IF24 Auction: What the second European Hydrogen Bank auction (really) tells us

As of 17 September 2025, the European Commission has updated the status of the IF24 Auction — the second auction supporting renewable hydrogen (RFNBO) under the Innovation Fund —. There has been a clear shift in the trend: almost half of the projects initially invited to sign the agreement ultimately failed to do so, due, among other reasons, to the lack of secured buyers. As a result, the Commission has begun drawing on the reserve list. For Spain, this represents a change of focus: fewer “mega-projects” and more medium-sized initiatives with a defined buyer. Below, we explain the full picture, using official data, and analyse the lessons learned for future rounds.

What is the IF24 Auction and how does it work?

The European Hydrogen Bank aims to award a fixed premium in €/kg of RFNBO H₂, payable for up to 10 years, only for certified and verified production. Projects compete on price and, once the agreement has been signed, must achieve financial close within 2.5 years and become operational within 5 years. In this second round, the total budget was €1.2 billion, including a specific allocation of €200 million for the maritime sector.

In addition, Member States had the option of adding national funding through the Auctions-as-a-Service (AaaS) scheme. Spain, together with Lithuania and Austria, joined this scheme in November 2024, contributing an additional €377 million. The deadline for submitting the documentation established in the call expired on 12 September 2025.

In the third round of the European Hydrogen Bank, expected at the end of 2025, a specific section for low-carbon hydrogen projects is expected to be introduced alongside the existing mechanism for renewable hydrogen.

The picture after the screening process: 8 remain, 7 drop out and 10 enter from the reserve list

On 20 May 2025, the EC invited 15 projects to prepare an agreement as part of the second round, a process also known as GAP, from Grant Agreement Preparation. The rules required projects to provide a completion guarantee within 2 months. The result? 7 projects withdrew or failed to provide it; 8 are moving forward (5 under the general topic and 3 under the maritime topic), while 10 have been invited from the reserve list in strict order of price. The final list of awards (signed GAPs) will be published before the end of 2025.

Projects that have dropped out

The common denominator among the 7 projects that are not continuing is clear: large scale and a relatively low requested premium (€0.2–0.6/kg): VILLAMARTIN H2 – GALENA RENOVABLES 7, S.L.U. (252 MWe, €0.20/kg), PUERTO SERRANO H2 – GALENA RENOVABLES 7, S.L.U. (98 MWe, €0.25/kg), AGS – ARMONIA GREEN SEVILLA (198 MWe, €0.41/kg), AGG280 – ARMONIA GREEN GALICIA S.L. (198 MWe, €0.42/kg), KASKADE – Meridiam SAS (367.5 MWe, €0.45/kg), H2-Hub Lubmin – H2-Hub Lubmin (210 MWe, €0.47/kg) and Zeevonk electrolyser – Zeevonk Electrolyser (560 MWe, €0.60/kg).

Invitations from the reserve list

Spain stands out in the new round of invitations, with 8 of the 10 projects located in Spanish territory. Projects in GAP under the general category range from €0.33 to €1.22/kg and request between €2 million and €248 million per project. Details are shown below.

Spain: from “XXL size” to viability

The update favours medium-sized projects with industrial integration and clear demand over mega-plants exposed to CAPEX, electricity grid and permitting risks. Spain loses several giants (Villamartín, Puerto Serrano, AGS/AGG280), but retains three projects with tangible industrial uses (H2LZ for chemicals, the medium-scale Tordesillas H2 project and SolWinHy Cádiz, focused on e-methanol) and adds a new group of invited reserve-list projects (Tharsis-ELY-1, NOON, H2BRISA, ATLAS, etc.).

Three strategic lessons for developers and offtakers

The completion guarantee separates maturity from hype

The requirement to provide a guarantee within 2 months of the invitation has screened out financially weak projects. In practical terms: committed equity, banks involved from the bidding stage and documentation prepared for due diligence are no longer optional elements, but essential conditions.

The project “dies” without a robust LCOH and bankable offtake

The €/kg premium is only paid if there is certified production and for a maximum period of 10 years, making the time value of money and the commissioning phase particularly relevant. Very low bids combined with unstable PPAs, EPC contracts without delay penalty clauses or offtake agreements without guarantees can make projects unviable in both the short and long term.

Maritime projects require part of the offtake to be secured

Under the maritime programme, projects were required to have preliminary agreements or HoTs (Heads of Terms) with buyers in the sector covering at least 60% of the volume. The message is unequivocal: priority is given to projects that are ready for fuel production, with organised logistics chains and, in the case of e-fuels, with CO₂ management secured.

Bankability checklist

Beyond offering a competitive price in the auction, what determines whether a project will ultimately be signed and become operational is its bankability. The European Commission, financiers and offtakers will only support initiatives capable of demonstrating technical, contractual and financial robustness from the outset.
This checklist summarises the critical points that every developer should have covered before aiming to sign the GAP and reach financial close or FID (Final Investment Decision).

+ Regulatory design & RFNBO certification

• Verify additionality, temporal and geographical correlation from the preliminary design stage.
• Ensure a traceability plan and a recognised verification body.

+ Energy contracts

• PPAs with stable prices and supply guarantees.

+ Offtake

• Seek Take-or-pay contract structures, collateral and indexation to electricity/CO₂.
• Ensure supply quality/continuity meets customer requirements.

+ EPC and technology

• Turnkey EPC with penalty clauses for delays and performance shortfalls.
• Proven track record, wherever possible, of the manufacturer, local service and stack/Balance of Plant warranties.

Finance and guarantees

• Completion guarantee ready and aligned with the EC/CINEA timetable.
• Capital structure capable of supporting the mismatch between premium payments and the debt profile.

Conclusions

The European Hydrogen Bank is rewarding executable projects over spectacular headlines. The reallocation of funding from withdrawn mega-plants to medium-sized projects with clear offtake demonstrates that, in renewable hydrogen, price is a necessary but insufficient condition: guarantees, contracts and operational viability are what ultimately open the door to support.

For Spain, the timing is favourable for bringing well-integrated medium-sized projects to financial close in industrial applications and synthetic fuels where there is already market traction.

It remains to be seen whether, ahead of the third round, the framework will be clarified sufficiently to strengthen PPA portfolios, ensure bankable offtake and facilitate compliance with RFNBO requirements from the design stage.