The European Union has allocated €1.09 billion to support nine strategic hydrogen projects across seven countries, accelerating renewable and low-carbon hydrogen production for industry and transport. The funding, awarded through the third auction of the European Hydrogen Bank, is expected to strengthen Europe’s industrial competitiveness and energy autonomy while cutting millions of tonnes of emissions.
EU hydrogen production funding accelerates Europe’s industrial transition
Europe is stepping up investment in hydrogen production with €1.09 billion awarded to nine projects selected under the third auction of the European Hydrogen Bank. The previous auction took place exactly one year ago, with a slightly smaller budget.
The facilities will be developed across seven European countries and are expected to deliver more than 1.3 million tonnes of renewable fuel during their first decade of operation, avoiding around 9 million tonnes of CO2 equivalent emissions.
The European Commission confirmed the funding allocation under the third auction of the European Hydrogen Bank, supported through the Innovation Fund financed by the EU Emissions Trading System (ETS). The initiative aims to expand renewable and low-carbon hydrogen output for energy-intensive industrial sectors, particularly transport and chemicals, while reinforcing Europe’s energy independence and industrial resilience.
Nearly 1.1 GW of electrolysers funded for hydrogen production
The nine selected projects will deploy almost 1.1 GW of electrolysis capacity across seven countries in the European Economic Area. According to the Commission, the plants should generate more than 1.3 million tonnes of hydrogen within their first ten years of operation.
The EU contribution is intended to bridge the gap between the real cost of hydrogen production and the market price of the fuel.
Subsidies will range from €0.57 to €3.49 per kilogram of certified hydrogen produced. Contracts will last for up to ten years and will be awarded through a competitive mechanism based on the lowest support requested by bidders.
Brussels ranked projects according to the level of financial support required per kilogram of fuel produced, continuing allocations until the available budget was exhausted.
Finland and Denmark host the largest projects
Among the selected initiatives, the “Cloudberry” project developed by Finnish company Vetyalfa Oy stands out. The plant will have an electrical capacity of 500 MW and is expected to produce more than 508,000 tonnes of hydrogen over ten years. Classified in the low-carbon segment, the project secured a premium of €0.44/kg, the lowest bid in the entire auction.
Two Danish projects, “NJK” and “ALBA”, also received significant support. The first, coordinated by MorGen, includes 300 MW of electrolyser capacity and an estimated output of 445,000 tonnes of fuel. The second, developed by Hy2gen Nordic AS, aims to produce 144,000 tonnes of hydrogen through a 100 MW facility.
Projects in Greece, Spain and Austria were also selected under the category dedicated to Renewable Fuels of Non-Biological Origin, known as RFNBOs. Greece’s Hellenic Hydrogen will develop the “AN-1-B” project, while Spanish company Turn2X will build the “T2X” plant in Extremadura.
Hydrogen production for transport included for the first time
For the first time, the Commission introduced a dedicated funding line for fuels intended for the maritime and aviation sectors.
Two Norwegian projects, “Gen2-LH2” and “RogalandH2”, were selected in this category. Both facilities will have a capacity between 12 and 12.5 MW and will receive incentives close to €3.5/kg.
The higher subsidy levels reflect the greater costs associated with producing hydrogen-based synthetic fuels for ships and aircraft. However, Brussels considers these sectors strategically important for decarbonising transport segments that remain difficult to electrify.
According to the Commission, the selected projects should prevent around 9 million tonnes of climate-altering emissions. For RFNBO hydrogen, calculations were based on the 2021-2025 ETS benchmark of 6.84 tonnes of CO2 equivalent per tonne of hydrogen.
Germany and Spain add another €1.7 billion
Alongside EU resources, Germany and Spain will use the “Auctions-as-a-Service” mechanism to provide additional national funding.
Berlin will allocate up to €1.3 billion, while Madrid will contribute a further €440 million.
The mechanism will allow additional projects placed on the reserve list of the European auction to receive funding. According to Brussels, the system reduces administrative burdens and improves coordination in the allocation of public incentives across member states.
The third European Hydrogen Bank auction closed on 19 February 2026 with 58 applications from 11 countries. Requested funding exceeded the available €1.3 billion budget by more than six times.
Agreements expected by the end of 2026
The next phase will be managed by the European Climate, Infrastructure and Environment Executive Agency (CINEA), which will prepare funding agreements with the selected developers.
Contracts are expected to be signed by the final quarter of 2026.
Projects will need to achieve financial close within two and a half years of signature and begin operations within five years. The Commission will monitor implementation progress throughout the development phase to ensure compliance with agreed timelines and conditions.
