29 April 2024 (Lloyd's List) - THE European Commission will dedicate a budget for clean hydrogen production projects with maritime offtakers in its second Hydrogen Bank auction later this year, according to draft terms and conditions.
The EU Hydrogen Bank, which will use revenues from the bloc’s Emissions Trading System, will have a specific budget for projects whose offtakers will be involved in bunkering in an EU port. The commission has yet to decide on the total budget and the maritime-specific amount for its second auction. Such offtake sector-specific funding was not available for the first tender that closed earlier this year.
The EU will announce results of its first Hydrogen Bank auction this week, after it received 132 bids from 17 EU countries to use a budget of €800m ($856m) for clean hydrogen production.
The EU set a price ceiling of €4.50 per kilogram of clean hydrogen for its first auction, setting the maximum fixed price it will pay for renewable hydrogen production during 10 years.
The bloc mulls reducing this to €3.50 for the second round.
The EU had committed to allocate part of its ETS revenues for shipping, which was brought into the scheme this year. Some 20m EU allowances, equalling to €1.27bn at today’s prices (€63.50), will be allocated to shipping.
The EU set up the Hydrogen Bank under its Net-Zero Industry Act, which was adopted by the European Parliament last week.
The act, widely seen as the EU’s response to the US Inflation Reduction Act, sets a 40% target for local technology manufacturing to help decarbonisation goals.
The list of net zero technologies under the act includes products that can be used as bunker fuels, such as advanced biofuels and renewable hydrogen-derived e-fuels.
The European Community Shipowners Association welcomed the parliament’s inclusion of clean fuels for shipping in its act.
Ecsa said the act introduces a benchmark for the commission and the EU member states to match 40% of the deployment needs for clean fuels for shipping with production capacity.
