Third Hydrogen Auction Open to Low-Carbon Hydrogen

The European Commission has published the drafted Terms & Conditions for the third auction round of the European Hydrogen Bank. Until mid-September interested parties can submit their comments. The draft is available on the website of the Directorate-General for Climate Action.

Low-carbon hydrogen eligible for funding

The third auction round follows the widely noted first two phases of a key support mechanism through which the EU aims to accelerate the market ramp-up of renewable hydrogen. According to the draft, the Commission is planning several procedural adjustments: for the first time, low-carbon hydrogen that does not meet the strict RFNBO criteria will also be eligible for funding. Under the definition recently adopted by the EU, the production of low-carbon hydrogen must result in at least 70% lower greenhouse gas emissions compared to the use of fossil fuels.

Funding split across three areas

In the previous auction round, which also saw the selection of two German projects, a total of one billion euros was made available. The current draft proposes a total of €1.1 billion in funding from the European Emissions Trading System (ETS), divided across three subject areas. 400 million Euros are to be allocated to projects that produce either low-carbon hydrogen or hydrogen in line with the RFNBO criteria. Another 400 million Euros are reserved exclusively for projects that produce hydrogen fully in accordance with the RFNBO standards. 200 million Euros are earmarked for projects producing low-carbon or RFNBO-compliant hydrogen supplying the maritime sector.

Tender expected in fall 2025

The support will take the form of a fixed premium per kilogram of hydrogen produced, granted over a ten-year period. The maximum has been set at premium of 4 Euros per kilogram (4.58 USD). Comments on the draft can be submitted via the official EU portal. The final auction launch is expected to take place in autumn 2025.