Germany has emerged as the first Member State to embrace the European Union’s innovative “Auctions-as-a-Service” scheme under the umbrella of the European Hydrogen Bank.
This significant development, announced jointly by the Commission and Germany, marks a pivotal milestone in advancing sustainable and clean energy financing throughout Europe.
Germany, in a bid to fortify its position as a leader in renewable energy, has committed €350 million from its national budget for hydrogen production within its borders. This financial injection comes in addition to the €800 million earmarked for European projects from the EU Innovation Fund. The overarching goal is to not only accelerate Germany’s hydrogen production but also act as a catalyst for renewable hydrogen initiatives across Europe. The Commission is urging other Member States to follow Germany’s lead and leverage this innovative service for upcoming auctions.
The Commission initiated the first EU-wide auction under the Innovation Fund on November 23, 2023. Aligned with the objectives of the REPowerEU Plan, the Green Deal Industrial Plan, and the renewable hydrogen targets outlined in the Renewable Energy Directive, this auction aims to support renewable hydrogen production. Under this framework, the European Hydrogen Bank will bridge the financial gap for renewable hydrogen producers. The bank will cover the disparity between the cost of producing renewable hydrogen and the market price, determined through a competitive bidding process. Winning bids will be those requiring the least financial support per kilogram of hydrogen produced.
A key feature of the Hydrogen Bank’s initiative is the “Auctions-as-a-Service” scheme. This mechanism empowers Member States to finance additional projects beyond the initial allocation from the Innovation Fund. By leveraging this tool, Member States can identify and support competitive projects within their territories that might have missed out on EU funding. Participation is voluntary, and project developers must express their interest in utilizing this service as part of their bidding process. It’s important to note that any support provided by Member States through this service will be treated as State aid, requiring notification to the Commission. However, a streamlined State aid approval process is in place, aligned with EU guidelines on climate, environmental protection, and energy.
