The European Union has taken another step toward scaling up renewable hydrogen production, as six projects selected under the 2024 Innovation Fund Hydrogen Auction have signed their grant agreements
These three projects will receive €270.6 million in EU funding, sourced from revenues of the EU Emissions Trading System (ETS), to support the deployment of renewable hydrogen across key industrial and transport sectors.
The selected projects are located in Spain, Finland, and Norway and are expected to play a significant role in decarbonising hard-to-abate sectors, particularly heavy industry and transport. Two of the six projects fall under a dedicated maritime category and have received more than €35 million to supply renewable hydrogen to maritime users.
Supporting Europe’s hydrogen market
The Innovation Fund Hydrogen Auction operates under the domestic pillar of the European Hydrogen Bank, an EU initiative designed to scale up hydrogen production and strengthen market integration across Europe. Its objective is to replace fossil fuels such as natural gas, coal, and oil in sectors where electrification alone is not sufficient.
Through a market-based mechanism, the Innovation Fund provides a fixed premium per kilogram of renewable hydrogen produced. This funding bridges the gap between production costs and the price industrial users are currently willing to pay, helping to reduce investment risks and simplify administrative procedures for project developers.
All hydrogen produced under the scheme qualifies as renewable fuel of non-biological origin (RFNBO), in line with EU sustainability criteria.
Significant climate impact expected
Collectively, the six projects are expected to produce around 500 kilotonnes of renewable hydrogen over a ten-year operational period. This output is projected to avoid nearly 3.4 million tonnes of CO₂ emissions, based on conservative estimates using existing ETS benchmarks.
The hydrogen will primarily be used in sectors such as the chemical industry and mobility, with a strong focus on decarbonising maritime transport and heavy-duty vehicles. These sectors are still among the most challenging to decarbonise and are central to the EU’s climate-neutrality objectives.
Diverse projects across Europe
The projects will install a combined electrolyser capacity of 381.25 megawatts, with individual installations ranging from 5 to 200 megawatts electric (MWe). Grant amounts vary significantly, from €1.8 million for smaller projects to €135.5 million for the largest installation.
Bid prices submitted in the Innovation Fund Hydrogen Auction ranged from €0.33 to €1.88 per kilogram of renewable hydrogen, reflecting differences in project scale, location, and technological approaches. The lowest bid was submitted by a large-scale project in Finland, while higher bids were associated with smaller installations and maritime-focused projects in Norway.
National funding through auctions-as-a-service
Alongside the EU-level awards, Spain, Lithuania, and Austria have allocated up to €836 million in national funding through the Innovation Fund’s Auctions-as-a-Service mechanism. This feature allows Member States to support additional projects that meet auction criteria but could not be funded directly due to budget limitations.
By using the EU auction platform, participating countries can award national funding through a streamlined process while maintaining consistent evaluation standards. Projects supported under this mechanism will be announced by the respective national authorities.
What comes next
The European Climate, Infrastructure and Environment Executive Agency will accompany the selected projects throughout their development phase, supporting compliance with Innovation Fund requirements and progress toward financial close and construction.
Projects must reach financial close within 2.5 years and begin producing renewable hydrogen within 5 years. Once operational, they will receive the fixed premium for up to ten years based on verified hydrogen production.
Meanwhile, the European Hydrogen Bank is already preparing the next round. The third Innovation Fund Hydrogen Auction, launched in December 2025, offers a budget of up to €1.3 billion, with proposals due by 19 February 2026.
