Funding is provided to the winners of the German“Auctions-as-a-Service” mechanism, which is embedded in the EHB’s IF25 auction. This mechanism allows member states to finance additional projects that have met the evaluation criteria but can no longer be funded from the Innovation Fund’s budget. In December 2025, the Federal Ministry for Economic Affairs and Energy (BMWE) contributed an additional 1.3 billion euros (as reported by H2News).
The goal of Germany’s“Auctions-as-a-Service” mechanism is to supply customers connected to the German core grid with renewable hydrogen as cost-effectively as possible. At the same time, the mechanism aims to create incentives for the development of a cross-border hydrogen pipeline infrastructure. Under the German IF25 auction mechanism, the hydrogen from the Danish projects must therefore be fed into the “Danish Hydrogen Backbone 1” pipeline and delivered to customers connected to the German core grid.
A total of 590 MW of new capacity was funded
Projects on the reserve list of the Innovation Fund auction can be transferred to the respective national authorities, provided they fall within the national budget and are ranked accordingly in the overall list (as reported by H2News). This applied, among others, to three Danish projects. As a result, the “Frigg1”project in Vejen, which is being implemented by the energy provider Everfuel A/S, will receive funding. It is planned to have a capacity of 200 MW. The bid price was 0.98 euros per kilogram.
Another project is “Heimdal,” developed by the energy company European Energy A/S. The project aims to build new capacity of approximately 150 MW in Kassø, Denmark. The bid price for this project was 1.07 euros per kilogram.
In addition, the “HØSTPtX”project in Esbjerg is receiving funding. The fund management company Copenhagen Infrastructure Partners envisages a capacity of 240 MW. The bid price here was 1.70 euros per kilogram.
Grant agreements to be finalized by October 2026
The three tenders cover a total of 78,000 metric tons of renewable hydrogen per year, with delivery beginning in 2031. The 10-year grant agreements are scheduled to be finalized by the end of October 2026.
According to the BMWE, these projects can thus help meet the minimum capacity booking requirement for the planned cross-border hydrogen infrastructure between Denmark and Germany. The hydrogen is then to be fed into the German core hydrogen network, which is currently under construction. According to the ministry, it is now up to producers and consumers to enter into long-term purchase agreements.
