under the criteria, a project will be able to source no more than 25% of its electrolyser stacks from Chinese manufacturers, which applies to surface treatment, cell production and stack assembly.
It came after the likes of Nel, Siemens, thyssenkrupp nucera and more putting their names to a letter sent to the European Commission warning of the “acute threat” posed by Chinese OEMs.
Read more:Europe’s hydrogen ambitions tested: Can electrolyser OEMs compete?
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