First auction for renewable fuels imminent: H2Global

The German government-backed H2Global initiative will launch auctions for imports of renewable ammonia, e-methanol and sustainable aviation fuel in the "next couple of days or weeks at the latest", according to its managing director Timo Bollerhey.

H2Global will launch the first auction once it has received responses from the government on outstanding questions, Bollerhey said at the World Hydrogen Congress in Rotterdam.

Through the scheme, Germany aims to import renewable hydrogen — initially as derivatives — under 10-year contracts and then sell it on to consumers through shorter-term deals, while covering the likely price differentials. The first offtake deals are likely to be agreed in the first quarter of 2023, according to Bollerhey.

While the first auction round will focus on derivatives, hydrogen itself will probably be covered by the next tender procedure, Bollerhey said. He stressed that this is in the hands of the German government which is funding the H2Global initiative, but said first volumes could be available in 2024.

Berlin has provided initial funding of €900mn ($870mn), which H2Global plans to split roughly evenly between the three different products that it will seek in the first auction. But "€900mn is a drop in the ocean and just the start of more to come… we will not be able to make everybody happy with that first round", Bollerhey said.

In its 2023 draft budget, the German government has already earmarked €3.6bn that can be spent by H2Global in future years.

Bollerhey said H2Global's model has garnered strong international interest and has been widely discussed at hydrogen conferences stretching from India to Australia and South America. Last week the Netherlands announced plans to contribute funding to H2Global.

"Hopefully it's going to become a European instrument," Bollerhey said. He noted that the initial round will focus on imports from outside the EU — as this was stipulated by Germany when it allocated the funding — but said the mechanism could eventually be applied to help kickstart production within the bloc, for example from "Spain or Portugal".

Bollerhey stressed that the initiative was not designed to take on the role of a midstream firm and that Hintco, the purpose-built company it has created, will be dissolved after 12-13 years once it has created the market for others. The company will also not provide transport or storage of the fuels, which will be left to those on the supply or demand side of the transactions.

By Aidan Lea