The German Federal Ministry of Economic Affairs and Climate Protection has approved €900 million for H2Global, an innovative funding mechanism. H2Global’s fundamental concept is a competitive double-auction model in which hydrogen or hydrogen derivatives are purchased in non-EU nations at the lowest feasible price with 10-year contracts. The contracts are processed by HINT.CO, a third-party middleman. HINT.CO is a private-sector-founded subsidiary of the H2Global Foundation. Products are sold to German and European firms through the intermediary at the highest possible price in short-term auctions, which might help them decarbonize.
As per the tender documents, to participate in the tenders, producers of renewable hydrogen and hydrogen derivatives such as green ammonia, green methanol, and e-Kerosene must adhere to the updated Renewable Energy Directive’s sustainability standards for renewable hydrogen and hydrogen derivatives production (RED II). They will also have to contribute to the deployment or funding of the additional renewable energy needed to power the scheme’s hydrogen-producing electrolysers.
The first H2Global acceptance contracts are expected to be signed in 2022, after the funding instrument is approved by the European Commission under state assistance rules in December 2021. Germany and Europe will receive the first deliveries of sustainable hydrogen-based energy sources in 2024.
REGlobal’s Views: As Germany plans significant renewable energy uptake to phase out coal and decarbonise its energy sector, the country is exploring the role and application of green hydrogen in a big way, especially with the volatility witnessed in gas markets.
