Positive warning :EU launches third European Hydrogen Bank auction, with budget of €1.3bn

The European Union has officially launched the third auction round of the European Hydrogen Bank, allocating €1.3 billion to accelerate the production of renewable and low-carbon hydrogen within the bloc. This round marks an expansion of scope: for the first time, funding covers not only RFNBO hydrogen (the EU’s term for fully renewable, non-biological hydrogen and derivatives) but also low-carbon electrolytic hydrogen that does not fully meet RFNBO criteria. Funding is divided into three targeted baskets to address different sectors and hydrogen production profiles: 1. RFNBO-only basket – now increased to €600 million, up from the initially planned €400m due to higher demand and strategic importance. 2. General basket for both RFNBO and low-carbon electrolytic hydrogen – €400 million. 3. Maritime & aviation basket – €300 million to support hydrogen fuels used in hard-to-decarbonize transport sectors. In addition to the EU’s central €1.3bn pot, substantial national top-ups will expand the overall funding pool: Spain will contribute €415m, Germany will add €1.3bn, both through the EU’s “auctions-as-a-service” mechanism. These funds will support projects within their borders that meet the criteria but would otherwise miss EU-level funding. Winning projects will receive a fixed premium per kilogram of hydrogen produced for 10 years, designed to stabilize revenues and help investors reach final investment decision (FID). The maximum support level remains €4/kg, but previous clearing prices have been much lower, typically under €1/kg, with the highest awarded so far at €1.88/kg. This suggests the EU expects increasingly competitive production costs. Applications for this auction close on 19 February 2026, with competition expected to be strong due to increased demand from industrial, energy, transportation, and chemical sectors.