Six renewable hydrogen projects awarded under the 2024 Innovation Fund auction secured €270.6 million in grants, translating into an average support level well below €1 per kilogram for several winners.
The lowest successful bid, €0.33 per kilogram, submitted by Finland’s Kristinstad PtX project, illustrates how sharply bid prices have fallen compared with earlier policy assumptions about green hydrogen support requirements.
The projects selected under IF24 span Spain, Finland, and Norway and collectively represent 381.25 megawatts of electrolyzer capacity. Over a ten-year operating period, they are expected to produce close to 500 kilotonnes of renewable hydrogen and avoid nearly 3.4 million tonnes of CO₂, based on a conservative benchmark of 6.84 tonnes of CO₂ equivalent per tonne of hydrogen. Even with this conservative methodology, the implied abatement cost varies widely, reflecting differences in electricity sourcing, scale, and end-use integration.
Finland’s Kristinstad PtX, coordinated by Koppö Energia Oy, dominates the auction by volume, accounting for 258 kilotonnes of hydrogen over ten years and 200 megawatts of capacity. Its bid price of €0.33 per kilogram is significantly below projects in Spain, where bids ranged from €0.44 to €0.85 per kilogram for capacities between 5 and 120 megawatts. The spread underscores persistent structural differences across European power markets and permitting regimes, despite harmonized auction rules.
Spain’s presence remains strong, with four selected projects under the general topic category. Iberdrola Clientes’ NOON project alone represents 161 kilotonnes of hydrogen and 120 megawatts of capacity, but at a bid price more than double the Finnish benchmark. This divergence suggests that cost competitiveness is still heavily shaped by local renewable electricity profiles and grid constraints, rather than purely by electrolyzer scale or developer experience.
Maritime hydrogen, often framed as a priority segment due to limited electrification alternatives, secured just over €35 million across two Norwegian projects. RjukanH2 and HammerfestH2 together represent less than 11 percent of total awarded capacity, with bid prices of €0.45 and €1.88 per kilogram respectively. The higher cost of the Hammerfest project highlights the challenge of deploying renewable hydrogen in remote or energy-intensive maritime hubs, where infrastructure and logistics inflate delivered costs.
All awarded hydrogen must meet RFNBO criteria, aligning the auction with the European Union’s most stringent definition of renewable hydrogen. This requirement strengthens regulatory credibility but also narrows the pool of viable projects, particularly in regions with constrained access to additional renewable power. The auction’s fixed premium model is designed to bridge the gap between production costs and what industrial and transport users are willing to pay, yet it does not eliminate exposure to long-term offtake risk if demand develops more slowly than expected.
The Innovation Fund auction under the European Hydrogen Bank’s national pillar aims to de-risk early supply rather than guarantee market absorption. While the selected projects target sectors such as chemicals, heavy transport, and maritime applications, the auction structure does not mandate firm long-term offtake agreements at scale. This leaves open questions about whether hydrogen volumes will be absorbed domestically or face cross-border transport and certification hurdles.
National top-ups through the Auctions-as-a-Service mechanism reveal another layer of fragmentation. Spain, Lithuania, and Austria have earmarked up to €836 million in additional national funding for projects that met EU criteria but fell outside the central budget. While this approach accelerates deployment, it also reinforces uneven support intensity across Member States, potentially distorting location decisions for future projects.
From an investor perspective, timelines remain tight. Projects must reach financial close within two and a half years and begin producing within five. Given current bottlenecks in electrolyzer manufacturing, grid connections, and permitting, these deadlines will test whether low bid prices reflect genuine cost reductions or aggressive assumptions that may prove difficult to realize in construction and operation.
The European Hydrogen Bank has already launched its next auction cycle with a €1.3 billion budget, signaling continuity rather than course correction. The IF24 results suggest that competitive pricing is emerging faster than demand certainty.
