The bank will gather supply and demand information, provide transparent price information and develop price benchmarks, as well as funding the cost gap between renewable hydrogen and fossil fuels for early projects in the EU via competitive auctions.
“A first auction worth EUR 800m will be funded through the Innovation Fund and will be launched this autumn,” said EC vice president Franz Timmermans on Thursday.
The Innovation Fund is financed by a pool of EU Emissions Trading System allowances and used to fund research into low-carbon technologies.
The auction will award the participating producers needing the least support a fixed premium per kg of hydrogen produced for up to 10 years.
The EC will decide later how to support renewable hydrogen produced outside the EU, said Timmermans.
The 27-member bloc has a goal to produce up to 10m tonnes of renewable hydrogen in the EU by 2030, and import a further 10m tonnes.
Huge investments required
The EC estimates up to EUR 471bn of investments will be needed to produce, transport and use 10m tonnes of renewable hydrogen, plus up to EUR 300bn for the extra renewable power output required.
The bulk of this will have to be covered by private capital, it said.
The EU needs to swiftly finalise its regulatory framework for hydrogen for the bank to be successful, said the EC.
This included the technical rules – delegated acts -- clarifying how hydrogen and hydrogen-based rules can qualify as renewable, the proposed changes to the EU’s renewable energy directive, and the draft legislation on future hydrogen markets, including how to define low-carbon hydrogen.
These are likely to be finalised later this year.