The European Commission is preparing to launch the third hydrogen auction under the Innovation Fund – the IF25 Hydrogen Auction. The call opened on 4 December 2025, with a total budget of up to EUR 1.3 billion.
The objective of the initiative is to accelerate the development of the European market for renewable fuels of non-biological origin (RFNBOs) and low-emission electrolytic hydrogen, as well as to reduce the cost gap compared to fossil fuels.
We invite you to participate in the call and encourage you to cooperate with KPMG in order to become familiar with the full terms and conditions of the call and to support the application submission process.
In the context of accelerating industrial transformation in Europe, the European Union is launching another hydrogen auction aimed at supporting the decarbonisation of energy-intensive sectors and the development of a low-carbon economy.
Innovation Fund- IF25 Hydrogen Auction
The European Commission is preparing the third pan-European hydrogen auction – the IF25 Hydrogen Auction. The call was launched on 4 December 2025, with a total budget of up to EUR 1.3 billion.
Scope and objective
The objective of the programme is to support the development of renewable hydrogen production (RFNBOs) and low-emission electrolytic hydrogen, thereby facilitating the phase-out of fossil fuels in industrial and transport sectors.
The auction covers three thematic areas:
- Topic 1 – RFNBO hydrogen production (EUR 600 million)
- Topic 2 – RFNBO hydrogen production and low-emission electrolytic hydrogen production (EUR 400 million)
- Topic 3 – RFNBO hydrogen production and low-emission electrolytic hydrogen production for the maritime and aviation sectors (EUR 300 million)
Support structure
Support will be provided in the form of a fixed premium per kilogram of hydrogen produced, paid for a period of up to 10 years following the verification and certification of production. Projects will be ranked based on the bid price offered, with the maximum support level capped at EUR 4 per kg of H₂. The maximum grant amount per project may not exceed the budget allocated to the respective auction topic.
Disbursement of funds will take place only after the installation has entered into operation (Entry into Operation) and will be made in semi-annual payment cycles.
Key project requirements:
- Minimum electrolyser capacity: 5 MW, installed at a single location.
- Emissions reduction: for low-emission electrolytic hydrogen, the project must demonstrate at least a 70% reduction in greenhouse gas emissions compared to fossil fuels.
- Commissioning timeline: the Entry into Operation phase must occur within 5 years from the signature of the grant agreement.
- Technology origin requirements:
a) At least 75% of the electrolysers included in the project must originate from countries other than China;
b) For this 75%, the electrolyser stacks must also originate from countries other than China;
c) Up to two main, specific electrolyser components (excluding stacks) may originate from China, provided that at least 75% of the electrolyser stack capacity originates from countries other than China.
- Cybersecurity: operational control of the installation, as well as data storage and processing, must take place within the EEA.
- “Do No Significant Harm” (DNSH) principle: a DNSH Compliance Plan must be submitted at the application stage, and a DNSH Compliance Report must be provided after completion of the implementation phase.
Strategic importance of the programme:
The IF25 Hydrogen Auction forms part of the European Hydrogen Bank strategy and the Clean Industrial Deal, aiming to accelerate the deployment of low-emission technologies and to increase cost transparency in hydrogen production.
Thanks to the Auction-as-a-Service model, EEA Member States will be able to co-finance projects using national funds while relying on a common, streamlined procedure.
Indicative timeline:
- Call opening: 4 December 2025
- Call closure: 19 February 2026
- Announcement of results (projects invited to sign grant agreements): May–June 2026
- Signature of grant agreements: by November 2026
How can we help?
KPMG advisors from the Innovation, Incentives and Grants team have extensive experience in supporting clients in the successful acquisition of financial support for projects, including grants, incentives and public subsidies. We would be pleased to provide you with further information on the conditions for obtaining funding, as well as to:
- assess your activities, in particular with regard to opportunities to obtain public funding, including the identification of appropriate funding sources;
- advise on how to structure your activities from an organisational and legal perspective in order to optimise access to grants;
- prepare the application for project funding;
- monitor the application throughout the evaluation procedure;
- provide support with the proper settlement and documentation of incurred costs in order to obtain their reimbursement, as well as with the implementation of appropriate accounting and tax recording principles.