Good news for the sustainable energy market, specifically for hydrogen-based solutions, thanks to a new European incentive for a cleaner energy mix. The European Hydrogen Bank announced a £992 million investment in 15 renewable hydrogen projects across five countries within the European Economic Area. This initiative aims to produce 2.2 million tons of green hydrogen in ten years, avoiding more than 15 million tons of CO2 emissions and reducing the continent’s dependence on fossil fuels.
Hydrogen economy: how lighter gas can drive greener Europe
Renewable hydrogen, which is produced with electricity generated from clean sources, is now seen as one of the main alternatives for decarbonizing difficult-to-electrify sectors such as shipping, steel, and the chemical industry. The main drawback to this energy source is its cost. Producing green hydrogen is still expensive, and that’s where the European Hydrogen Bank comes in.
Created by the European Commission, the bank’s main objective is to reduce the gap between production costs and market prices, making fuel more competitive. Selected companies will receive fixed subsidies ranging from £0,20 to £0.60 per kilogram produced, and in one specific case, up to £1.88. This financial support, from the European Union Innovation Fund, provides an incentive to ensure greater stability for projects to advance and reach industrial scale.
Among the 15 projects selected for the grant, Sapin leads with eight initiatives, followed by Germany, Norway, the Netherlands, and Finland. Together, these companies are part of the European long-term plan to produce 10 million tons of renewable hydrogen by 2030, a target established by the REPowerEU program.
From ports to laboratories: where hydrogen will be used
The impact of the investment is not limited to direct energy generation. Green hydrogen can also be used as a central element in other production chains, such as the production of ammonia and methanol, and for marine propulsion.
This is the first time in history that the European bank has earmarked a specific portion of its resources for the shipping sector, totaling £96.7 million. The idea is to encourage the use of the fuel on vessels and in ports, reducing emissions from maritime transport, which is one of the most polluting in the world.
Hydrogen investment also fuels jobs, local economies, and European energy independence
In addition to environmental benefits, the program also supports social issues, such as creating local economic opportunities. Each project receiving the financial incentive is expected to generate hundreds of direct and indirect jobs, increasing the pace of transition to more sustainable models in infertile regions. It’s worth mentioning that renewable hydrogen also strengthens Europe’s energy independence, reducing vulnerability to fluctuations in the imported natural gas market.
This decision has political support and backing in terms of strategy, since it is expected that the more countries that produce green hydrogen within the bloc, the greater Europe’s capacity to face external crises, such as the energy crisis triggered by the war in Ukraine, without suffering much internal impact.
Next steps and the role of innovation in Europe’s energy future
The selected projects will have up to two and a half years to reach financial close and begin production within five years. Once operational, they may receive subsidies for up to ten years, provided they demonstrate the renewable origin of the fuel. By the end of 2025, a third round of European Hydrogen Bank auctions is expected to open, with an estimated budget of £1 billion.
Europe’s energy transition still faces challenges common to regions around the world, such as high costs, lack of infrastructure, and specific regulations. The investment of nearly £1 billion aims to alleviate these challenges and achieve concrete progress in the sector. It demonstrates that hydrogen is being placed in the spotlight to meet pre-established sustainable production targets.