Germany takes a step forward in the path towards green hydrogen development by becoming the first Member State to participate in the new EU mechanism "Auctions as a Service" of the European Hydrogen Bank. Now, the German government is providing an additional 350 million euros for electrolyser projects in Germany.

"We will only achieve the transition to a climate-neutral EU and a decarbonized energy system by joining forces. I am very pleased that Germany is the first Member State to use the Innovation Fund's hydrogen pilot auction to promote renewable hydrogen projects at national level. Germany is a pioneer and I can only invite others to follow suit," Executive Vice-President of the European Commission for the Green Deal Maros Šef?ovi? said.

This is in addition to the 800 million euros that the EU Innovation Fund has earmarked for projects across the EU. The additional financial resources are intended to stimulate and finance further projects for renewable hydrogen.

Federal Minister for Economic Affairs and Climate Protection Robert Habeck said that "renewable hydrogen will play a key role in the process of global decarbonization. We welcome the fact that the Commission is rapidly driving forward the market ramp-up for renewable hydrogen in the EU. The German participation in this tender helps us to implement our national hydrogen strategy and creates an additional incentive for projects in Germany. This tender is a big step for policy makers and market participants in Germany and beyond, increasing the availability of renewable hydrogen and supporting the emerging value chain for renewable hydrogen."

For his part, EU Commissioner for Climate Action Wopke Hoekstra explained that "European industry is at the forefront of renewable hydrogen development and has an impressive pipeline of projects ready to participate in the auction. The pilot auction under the Innovation Fund will help incentivize the necessary final investment decisions to bring these projects to fruition and grow the European renewable hydrogen market. It is great that Germany is on board for the first auction and I invite other Member States to follow suit."

How does this work?

The “Auctions-as-a-Service” scheme within the Hydrogen Bank enables Member States to finance additional projects participating in the auction after the Innovation Fund's budget has been allocated. With this instrument, Member States can identify and support competitive projects on their territory that have not secured EU funding without the need for a separate national auction process. Member States participate on a voluntary basis.

According to the scheme, project developers must also express their interest in using the "Auctions-as-a-Service" in their bid to be eligible for selection under this scheme.  Any support offered by Member States through this service will be considered as State aid. Member States must notify their support to the Commission but will benefit from a streamlined State aid approval process, as the auctions are designed at EU level in line with the Guidelines on State aid for climate, environmental protection and energy.

The pilot auction will end on February 8 and the winners are likely to be announced in April 2024.