Under the draft terms and conditions for the Innovation Fund auction, eligibility has been expanded to include RFNBO and electrolytic hydrogen that does not exclusively use renewable power.
These molecules will need to have 70% lower greenhouse gas emissions than fossil fuels, under the EU’s recently adopted criteria for low-carbon hydrogen.
It comes as the first time that the bloc will subsidise non-RFNBO clean hydrogen, following pressure from industry to provide relaxed rules to ease project development and lower costs.
Under the RFNBO rules, designed to ensure only green electricity is used in production, electrolyser operators must source power from new renewable energy assets located in the same grid region and match operation on an hourly basis from 2028.
The new auction is planned to be split into three segments, with €400m ($458m) available for RFNBO and/or electrolytic low-carbon hydrogen projects; €400m exclusively for RFNBO; and €200m ($229m) for RFNBO and/or electrolytic low-carbon hydrogen for the maritime sector.
Support will be provided in the form of a fixed premium payment per kilogramme of hydrogen produced over 10 years. The auction has a ceiling price set at €4/kg ($4.58). Bids will be ranked on price.
Projects will need to be a minimum of 5MW in electrolyser capacity.
It follows two previous auctions, which were oversubscribed. The section round received 61 bids with 15 projects selected for a total of €992m ($1.13bn).
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