The European Commission has published the final Terms and Conditions (T&Cs) for its second auction for renewable hydrogen production, under the Innovation Fund. This auction, a key component of the European Hydrogen Bank (EHB), aims to provide financial support to producers of Renewable Fuel of Non-Biological Origin (RFNBO).

Scheduled to open on December 3, 2024, the auction will award up to €1.2 billion to hydrogen producers located in the European Economic Area (EEA). Building on the success of last year’s pilot auction, this initiative will further boost the European renewable hydrogen market by mitigating investment risks through public support.

The successful bidders under the IF24 Auction will receive a fixed premium in €/kg of renewable hydrogen produced, over a maximum of ten years of operation. The Innovation Fund support will bridge the gap between production costs and the price that off-takers’ are ready to pay for renewable hydrogen . 

The Terms and Conditions for the second auction include new resilience requirements, building on the lessons of the pilot auction and facilitating a contribution of EU funding to the objectives of the Net-Zero Industry Act (NZIA). Projects will be evaluated on a new criterion: “Achieving security of supply of essential goods and contribution to Europe’s industrial leadership and competitiveness”. The Commission will also ensure that support is provided to safe production processes in Europe through appropriate safety and cyber-security requirements. 

Other key features of the T&Cs for the second auction include:  

• Higher maturity level requirements for application; 
• A revised price ceiling; 
• A dedicated budget of €200 million for projects supplying their production to off-takers in the maritime sector.