The European Commission wants to create a European Hydrogen Bank, but producers will need to wait a little longer to find out how much subsidy they will have access to.   

The bank should facilitate and support the production and uptake of renewable hydrogen within the EU as well as imports from international partners to European consumers, the EC said on Thursday. Its main aim is to unlock private investments in the H2 value chain both domestically and abroad, Kallanish reports.

Among many things, the bank “will cover and eventually lower the cost gap between renewable hydrogen and fossil fuels for early projects,” the EC says. Through auctions, renewable hydrogen producers will be awarded a fixed premium per kilogram of hydrogen produced for a maximum of 10 years of operation.

The EC is still working on the auctions and subsidies, to be granted under the Innovation Fund. The first auction, making available €800 million ($848.7m), will be launched this autumn.

Officials are also proposing to extend the Innovation Fund auctions and create an EU auction platform through the bank, offering “auctions-as-a-service” for member states, using both the Innovation Fund and the countries resources to fund potential renewable H2 projects. This shouldn’t affect EU state aid rules.

To meet its 10m tonnes/year import targets by 2030, the EC is also exploring a subsidy scheme for international production. It proposes to offer a green premium via a similar auction system as used for the domestic market, although specific figures and potential funding sources, within the EU budget, are yet to be explored. More information should be available by year-end.

The US’ Inflation Reduction Act offers $3/kg of green hydrogen produced both in tax credit or direct grants to eligible producers. In addition to other available incentives, the US is seen by both electrolyser manufacturers and hydrogen producers as one of the cheapest, if not the cheapest, places to produce green hydrogen in the world.

The EC says it will create better conditions to set up net-zero projects in Europe and attract investments with its Net-Zero Industry Act, also published on Thursday. The proposed regulation, which expects the bloc to manufacture 40% of its electrolysers needs by 2030, should provide further funding and simplify permitting procedures.

The Hydrogen Europe association welcomed the “landmark EU-wide initiative,” which identifies both hydrogen and fuel cells as strategic technologies for Europe’s energy security and resilience.

“Currently bottlenecked hydrogen manufacturing projects will benefit from reduce administrative burdens,” it adds, noting it’s open to continue dialogue with policymakers.

The proposals need to be approved by the European Parliament and Council before entering into force.