UAE player wins H2Global pilot auction for ‘significant’ renewable ammonia supply to Europe

Abu Dhabi-based Fertiglobe, a strategic partnership between ADNOC and OCI Global, has emerged as the winning bidder of the first H2Global pilot auction for renewable ammonia, funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK).

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.

With this result, Europe has secured a significant supply of renewable ammonia and reached a significant milestone in the advancement of the European renewable ammonia market and global decarbonization efforts, said Hintco, an intermediary for purchasing and selling green power-to-X (PtX) products within the H2Global funding mechanism.

In addition, the pilot auction established the first price signal at a contract price of €1,000 per ton (including delivery to Europe) and a net price of €811 per ton for renewable ammonia, thereby taking the first step towards a global renewable ammonia market.

These price signals for renewable ammonia send a positive, clear, and strong message, indicating it can be produced and imported into the EU at attractive prices through targeted support to the most competitive projects, Hintco explained.

Timo Bollerhey, CEO of Hintco and Co-creator of H2Global, commented: “This auction result is a strong indication of the market potential of renewable hydrogen and its derivatives. The energy transition requires value for money, workable solutions – and this first pilot auction has demonstrated that financial and procurement innovations like H2Global’s mechanism not only work but are needed to create thriving markets that motivate and mobilize private finance.”

The pilot auction for Lot 1 covering renewable ammonia was launched at the end of 2022. It received interest from over 65 countries and attracted bids from 22 companies/consortia from five continents. Fertiglobe emerged as the successful bidder among five finalists.

Lots 2 and 3 covered renewable methanol and e-sustainable aviation fuel (eSAF) respectively, with the latter ending without a contract being awarded. As a result, the funds from eSAF will be allocated to the ongoing Lot 2 for renewable methanol.

The German government has committed €4.43 billion to H2Global’s ‘double-auction’ mechanism implemented by Hintco to facilitate the rapid expansion of renewable hydrogen and derivative products.

The ‘double-auction’ model, whereby buyers and sellers actively participate, aims to bridge the difference between the high prices at which hydrogen is currently being traded on the global market, and the lower prices at which it can be sold on and be used in economically viable ways at regional level.

For this contract, Fertiglobe will procure the supply of renewable hydrogen from Egypt Green Hydrogen to be used as feedstock for the production of renewable ammonia at the company’s existing ammonia plant in Ain Sokhna.

Egypt Green Hydrogen, a consortium between Fertiglobe, Scatec ASA, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company, is located in the Suez Canal Economic Zone. During the recently held Egypt-EU Investment Conference, Fertiglobe signed an ammonia sale agreement with its consortium partners in Egypt Green Hydrogen.

The renewable ammonia will be delivered to the port of Rotterdam and sold by Hintco as standardized quantities in annual auctions.

The company stated it was committed to producing ammonia in compliance with EU regulations for renewable hydrogen and meeting the additional environmental and sustainability requirements set out in the tender.

Ahmed El-Hoshy, CEO of Fertiglobe, said: “This award marks a significant milestone for Fertiglobe in advancing sustainable ammonia production and a further critical step towards FID of Egypt Green Hydrogen, expected in H1 2025. Our selection as the winning bidder in H2Global’s pilot auction underscores our leadership in supplying low-carbon products and our commitment to shaping a more sustainable future, and I appreciate the work of our incredible team to make this award possible.

“We are leveraging this vital program which makes our investment in sustainable ammonia economically viable, supporting critical decarbonization technology, while maintaining our disciplined growth strategy.”

In May 2024, Fertiglobe produced the world’s first certified bulk commercial shipment of low-carbon ammonia enabled by carbon capture and storage (CCS), delivered by ADNOC to Japan’s Mitsui & Co. for use in clean power generation.

The UAE player is progressing with other low-carbon ammonia projects, including TA’ZIZ, the 1 million tons per annum (mtpa) low-carbon ammonia facility in Al Ruwais Industrial City, in partnership with TA’ZIZ, Mitsui & Co., and GS Energy Corporation.