Germany has awarded the first green ammonia contract under its H2Global hydrogen derivative import scheme, with Fertiglobe winning at Eur1,000/mt ($1,088/mt) for delivery to Northwest Europe.
The supply will start with a potential 19,500 mt in 2027, subject to production start date and supply availability from Fertiglobe's plant in Egypt, rising to a total of 397,000 mt cumulatively by 2033, for a maximum contract value of Eur397 million, H2Global said July 11.
Platts, part of S&P Global Commodity Insights, last assessed green ammonia delivered to Northwest Europe from the Middle East at $1,004/mt on July 8. Platts assessed conventional ammonia CFR Northwest Europe at $490/mt.
"This auction result is a strong indication of the market potential of renewable hydrogen and its derivatives," Timo Bollerhey, CEO of awarding company Hintco, said in a statement. "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 net price for the H2Global ammonia is Eur811/mt, the organization said.
Check out our interactive ammonia price chart(opens in a new tab)
A final investment decision for Scatec's Egypt Green Hydrogen project, which will supply hydrogen for the ammonia production at Fertiglobe's existing Ain Sokhna plant, is expected in the first half of 2025.
Scatec said in a separate statement it had now signed a 20-year offtake agreement with Fertiglobe, based on the H2Global award.
A second tender for e-sustainable aviation fuel concluded without an award, with the funds to be reallocated to an ongoing green methanol import tender.
"This offers bidders the opportunity to realize additional economies of scale," H2Global said.
Germany had allocated a total of Eur900 million to the three initial tenders.
Egypt Green Hydrogen
Scatec is developing a 100-MW electrolyzer to produce green hydrogen for ammonia feedstock at Fertiglobe's Ain Sokhna plant.
The facility will be powered by 273 MW of new solar and wind, producing around 13,000 mt/year of hydrogen for up to 74,000 mt/year of ammonia.
Egypt Green Hydrogen, in the Suez Canal Economic Zone, is a consortium between Scatec, Fertiglobe, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company.
The H2Global ammonia supply contract specifies minimum deliveries of 40,000 mt/year from 2028-33, with additional optional volumes.
Hintco has the option to take 17,500-33,000 mt/year of additional volumes, it said.
The plant is due to start operations in 2027, ramping up to full production in 2028.
Auction structure
The pilot auction attracted bids from 22 companies from five continents, H2Global said. Fertiglobe won from the five companies shortlisted.
H2Global set an auction ceiling of Eur1,282/mt, or Eur1.28/kg.
A result was previously expected at the end of the first quarter.
Tenders will cover long-term purchase agreements over 10 years, backed by German government funding.
The "double auction model" bridges the difference between the cost of green hydrogen production and the price consumers are willing to pay.
A second phase of sale auctions for offtakers will take place after the purchase auction.
Under the government-funded H2Global scheme, hydrogen intermediary company Hintco is set to purchase green hydrogen derivative imports for ammonia, methanol and sustainable aviation fuel at the most competitive price and sell them to end-users via a separate competitive tender.
