With a budget of EUR 360 million (USD 378.68 million), the German government has begun the first auction aimed at reducing imports of green ammonia from non-EU nations.
This awarding procedure is a component of the H2Global programme, which aims to encourage the industrial output of green hydrogen and its byproducts in non-EU and EFTA nations. A budget of EUR 900 million was agreed by the Federal Ministry for Economic Affairs and Climate Action in December to support investments in the manufacture of green hydrogen, which will thereafter be imported into the EU.
The government will enter into long-term purchase agreements with the state-owned Hintco Corporation as part of H2Global to offtake green ammonia, green methanol, and sustainable aviation fuel (SAF) at the most affordable costs through an auction. Producers will be guaranteed investment and planning security in this manner. To meet demand across Europe, Hintco will also reach short-term sales agreements with clients at the best price.
The financing granted by BMWK will make up for the loss brought on by the discrepancy between the sale price and the anticipated higher acquisition price.
By February 7, 2023, bids for the current lot of the auction must be submitted. First deliveries to Germany and Europe are scheduled for the end of 2024 under a ten-year contract that the winners will sign with Hintco for the delivery of green ammonia.
The auction’s next two lots, which are focused on imports of green methanol and SAF, will soon go live.
Germany will allocate an additional EUR 3.5 billion as part of the 2023 budget for future auctions with terms lasting up to 2036 in an effort to create H2Global as a European tool for the expansion of the green hydrogen market.