The results of the first round of tenders for importing green hydrogen products under the H2Global program have been announced: Germany will import at least 259,000 tonnes of green ammonia between 2027 and 2033. This amount is more than 10% of Germany's annual ammonia production. The production price is 811 euros per ton of ammonia, translating to less than 4.50 euros per kg of green hydrogen.

These costs are lower compared to current estimates and initial auction results for green hydrogen derivatives. Unlike other auctions, H2Global prices are based on binding purchase agreements, providing price transparency and security, which is crucial for investment decisions in green hydrogen production and usage.

Federal Minister for Economic Affairs and Climate Action, Robert Habeck, stated: "The first purchase agreements for green hydrogen products are a significant step for Germany’s industrial transformation, climate protection, and sustainable jobs. The import of green hydrogen products will drive the hydrogen market ramp-up in Germany. The industry needs large quantities of green hydrogen and its derivatives for decarbonization, requiring both domestic and international imports as well as national production. The availability of affordable green energy, now in the form of hydrogen, will remain a key factor for industrial competitiveness. With the successful auction via our H2Global instrument, the initial steps have been taken, and more will follow soon."

The H2Global program makes a crucial contribution to global climate protection. The contract for the first tender window for ammonia was awarded to Fertiglobe, based in the United Arab Emirates, with production in Egypt. Egypt will install 273 megawatts of renewable energy facilities, leading to an annual reduction of 93,000 tonnes of CO? emissions.

Background

In December 2021, the BMWK approved up to 900 million euros for the first tender in the H2Global funding instrument. The program aims to purchase green hydrogen products cheaply on the world market and sell them at the highest price in Germany or the EU. The cost difference between the expected higher purchase price and the lower selling price is covered by subsidies (Contracts for Difference Approach, CfD).

Exporters of hydrogen are given investment security through long-term purchase agreements, and buyers gain access to green derivatives. H2Global Foundation’s hydrogen trader, HINTCO, acquires hydrogen derivatives at the lowest possible price for a 10-year period through a competitive process. The large-scale purchase contracts stimulate investment in renewable energy and the production of hydrogen-based ammonia and methanol. The production must occur outside the EU and EFTA states in the first round, complementing domestic production and hydrogen imports from European countries.

The BMWK is planning another import round worth 3.5 billion euros, building on the experiences from the current results. Part of the second funding window includes a joint import of green hydrogen products with the Netherlands, amounting to 600 million euros.