On 11 July, the Bundesministerium für Wirtschaft und Klimaschutz (BMWK) announced the results of the first round of tenders for the import of green hydrogen products as part of the H2Global programme, which aims to contribute to global climate protection.
According to the BMWK, at least 259 thousand tonnes of green ammonia are to be exported to Germany between 2027 and 2033 - i.e. a total of over 10 % of annual national ammonia production. Based on a production price of EUR 811 per tonne of ammonia, the ministry expects a price of less than EUR 4.50 per kg of green hydrogen.
This means that the costs for green H2 derivatives are lower compared to current estimates and other auction results. In contrast to other auctions, the prices at H2Global are based on binding purchase agreements, the BMWK adds.
Price certainty promotes investment in the H2 sector
According to the BMWK, „transparent communication of binding prices for green hydrogen“ plays an important role in the H2 ramp-up, as this creates price certainty and thus investment incentives - both for the establishment of green hydrogen production and for the use of green hydrogen or its derivatives on the customer side.
Federal Minister for Economic Affairs and Climate Protection Robert Habeck is confident: „The first purchase agreements for green hydrogen products are an important step for the transformation of Germany as an industrial location, climate protection and sustainable jobs in our country. The import of green hydrogen products will decisively advance the hydrogen market ramp-up in Germany. German industry needs large quantities of green hydrogen and its derivatives for decarbonisation, which requires both imports from outside and within Europe as well as national production. The availability of low-cost green energy, now also in the form of hydrogen, will continue to be an important location factor for industry in the future. The successful auction via our H2Global instrument marks the beginning, and further steps will follow soon.“
H2Global: Tenders with different funding priorities
Fertiglobe, a company based in the United Arab Emirates, has been awarded the contract for the first tender in the ammonia subsidy segment. The green ammonia intended for global H2 imports is to be produced in Egypt, where 273 MW renewable energy plants are to be built. This is expected to save 93,000 tonnes of CO₂ emissions per year.
The BMWK had already approved up to 900 million euros for an initial H2Global tender in December 2021: „The way the programme works is to buy green hydrogen products cheaply on the global market and sell them to the highest bidder in DEU, or the EU. The difference in costs between the (expected higher) purchase price and the (lower) sales price is offset by the funding (Contracts for Difference Approach, CfD)“, the ministry explains.
„The BMWK is working on a further import round totalling EUR 3.5 billion. This builds on the experience gained from the results published here. Part of the second funding window is a joint import of green hydrogen products financed together with the Netherlands totalling EUR 600 million.“
