‘Groundbreaking step’: Australia and Germany commit to contribute €400M to joint H2Global hydrogen auction

Germany and Australia are expanding their energy cooperation through a joint declaration of intent under which each country committed to contribute €200 million to a joint H2Global auction, an initiative aiming to address the cost-of-difference of renewable hydrogen and its derivatives while establishing global supply chains for renewable hydrogen products.

H2Global mechanism facilities import and export of clean fuels such as renewable hydrogen derivatives, including ammonia and methanol, from regions with cost-effective production to high-demand markets.

Building on their previously established energy cooperation, Australian Minister for Climate Change and Energy, Chris Bowen, and German State Secretary for Economic Affairs and Climate Action, Anja Hajduk, signed a joint declaration of intent that includes a combined €400 million contribution to the bilateral H2Global tender.

Described as a groundbreaking step, the declaration enables Australia to participate in the H2Global scheme, marking the first agreement with a country south of the equator.

Specifically, this strategic partnership will enable Australia to establish renewable hydrogen shipping corridors to Europe and beyond, while providing Australian companies access to European markets for hydrogen and ammonia. In turn, Europe will benefit from competitively priced, clean energy products, the parties said.

The joint H2Global tender will help bridge the price gap of renewable hydrogen and its derivatives produced in Australia and sold in Europe. The initial hydrogen purchase auction is scheduled to begin in 2025, with the first annual sales auction targeted for 2027/2028.

Susana Moreira, Executive Director of H2Global Foundation, welcomed the announcement: “H2Global is excited to be part of this landmark agreement between Australia and Germany. This collaboration marks a major step towards global markets for clean fuels, building on the success of the first H2Global pilot auction.”

Timo Bollerhey, CEO of Hintco and Co-Creator of H2Global, commented: “The H2Global mechanism now has EUR 5.83bn of funds in its pipeline to help create and scale clean fuel markets. The double-sided auction mechanism delivers price signals and investment decisions that accelerate the energy transition.”

The results of the first H2Global pilot auction for renewable ammonia, funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), were announced in July this year, revealing Abu Dhabi-based Fertiglobe, a strategic partnership between ADNOC and OCI Global, as the winning bidder.

Fertiglobe will start producing renewable ammonia destined for delivery in European ports in 2027 for a maximum contract value of €397 million. The delivery will start at a potential 19,500 tons in 2027 (subject to actual production start date and supply availability), with volumes potentially scaling up to 397,000 tons cumulatively by 2033, at a delivered contract price of €1,000 per ton.