The European Commission (EC) announced that the European Hydrogen Bank will be operational by the end of the year and based on four pillars.
The bank’s goal is to connect renewable hydrogen supply with European off-takers’ rising demand, according to EC message. Imports and domestic production will benefit.
Two of the four bank pillars in the letter are new funding instruments to boost EU and global production. The Commission is designing renewable hydrogen pilot auctions for the first one. In autumn 2023, the first auction will cost EUR 800 million. Hydrogen producers will receive a fixed bonus per kg of hydrogen generated for 10 years.
The second pillar auctions imports. Third-country suppliers or EU off-takers contracting with third-country producers might qualify for a green premium.
Transparency and coordination—assessing demand, infrastructure needs, hydrogen flows, and cost data—are the third and fourth bank pillars. The fourth involves coordinating and combining current financial instruments with new public and private investment in the EU and abroad.
The REPowerEU strategy from a year ago called for 10 million tonnes of renewable hydrogen production and the equivalent amount of imports by 2030.
To create, transport, and consume 10 million tonnes of renewable hydrogen, the EU would need EUR 335 billion to EUR 471 billion, including EUR 200 billion-300 billion for extra renewables. To meet import quantities, worldwide value chains will need EUR 500 billion. The Commission observed that private finance will account for most hydrogen industry investment.