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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. 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.
On 30 April 2024, the results of the European Hydrogen Bank’s first competitive bidding were released. Seven renewable hydrogen projects across the EU will receive a total of 720 € million, with a plan to produce 1.58 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO2 emissions.
After consulting the hydrogen sector, the European Commission officially launched the second European Hydrogen Bank auction in December 2024, significantly increasing the total budget to approximately €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, selecting 15 production projects across 5 countries, expected to produce 2.2 million tonnes of RFNBO by 2035.
In parallel, with the launch of the Clean Industrial Deal, a third call of the Hydrogen Bank is expected towards the end of 2025, with an additional €1 billion budget. This will complete the €3 billion total funding that President von der Leyen promised to kickstart the Hydrogen Bank initiative.
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. Although Germany initially pledged €350 million for the Hydrogen Bank auction, design flaws prevented a successful auction. Beyond this, Spain, Luthuania and Austrial announced over €700 million in national funds (including Spain’s €400 million state aid pledge).
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.
According to recent announcements, the EU plans to launch a platform for the joint purchase of hydrogen and other critical materials. Succeeding the AggregateEU joint purchasing scheme for natural gas, which will conclude in March 2025 after a final round of matching suppliers and customers. Unlike AggregateEU, where participation was mandatory for Member States, the new scheme will be voluntary. To design the scheme, the Commission has commissioned a study, presented in August 2025.
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 will gather, organize, and share data on supply and demand for renewable and low-carbon hydrogen provided by market participants. By doing this, it will make the market more transparent and help European buyers connect with suppliers both within Europe and internationally. The first round of matching demand and supply is scheduled for October 2025.
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
