Nordic Ren-Gas wins in the first EU hydrogen auction with €45 million bid
Nordic Ren-Gas Lahti plant was among the selected winners of a € 45 million subsidy grant through the European Hydrogen Bank’s first competitive bidding process. The grant will enable Nordic Ren-Gas to expand its production of renewable e-methane in Lahti and accelerate the development of a decentralised e-methane production network.
With this funding, Nordic Ren-Gas plans to produce 122 000 tonnes of renewable hydrogen within its Lahti plant over the next ten years, thereby circumventing nearly 1 million tonnes of CO2 emissions. Nordic Ren-Gas will proceed to finalise the individual grant agreement with the European Climate, Infrastructure, and Environment Executive Agency (CINEA). Production is set to commence within five years post-agreement, with the subsidy supporting the company for up to ten years of certified renewable hydrogen production. A total of €45 million will support the company for up to 10 years in producing certified renewable hydrogen.
Ren-Gas was founded in July 2021 to create a decentralised portfolio of e-methane production plants in Finland. By early 2024, Ren-Gas had six plants in its portfolio. Construction of the first plant in Tampere, Finland, is targeted to start in 2024, and e-methane production is targeted for 2026.
The European Commission awarded nearly €720 million to seven renewable hydrogen projects in Europe. In the hydrogen bank's first auction, 7 projects were selected from 132 proposals for the pre-award phase of the grant agreement. The funds for this auction come from the revenues of the EU Emissions Trading System.
The winning bidders will produce renewable hydrogen in Europe and receive a subsidy to bridge the price difference between their production costs and the market price for hydrogen, which is currently driven by non-renewable producers. Therefore, the European Hydrogen Bank is contributing to the scale-up of cleaner fuels, which will contribute to the decarbonisation of European industry. Their renewable hydrogen will be used in sectors such as steel, chemicals, maritime transport and fertilisers.
The selected projects are located in Finland, Norway, Spain and Portugal. They submitted bids between €0.37 and €0.48 per kilogram of renewable hydrogen produced and also met the other qualification requirements. The subsidy the 7 projects will receive ranges from €8 million to €245 million.
