This iteration of the auction marks the first time that the EU will fund low-carbon, non-exclusively green hydrogen, following the adoption of rules governing additional production pathways in October.
Bidders will have until 19 February 2026 to apply for per-kilogramme subsidies for projects that meet the EU’s requirements for renewable fuels of non-biological origin (RFNBOs) or for low-carbon electrolytic hydrogen that does not rely exclusively on renewable power.
These non-RFNBO molecules will need to demonstrate 70% lower greenhouse gas emissions than fossil fuels – 28.2gCO2eq/MJ – in line with the recently passed Low-Carbon Fuels Delegated Act.
It is hoped the inclusion of low-carbon hydrogen will open the door to a wider range of projects spread more evenly across the continent.
The auction is split into three segments: RFNBO and/or low-carbon electrolytic hydrogen; exclusively RFNBOs; and RFNBO and/or low-carbon electrolytic for maritime and aviation.
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.
However, this lowest-bid strategy has proven challenging. In the first auction round, two of seven selected projects withdrew; in round two, seven of 15 did the same. As a result, the Commission invited 10 reserve projects – which had submitted higher subsidy requests – to negotiate grants.
At a conference in Brussels in October, a Commission official said bidders would face tougher requirements in the third auction to curb dropouts.
Developers already face an 8% completion guarantee, payable if a funded project is not delivered. In the third round, applicants must also provide more detailed information about infrastructure availability, permitting risks, and “stronger financial commitments.”
The lowest bid strategy has also seen a heavy geographical imbalance in funding. Most projects that were selected for funding in the previous two rounds were located in southern Europe or the Nordics, where renewable energy prices are lowest.
It is hoped that with low-carbon hydrogen now included in funding, other regions will have a chance to secure funds.