IOGP Europe’s response to Draft T&Cs for the H2 Bank third auction

We welcome the Commission’s efforts to bridge the financial gap hydrogen developers face. Extending financial support to electrolytic hydrogen is a limited step towards a truly technology-neutral approach across EU financial instruments. Restricting eligibility for other low-carbon hydrogen production pathways constrains the development of a competitive, technology-open European hydrogen market aligned with the objectives of the Clean Industrial Deal. As results from the first auctions show, the EU has regions where renewable hydrogen is too expensive to produce and the proposed expanded scope will be too narrow to deliver a competitive solution for industry.

We are concerned that the Hydrogen Bank’s 3rd auction narrowly focuses on renewable and electrolytic low-carbon hydrogen projects only. The slow pace of project deployment and the persistent gap between announced capacities and FIDs, coupled with dropouts of large-scale projects that won the tenders under H2 Bank, leads to significant amounts of unspent funding, showing that the current framework does not provide sufficient certainty for investors. Without a broader scope that includes all low-carbon hydrogen production pathways that deliver the 70% GHG emission reduction, the EU risks underutilising valuable production potential, slowing down the development of a liquid European hydrogen market, and depriving the EU’s industry of access to the lowest cost low-carbon options to decarbonize while staying competitive.