Strong competition once again – a categorisation of the results of the second hydrogen auction under the Innovation Fund

published on July 3, 2025

After the first round of auctions already showed that there is considerable interest in funding renewable hydrogen production projects, the second round confirms this picture – with even stronger competition, high participation, and once again significant underbidding of the maximum permissible price.

The Innovation Fund is one of the world's largest funding instruments for low-carbon and innovative technologies. It is financed by revenues from the EU Emissions Trading System (EU ETS) and is expected to provide around €40 billion between 2020 and 2030, depending on the carbon price.

Figure 1: Classification of the Innovation Fund in the European funding landscape
for low-carbon and innovative technologies

(source: What is the Innovation Fund? – European Commission)

How the hydrogen auction works

In order to specifically promote the market ramp-up of renewable hydrogen, the European Commission has introduced an auction mechanism as part of the Innovation Fund. This instrument is part of the “domestic leg” of the European Hydrogen Bank. The European Hydrogen Bank acts as a coordination and financing platform to ensure Europe's supply of cost-efficient, renewable hydrogen.

The auction mechanism follows a “pay-as-bid” model with a fixed premium. Project developers submit bids specifying the amount of funding they need per kilogram of renewable hydrogen produced – i.e., the exact amount that closes the gap between the actual production costs and the price achievable on the market. The projects with the lowest bids receive funding until the allocated budget is exhausted.

Results of the second auction round

The second auction round (IF24 Auction) was completed on February 20, 2025. A total of €1.2 billion in funding was available, including, for the first time, a dedicated budget of €200 million for projects with customers in the maritime industry.

By the deadline, 61 bids had been received from eleven countries, eight of which were for the maritime sector. The applicants requested a total of around €4.88 billion, underscoring the growing interest and competition in the hydrogen sector.

On May 20, 2025, the European Commission published the results: 15 projects from five countries were selected for funding and will receive a total of €992 million.

Project name	Coordinator	Country	Bid volume (kt H₂ / 10 years)	Electrolysis capacity (MW)	Expected GHG avoidance (kt CO₂e / 10 years)	Bid price (EUR / kg)
No customer restrictions
VILLAMARTI N H2	GALENA RENOVABLES 6, S.L.	Spain	126	252	895	0,20
PUERTO SERRANO H2	GALENA RENOVABLES 7, S.L.	Spain	49	98	337	0,25
Kristinestad PtX	Koppö Energia Oy	Finland	258	200	1.763	0,33
SolWinHy Cadiz	Viridi RE GmbH	Spain	63	80	431	0,40
H2LZ	IGNIS HIDROGENO ALFA	Spain	26	20	179	0,41
AGS	ARMONIA GREEN SEVILLA	Spain	238	198	1.631	0,41
AGG280	ARMONIA GREEN GALICIA, S.L.	Spain	238	198	1.629	0,42
H2CRI	GREEN DEVCO ENERGY 6, S.L.U.	Spain	30	30	204	0,44
KASKADE	Meridiam SAS	Germany	354	367,5	2.424	0,45
H2-Hub Lubmin	H2-Hub Lubmin GmbH	Germany	238	210	1.628	0,47
TORDESILLASH2	Elawan Energy	Spain	17	15	115	0,48
Zeevonk Electrolyser	Zeevonk Electrolyser	Netherlands	411	560	2.812	0,60
Customers in the maritime industry
RjukanH2	NORWEGIAN HYDROGEN AS	Norway	29	18,75	201	0,45
Gen2-LH2	Gen2 Energy AS	Norway	104	82,21	714	0,59
HammerfestH2	GREEN H AS	Norway	12	7,5	80	1,88

Table 1: Results of the second auction round

(source: IF24 Auction – European Commission)

All funded projects must reach financial close within 2.5 years of signing the contract and begin hydrogen production after five years at the latest. In addition, they will only receive their fixed premium after the hydrogen has been certified and verified as “RFNBO hydrogen” (renewable fuel of non-biological origin – RFNBO).

Comparison and classification of the results of the first and second auction rounds (excluding projects with customers in the maritime industry)

	IF23 Auction	IF24 Auction
Permissible maximum price	4,5 €/kg	4 €/kg
Average surcharge value	0,44 €/kg	0,41 €/kg
Highest surcharge value	0,48 €/kg	0,6 €/kg
Lowest surcharge value	0,37 €/kg	0,2 €/kg

Table 2: Comparison of the first two auction rounds
(excluding projects involving maritime industry customers, as separate funds were available for these)

(source: European Hydrogen Bank auction provides €720 million and IF24 Auction – European Commission)

Compared to the first auction round, the environment remains highly competitive. Although the maximum permissible price was reduced from €4.50/kg to €4.00/kg, the average award value was again significantly lower at €0.41/kg. The lowest bid price was even lower at just €0.20/kg. As in the first round, the high concentration of awarded projects in Spain is striking.

The two auction results thus also show that renewable hydrogen can already be produced at prices close to competitive market prices in certain regions of the European Economic Area, provided that access to cheap renewable energy is secured, clear regulatory framework conditions prevail, and there is guaranteed demand.

Upcoming new auction round in 2025

As announced in the Clean Industrial Deal, there will be another auction round for renewable hydrogen by the end of 2025, with a funding volume of up to €1 billion (source: Competitive bidding – European Commission). We will keep you up to date.

We are happy to assist you with regulatory and economic questions relating to hydrogen.

Are you interested in public funding? We will show you the way and accompany you from the project idea to the proof of use. Feel free to take a look at our new brochure.

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¹ Based on an assumed price of EUR 75 per tonne of CO₂.

²A buyer is deemed to be active in the maritime sector if it uses the hydrogen or a corresponding derivative produced as part of the project to carry out or use bunkering activities in ports within the EU/EEA. Bunkering includes the supply of energy sources for ship propulsion or on-board energy supply.

Sources:

Competitive bidding – European Commission

Calls for proposals – European Commission

What is the Innovation Fund? – European Commission

IF24 Auction – European Commission

Press corner | European Commission

Erste Wasserstoffauktion unter dem Innovation Fund startet am 23.11.2023 | Rödl & Partner

https://climate.ec.europa.eu/document/download/e0cb2657-d834-44c0-af2c-efbdf7cecd53_en?filename=20241114_ifeg_presentation_en.pdf