Federal Ministry for Economic Affairs participates in EU ‘Auctions-as-a-Service’ mechanism of the European Hydrogen Bank

The European Commission has today launched the third round of its EU-wide Innovation Fund auction to promote the production of renewable and low-carbon hydrogen. For this type of hydrogen produced in the EU, the Hydrogen Bank covers the gap between the cost of producing renewable hydrogen and the price that buyers are willing to pay. The exact level of support is determined through a competitive bidding process. Producers of renewable or electrolytically produced low-carbon hydrogen who offer the lowest support amount in euros per kilogram of hydrogen produced are awarded the contract.

Germany is taking part in the European Hydrogen Bank’s IF25 auction through the EU ‘Auctions-as-a-Service’ mechanism, contributing €1.3 billion to support this initiative. Initially, the goal is to supply consumers connected to the German core network with renewable hydrogen as efficiently as possible. In addition, targeted incentives will be introduced to develop cross-border hydrogen pipeline infrastructure, which might otherwise not be realised or could be significantly delayed, and which would enable the future import of market-driven hydrogen. As part of Germany’s participation in the European Hydrogen Bank’s IF25 auction through the EU ‘Auctions-as-a-Service’ window, the renewable hydrogen must be fed into the ‘Danish Hydrogen Backbone 1’ pipeline and delivered to consumers connected to the German hydrogen core network.

The Hydrogen Bank’s ‘Auctions-as-a-Service’ mechanism allows Member States to fund additional projects participating in the auction that can no longer be supported from the Innovation Fund budget. This mechanism enables Member States to identify and support competitive projects in their territory without requiring a separate national auction. Project developers must indicate in their bid that they wish to use ‘Auctions-as-a-Service’ in order to qualify for selection under this mechanism.

Germany’s participation is subject to the availability of budgetary funds and approval under EU State aid rules by the European Commission.