Two Portuguese projects among those chosen for 720 million new EU hydrogen bank

Two Portuguese projects out of seven were selected by the European Commission in the first competition launched by the European Hydrogen Bank, which will mobilize around 720 million euros for the production of renewable hydrogen in the European Union (EU).

The information was released today by the community executive in a statement, with the institution reporting that “today it allocates almost 720 million euros to seven renewable hydrogen projects selected in the first competition launched by the European Hydrogen Bank”, which “will produce renewable hydrogen in Europe”, which is used by sectors such as steel, chemicals, navigation and fertilizers.

Among these seven projects that won an auction that attracted 132 proposals in total, there are two Portuguese initiatives, from Galp (Petrogal) and MadoquaPower2X, with 216 kilotonnes and 511 kilotonnes of ‘green’ hydrogen at stake, respectively, for a period 10 years.

The Galp project (Green2Green II) has a capacity of 200 megawatts of electricity, could prevent the release of 1,477 kilotonnes of carbon dioxide (CO2) in 10 years and has a price of 0.39 euros per kilogram.

The MadoquaPower2X (MP2X) project has a capacity of 500 megawatts of electricity, will be able to avoid the release of 3,494 kilotons of CO2 in 10 years and has a price of 0.48 euros per kilogram.

Brussels notes in the note that the seven winning bidders “plan to simultaneously produce 1.58 million tons of renewable hydrogen over 10 years, avoiding more than 10 million tons of CO2 emissions”.

They are located in four European countries, including Portugal, Spain, Norway and Finland, with prices ranging between 0.37 and 0.48 euros per kilogram of renewable hydrogen produced.

Without revealing the value per project, the European Commission says that the seven projects will receive subsidies ranging between eight million and 245 million euros, having to start producing renewable hydrogen within five years.

Last November, the institution officially launched the European Hydrogen Bank, with a first auction budgeted at 800 million euros.

It is decided that, in this first round, the selected projects will receive the grant awarded in addition to the market revenues they generate from hydrogen sales, for a maximum period of 10 years, but once the contracts are signed it is necessary to start producing renewable hydrogen within five years.

The idea is that, with this bank, the European Commission will ensure the necessary initial financing of three billion euros to cover the risk of buying and selling ‘green’ hydrogen.

The second round of European Hydrogen Bank auctions is scheduled for spring 2024.

The EU has set a target of producing 10 million tonnes of hydrogen nationally by 2030, as part of the REPowerEU energy plan.

Financing the European Hydrogen Bank are revenues from the EU emissions trading scheme between 2020 and 2030, in a budget estimated at €40 billion, and the EU Innovation Fund.

This initiative aims to support the EU’s domestic hydrogen production and reduce imports of renewable hydrogen from international partners.

‘Green’ hydrogen comes from renewable sources, so it does not emit CO2 and releases small amounts of atmospheric pollutants, and can be used as a raw material, fuel and transport or energy storage vector and applied in the industrial, transport, energy and buildings.