EU Innovation Fund hydrogen auction: six grant agreements signed — and what that signals for the market
Six projects have signed grant agreements under the 2024 EU Innovation Fund renewable hydrogen auction—but that’s only a small share of the projects originally expected to move forward. The outcome raises a key question for Europe’s hydrogen push: are we seeing a tougher market reality, weaknesses in the support mechanism, or both?
NEWS
HydrogenLatvia
1/22/20263 min read
Six projects that won support under the 2024 EU Innovation Fund (IF) auction for renewable hydrogen have now signed their grant agreements (GAs). On the surface, that sounds like a clear step forward: contracts signed, money committed, projects moving.
But when you look at the numbers behind it, the headline becomes more complicated — and it raises uncomfortable questions about where Europe’s hydrogen market really stands right now.
The headline vs. the reality
The Innovation Fund auction was designed to accelerate renewable hydrogen production by offering financial support to projects that can deliver at scale. In the initial 2024 auction results, 25 projects were considered eligible to move toward signing grant agreements.
So far, only six have actually reached the finish line.
That gap matters, because it hints at either:
a market that’s struggling to make projects bankable under today’s conditions,
a mechanism that isn’t matching reality on the ground,
or (most likely) a mix of both.
What the 2024 auction originally promised
In the first round of awards:
12 projects were selected under the general topic
3 projects were selected under the maritime topic
Together, these awards represented over €1 billion in potential support and were expected to enable around 2.2 billion kg of renewable hydrogen production.
That’s the scale Europe needs if it wants hydrogen to become more than a pilot-sector story.
Then came the dropouts — and the attempt to patch the gap
During the grant agreement negotiation phase, seven projects dropped out.
To avoid leaving money unused and momentum lost, the European Commission then invited another 10 projects (that didn’t win originally) to enter negotiations and potentially replace the dropouts.
In other words: the system tried to “refill the pipeline” after the first wave couldn’t proceed.
Where things stand now: 6 signed, 23% of the budget used
At this point:
6 projects have signed grant agreements
That corresponds to about €270 million, roughly 23% of the total available €1.2 billion
And it supports around 500 million kg of hydrogen production — also about 23% of what the initial awards implied
So we’re not just seeing a few projects delayed. We’re seeing a major reduction in the auction’s expected impact — at least for now.
What happened to the rest?
From what’s being discussed in the sector, grant agreement negotiations for the remaining projects appear to have stopped, with the remaining budget potentially redirected elsewhere.
If that’s confirmed, it would mean the 2024 auction ends up delivering only a fraction of what it was designed to unlock.
What this means for the next auction round (IF 2025)
Projects that didn’t get to signature — and those that dropped out — may try again in the currently running third auction round (IF 2025), with bids due by 20 February.
But they won’t be the only ones. The queue is growing, and competition will likely be intense — especially if developers are hoping for improved terms, better market conditions, or more workable risk-sharing.
The bigger question: market weakness, policy design flaws — or both?
This situation can be read in two ways:
1) The hydrogen economy is under real pressure.
Costs remain high, offtake is uncertain, financing is cautious, and many projects are struggling to reach final investment decisions.
2) The auction mechanism may not be matching project reality.
If a large share of “eligible winners” can’t reach grant agreement signature, it suggests the structure, assumptions, or surrounding policy framework may be misaligned with what developers and investors can actually execute.
HydrogenLatvia’s view: we need fewer headlines, more bankable pathways
For Latvia — and for the wider Baltic region — the lesson is simple: support mechanisms must translate into signed agreements and built assets, not just announced winners.
Europe’s hydrogen strategy still has strong logic behind it. But the gap between ambition and delivery is showing — and it’s showing in the most practical place possible: projects either sign and build, or they don’t.