The European Commission today authorized the government to allocate a maximum of €400 million in direct aid to renewable hydrogen production projects on Spanish soil that have been previously selected in the   European Hydrogen Bank’s second Hydrogen as a Service (AaaS) auction .

This mechanism will be used to subsidize, with the Recovery Plan’s own funds (PRTR), those projects with a Spanish stamp that, having been supported by Brussels, are excluded from the EU budget set for the auction launched by the Commission in December 2024.

The Brussels approval represents a further step in Spain’s strategy to promote green hydrogen as an accelerator of the energy transition, especially in the industrial and transportation sectors, and to develop the entire associated value chain.

In November, Spain joined this scheme of the European Innovation Fund and the European Hydrogen Bank to have an additional instrument with which to finance renewable hydrogen produced here – instead of the initial investment costs, which are subject to support in other incentive programs for the deployment of this vector such as H2 Pioneers, H2 Valleys and H2 Value Chain, among others -, within the budget already provided for in Component 31 of the PRTR.

In March, the Ministry for Ecological Transition and the Demographic Challenge (MITECO) submitted for public consultation the Royal Decree regulating the conditions for the direct granting of aid to Spanish projects participating in this second European auction. The Institute for Energy Diversification and Savings (IDAE), attached to the State Secretariat for Energy, is the reference body for Spanish participation.

Offers from eleven countries

As detailed by the Commission itself at the close of the application period, this new bidding process for fixed premiums for renewable hydrogen production on a European scale has attracted 61 project offers—eight of them linked to the maritime sector—in 11 countries, including Spain.

The total requested grant amounts to more than €4.8 billion, four times the €1.2 billion budget allocated by the Innovation Fund. All proposals are being evaluated by the European Climate, Infrastructure and Environment Executive Agency (CINEA) and will be ranked according to the bid price in the coming months.

Once the EU-wide auction is completed, countries that provide additional funding can support projects located in their territory and favorably evaluated by the Commission that have been left without funding from the  Innovation Fund  due to the exhaustion of the available budget, and allocate them money from their voluntary contribution to the common fund.

In Spain’s case, this bailout contribution is capped at the 400 million euros currently authorized by Brussels.

High Spanish competitiveness

In the first auction, launched in November 2023, three of the seven projects selected by the European Commission were Spanish, confirming the high competitiveness of Spanish proposals in the still nascent green hydrogen market, key to the decarbonization of heavy industry and transport, among other sectors.

The Commission highlights that the innovative Auction as a Service mechanism facilitates project selection, offers greater cost efficiency and administrative agility in the allocation of aid, and coordinates national and European support mechanisms to enhance these advantages in a competitive environment within the EU.

This scheme also contributes to the  Clean Industrial Deal ‘s objective  of accelerating the decarbonization of European industry, while strengthening its competitiveness and strategic independence. Given the positive response to the two auctions launched to date, the Commission plans to launch a third auction later this year.

Joining the European Hydrogen Bank auction system adds to the full range of aid instruments enabled by the Government through the MITECO (Ministry of Energy and Mines) to make green hydrogen one of the key levers of our energy policy. More than €3 billion from the PRTR and the Addendum have already been allocated to the development of this energy vehicle and its associated value chain.