The EU has allocated over €1 billion to hydrogen projects aimed at decarbonization

The European Commission (EC) has allocated over €1 billion to the development of hydrogen energy, selecting nine projects as part of the European Hydrogen Bank’s third call for proposals. The initiative aims to accelerate the decarbonization of industry and strengthen the EU’s energy independence, according to a press release.

The projects will be implemented in seven countries of the European Economic Area and will provide approximately 1.1 GW of electrolyzer capacity. It is expected that over the first 10 years, they will produce over 1.3 million tons of hydrogen, which will prevent emissions of approximately 9 million tons of CO2.

Funding is provided through the EU Innovation Fund, which is financed by the emissions trading system. Selected projects will receive a fixed premium for producing “clean” hydrogen—ranging from €0.44 to €3.49 per kilogram over 10 years. This mechanism is designed to bridge the gap between market prices and production costs, thereby stimulating the industry’s growth.

National governments play a distinct role in the program. Germany and Spain will additionally mobilize up to €1.7 billion in their own funds through the “auctions-as-a-service” mechanism, which allows for supporting more projects without duplicating procedures.

The European Commission emphasizes that investments in hydrogen will help reduce emissions in transportation, the chemical industry, and other energy-intensive sectors, while strengthening the competitiveness of European industry.

Grant agreements are expected to be signed by the end of 2026. After that, projects must achieve financial closure within 2.5 years and begin operations no later than five years from then.

As a reminder, the EU previously approved a French scheme to support the production of renewable and low-carbon hydrogen. The scheme will support the construction of new 1 GW electrolyzers. Funding will be provided through competitive tenders planned in three phases.