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European Hydrogen Bank
The European Hydrogen Bank is one of key initiatives announced by the European Commission in 2023, to be deployed in the subsequent 2 years. The aim of the Bank is to bridge the investment gap between supply and demand of renewable hydrogen to achieve the REPowerEU targets.
The Hydrogen Bank is an instrument implemented by DG CLIMA, consisting of two new financing mechanisms to support RFNBO hydrogen production (an later also low-carbon hydrogen in certain scenarios): one for production within the EU and one for international production, i.e. imports. The Bank governance is structured in four pillars: domestic financing mechanisms, international financing mechanism, transparency and coordination for demand visibility, and coordination and facilitation of financial blending.
Domestic market
Under the first pillar, the goal is to support the creation of a domestic market through an auction-based mechanism under the EU Innovation Fund.
Under the domestic pillar, the Bank can also be used as an Auction-as-a-Service for Member States, enabling them to use their own resources for projects on their territory by through the established EU-wide auction mechanism.
The first auction (IF23 Auction) was launched in November 2023 and ran until February 2024. The auction aimed to support RFNBO production (as defined in the Renewable Energy Directive), with the bid price as the requested unit contribution (fixed premium) per kg of RFNBO hydrogen production, which will be paid for a maximum of 10 years. Only projects with a minimum installed capacity of 5 MW electrolysis were eligible. The budget for the first auction was €800 million.
In October 2024, six winners of European Hydrogen Bank’s first competitive bidding signed their grant agreement. For a total of 695 € million, with a plan to produce 1.5 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO2 emissions.
The European Commission officially launched the second European Hydrogen Bank auction (IF24 Auction) in December 2024, significantly increasing the total budget to €1.2 billion. RFNBO hydrogen producers could bid for a fixed-price premium of up to €4 per kilogram of hydrogen produced over 10 years.
The auction was structured into two baskets: a general basket (€1 billion) and a newly introduced Maritime basket (€200 million). The second Hydrogen Bank auction closed in February 2025 and six projects across Finland, Spain and Norway signed their grant agreement in January 2026, expected to produce 490 kilo tonnes of RFNBO by 2035. Only €270 million were disbursed to projects, with the remaining of the funding going back to the general Innovation Fund pot. Through the Auction-as-a-Service mechanism, Spain and Austria (€400 million respectively) further allocated national funding to domestic projects in the reserve list of the Hydrogen Bank.
In December 2025, a third call of the Hydrogen Bank (IF25 Auction) was launched for €1.3 billion with three baskets: an RFNBO hydrogen basket (€600 million), a RFNBO and low-carbon electrolytic hydrogen basket (€400 million) and a basket with offtakers in the maritime and aviation sector (€300 million). As of May 2026, nine projects have been invited to sign their grant agreement under the auction.
For the IF25 Auction, in the Auction-as-a-Service, Germany has reserved €1.3 billion for projects linked to the Danish German pipeline with offtake in Germany and Spain has reserved further €440 million for projects in Spain.
Supporting International Hydrogen Production
The aim of the international pillar of the hydrogen bank is to support partner countries to accelerate their transition towards climate neutrality and contribute to their broader social and economic development. The Commission is still developing the design of the international leg of the Bank through studies with third parties.
Transparency and coordination
In July 2025, the Commission introduced a Hydrogen mechanism aimed at supporting the development of markets for renewable and low-carbon hydrogen as well as its derivatives (such as ammonia, methanol, and electro-sustainable aviation fuel, or ‘eSAF’). This mechanism has organised its first call for supply interest in December 2025 and a call for demand interest in January 2026, which gathered and linked supply and demand interest for renewable and low-carbon hydrogen. Results show that 87% of the 265 supply opportunities have received interest from at least 1 potential offtaker and 50% of suppliers have received interest from at least 3 potential offtakers. The goal of the mechanism is to make the market more transparent and help European buyers connect with suppliers both within Europe and internationally.
What’s in it for hydrogen?
The Hydrogen Bank is an important support tool for the development of the nascent hydrogen market. Apart from providing direct funding support to hydrogen production projects, the Bank increases the attractiveness of those projects for investors. The Bank also represents an important commitment towards European Union partner countries, as they will be able to benefit from support for the establishment of their own hydrogen value-chains.
Lastly, the Bank is an important steppingstone in the development of the hydrogen market, where the lack of clarity on existing hydrogen flows, transactions and prices has a negative effect on investment.
Links to Legislation and additional information:
European Hydrogen Bank Communication
Factsheet: European Hydrogen Bank
Commission outlines European Hydrogen Bank to boost renewable hydrogen
