Austria, Lithuania, Spain to Offer $741 Million for Clean Hydrogen Projects

Austria, Lithuania and Spain plan to provide an estimated EUR 700 million ($740.87 million) in funding for renewable hydrogen production projects that would not be selected for European Union support under the upcoming European Hydrogen Bank auction.

The commitments raise the total funding on offer in the second European Hydrogen Bank auction to EUR 2 billion ($2.12 billion). The European Commission earlier announced up to EUR 1.2 billion ($1.27 billion) from the EU Innovation Fund. The auction will open December 3.

The three countries will avail of the “auctions-as-a-service” mechanism of the European Hydrogen Bank, a European Union funding program for scaling up hydrogen production.  Auction as a service allows countries to pick projects that participated in the auction but did not win EU funding. This mechanism allows member-states to have a competitive selection of projects to fund using their internal budgets without holding a national auction.

Spain has put forward between EUR 280 million ($296.35 million) and EUR 400 million ($423.35 million) for the upcoming auction, using funds from its Recovery and Resilience Plan (RRP). “The total support available will depend on the amount of funds used in the country' existing State aid scheme for hydrogen clusters and valleys, which is also funded from RRP resources”, said a joint statement by the trio and the European Commission. Spain will confirm the final amount of support by spring 2025.

Austria has pledged EUR 400 million using its national budget. Producers selected by Austria will be eligible for a maximum grant of EUR 200 million per project. To qualify, each project must have a maximum capacity of 300 megawatts.

Lithuania has allotted EUR 36 million ($38.1 million) using its portion from the EU Modernization Fund. “The country's participation in the Auctions-as-a-Service scheme will help reach its national target of 1.3 gigawatts of electrolysis capacity and 129 kilotonnes of renewable hydrogen production annually by 2030”, said the online statement.

“The mobilization of this additional funding under a single European auction platform is an efficient system that increases opportunities and reduces costs for industry”, the statement said. “In effect, participating companies in these countries are making one bid for two different sources of funding”.

The offers by Austria, Lithuania and Spain will have to undergo clearance by the Commission under EU state aid rules.

Last April the Commission approved a EUR 350 million ($370.44 million) German offer for projects that were not selected in the inaugural award of the European Hydrogen Bank.

“The approved scheme will support the construction of up to 90 MW of electrolysis capacity and is expected to incentivize the production of up to 75,000 tonnes of renewable hydrogen”, the Commission said in a statement April 5. “This will help Germany achieve its ambition to have at least 10 GW of domestic electrolysis capacity by 2030 and contribute to the EU target of a minimum of 42.5 percent renewable energy production by 2030, with the aim of reaching 45 percent”.

Under the first auction, seven projects across Finland, Norway, Portugal and Spain were awarded a total of EUR 720 million ($762.04 million).

“The winning bidders will produce renewable hydrogen in Europe and will receive a subsidy to bridge the price difference between their production costs and the market price for hydrogen, which is currently driven by non-renewable producers”, the Commission said in a statement April 30.

Three projects in Spain with a combined output of 595 MW electric were among the seven provisional winners, which must undergo individual grant agreements with the European Climate, Infrastructure and Environment Executive Agency. Renato Ptx Holdco will build the 500 mWe Catalina project, while the other two smaller projects are under Benbros Energy SL (the 60 mWe El Alamillo H2) and Angus (the 35 mWe Hysencia).

The two Portuguese projects in this cohort have a combined capacity of 700 mWe: Madoquapower 2x’s MP2X project (500 mWe) and Petrogal SA’s Grey2Green II project (200 mWe).

In Norway, the Skiga project by the namesake company has a 117 mWe capacity. Rounding up the inaugural award is the 90 mWe eNRG Lahti project of Nordic Ren-Gas Oy in Finland.

“Together, the winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO2 [carbon dioxide] emissions”, the Commission said.

“The renewable hydrogen they produce will be used in sectors such as steel, chemicals, maritime transport and fertilizers”, it said.

The seven projects were to receive subsidies of EUR 8 million ($8.47 million) to EUR 245 million ($25.93 million), according to the Commission.

To contact the author, email jov.onsat@rigzone.com