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Danish Hydrogen Projects Win €1.17 Billion German Support
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Three Danish hydrogen projects will share approximately €1.17 billion in German support, after contracts with Germany's Federal Ministry for Economic Affairs and Energy (BMWE) were finalised. They were chosen through the German-Danish Auction-as-a-Service scheme run under the European Hydrogen Bank (EHB). The money backs renewable hydrogen made by electrolysis in Denmark and intended for German industry by pipeline. Payments run for ten years, from 2031 to 2041, and are made only for hydrogen that is actually delivered and certified. The winners are Frigg 1 in Vejen, HØST PtX in Esbjerg and Gemini in Kassø. Each was picked because it asked for the least subsidy per kilogram. The deal also ties into a cross-border pipeline whose construction threshold Denmark has repeatedly cut.
Key takeaways
- Total commitment: Germany's BMWE signed agreements worth approximately €1.17 billion with three Danish hydrogen projects under the European Hydrogen Bank's German-Danish Auction-as-a-Service scheme.
- Winning bids: Frigg 1 in Vejen bid €0.98/kg, HØST PtX in Esbjerg €1.70/kg and Gemini in Kassø €1.77/kg, for awards of about €245 million, €550 million and €378 million.
- Pipeline trigger: A financially guaranteed 100 MW capacity booking by 1 January 2028 now satisfies the booking condition for building the Danish Hydrogen Backbone 1 pipeline.
- Paid on delivery: German payments run from 2031 to 2041 and are tied to the volumes of hydrogen each project actually delivers and has certified.
Table of contents
Why Germany Is Paying for Hydrogen Made in Denmark
The German-Danish Auction-as-a-Service scheme, run through the EHB, pairs Danish supply with German demand. German funding goes to producers in Denmark. Their output is meant for buyers connected to Germany's hydrogen core network.
Denmark's draw is its power mix. A high share of its electricity comes from renewables. That lets producers run electrolysis, which splits water into hydrogen and oxygen using electricity, at costs the scheme treats as competitive.
State Secretary Frank Wetzel framed the deal as a two-way bargain. In his account, German industry gains a secure, long-term and cost-efficient source of supply. Denmark, in return, wins access to a large export market for the hydrogen it produces.
Three Projects Won on Lowest Subsidy per Kilogram
Selection was competitive and turned on a single measure: how much funding each project needed per kilogram of hydrogen. The lowest asks won. The bid price, quoted in euros per kilogram, reflects that funding requirement.
Frigg 1, developed by Everfuel Frigg 1 ApS in Vejen, bid €0.98/kg and secured approximately €245 million. HØST PtX, from CI ETF I Hoest P/S in Esbjerg, bid €1.70/kg and takes the biggest award of the three, around €550 million. Gemini, from Kassø Hydrogen I ApS in Kassø, bid €1.77/kg for approximately €378 million.
The spread is wide. Frigg 1 asked for about €0.79 per kilogram less than Gemini. Yet the higher-priced projects still carry most of the money, which suggests they plan larger volumes. The BMWE has not published plant capacities.
A 100 MW Booking Could Now Trigger the DHB1 Pipeline
The agreements also support the Danish Hydrogen Backbone 1, or DHB1. This cross-border pipeline is the link between Danish producers and German industry. Without it, the plants in Vejen, Esbjerg and Kassø would have no route to buyers on the German core network.
Denmark has cut the minimum requirements for building DHB1 more than once. The current bar is a financially guaranteed capacity booking of 100 MW, made by 1 January 2028. Meeting it satisfies the booking condition for the pipeline to go ahead.
The BMWE argues the lower threshold gives Danish producers and German buyers more planning certainty, since one larger project alone could be enough to start construction. That is a possibility, not a commitment. The ministry's announcement names no project that has made such a booking.
Germany Pays Only for Hydrogen That Arrives
Germany will pay out over ten years, from 2031 to 2041. Money flows only against hydrogen that is actually delivered and certified. A project that is late or underproduces receives less.
That design places delivery risk on the developers rather than on the German budget. The €1.17 billion is an amount tied to output, not a sum handed over up front.
The BMWE expects the scheme to bring more competitive hydrogen prices to buyers on Germany's core network sooner than they would otherwise arrive. It also expects the scheme to help diversify and decarbonise the country's energy imports. Those are ministry expectations. The first payments are not due until 2031, and the plants have to be built before any of it is tested.
| Project | Developer | Location | Bid price | Funding |
|---|---|---|---|---|
| Frigg 1 | Everfuel Frigg 1 ApS | Vejen | €0.98/kg | about €245 million |
| HØST PtX | CI ETF I Hoest P/S | Esbjerg | €1.70/kg | about €550 million |
| Gemini | Kassø Hydrogen I ApS | Kassø | €1.77/kg | about €378 million |
What could make or break the deal
The case for
- Payments depend on certified deliveries, so German money is spent only if hydrogen arrives.
- The DHB1 threshold is now a single 100 MW guaranteed booking, which the BMWE says one larger project could meet.
- Frigg 1's €0.98/kg bid shows at least one producer needs relatively little support per kilogram.
The case against
- No project is named as having made the 100 MW DHB1 booking due by 1 January 2028.
- Denmark has had to lower the pipeline's construction requirements repeatedly, a sign demand commitments have been hard to secure.
- First payments are not due until 2031, leaving years for construction delays before any hydrogen is delivered.
What to be careful about
- If no producer makes the guaranteed 100 MW booking by 1 January 2028, the DHB1 pipeline the projects rely on may not be built.
- Because payments track certified deliveries, a delayed or underperforming plant would leave German buyers with less hydrogen than planned.
- The BMWE's promise of earlier, more competitive prices on the core network rests on all three plants reaching production.
The bottom line
Germany has put approximately €1.17 billion behind the idea that hydrogen made from Denmark's renewable electricity can serve German industry at a competitive price. The structure is cautious. Payments start in 2031, run to 2041 and depend on certified deliveries, so the money follows output. What remains open is the physical link. DHB1 needs a guaranteed 100 MW booking by 1 January 2028, and Denmark has already loosened that condition repeatedly. The bid prices also show a gap: Frigg 1 needs far less support per kilogram than Gemini or HØST PtX. Whether all three reach production will decide if the BMWE's promise of earlier, more competitive supply holds up.
What to watch
- Watch whether any producer makes the financially guaranteed 100 MW capacity booking for DHB1 before the 1 January 2028 deadline.
- Watch for the first German payments in 2031. They will show which of Frigg 1, HØST PtX and Gemini are delivering certified hydrogen.
- Watch for the end of the ten-year support window in 2041, when payments under the agreements are scheduled to stop.
Frequently asked questions
How much support per kilogram will the Danish hydrogen projects get?
The winning bid prices range from €0.98/kg for Frigg 1 to €1.77/kg for Gemini, with HØST PtX at €1.70/kg. The projects were ranked by the lowest funding requirement per kilogram.
When will Danish hydrogen start flowing to Germany?
No delivery date has been given. German payments begin in 2031, and the DHB1 pipeline needs a guaranteed 100 MW booking by 1 January 2028 before its booking condition is met.
What happens if a funded hydrogen plant produces less than planned?
It is paid less. The BMWE ties payments between 2031 and 2041 to hydrogen that is actually delivered and certified, so the approximately €1.17 billion depends on output.
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