EU Awards Contracts: Over €1 Billion for Industrial Decarbonisation and Gigawatt-scale Electrolysis Capacity
Brussels (Belgium) – The European Commission has awarded funding to nine hydrogen projects under a competitive auction conducted by the European Hydrogen Bank. In total, more than €1 billion in support funds will be allocated. The selected projects are expected to develop electrolysis capacity at gigawatt scale and enable significant CO? savings across Europe.
EU Hydrogen Bank awards funding contracts worth billions
The European Commission has selected nine hydrogen production projects under the third auction of the European Hydrogen Bank. The process is based on a competitive tendering procedure in which companies submit bids in euros per kilogram of hydrogen. Projects requiring the lowest level of support were awarded contracts until the available budget was exhausted.
In total, the EU is providing around €1.09 billion from the Innovation Fund of the EU Emissions Trading System. The selected projects will be implemented across seven countries in the European Economic Area and are expected to build around 1.1 gigawatts of electrolysis capacity. Over a ten-year period, production of more than 1.3 million tonnes of hydrogen is anticipated.
The hydrogen produced will primarily be used in energy-intensive sectors such as chemicals and transport. According to the Commission, this could avoid around nine million tonnes of CO? equivalent emissions. The support is provided through a fixed production premium ranging from €0.44 to €3.49 per kilogram of hydrogen, covering the difference between production costs and market prices.
The Hydrogen Bank as an industrial scaling instrument of the EU
With the European Hydrogen Bank, the European Commission is implementing the market mechanisms set out in the EU Hydrogen Strategy. At its core is a market-based auction system that does not distribute funding on a flat basis, but allocates it according to the lowest required level of support.
The Commission pursues three main objectives: first, guaranteed price premiums are intended to reduce investment risks for capital-intensive electrolysis projects. Second, the auction mechanism is expected to establish comparable price and cost signals for hydrogen across Europe. Third, scaling of production capacities is to be accelerated in order to build a globally competitive hydrogen economy in Europe.
In addition, the EU is strengthening coordination between European and national funding. Through the “Auctions-as-a-Service” mechanism, Member States can channel additional funding into the EU process. Germany is providing up to €1.3 billion, while Spain is contributing up to €440 million. The aim is to pool public investment more efficiently and avoid fragmented support schemes.
Industry and energy policy in transition
The selected projects cover a range of applications, including industrial use and maritime applications. A particular focus is placed on replacing fossil fuels in hard-to-abate sectors such as the chemical industry and shipping.
Among the awarded projects is the Finnish project “Cloudberry”, which with 500 megawatts of electrolysis capacity represents one of the largest single projects in the auction. In Germany, the project “Lotse” was selected with 120 megawatts of capacity, focusing on industrial applications. In Denmark, projects such as “NJK” and “ALBA” received funding, together accounting for several hundred megawatts of electrolysis capacity. In the maritime sector, Norwegian projects were also included, targeting hydrogen applications in shipping.
The projects must reach financial close within two and a half years and enter operation no later than five years after commencement. Implementation will be monitored and supported by the EU Executive Agency for Climate, Infrastructure and Environment (CINEA).
Source: IWR Online, 11 May 2026
