H2Global is a funding mechanism designed to develop an international market for green hydrogen. Established in 2021, the H2Global Foundation acts as an intermediary between producers and consumers of green hydrogen and its derivatives. As such, it is a key instrument for implementing Germany’s hydrogen strategy.
How the Double Auction Mechanism Works (© H2Global)
The H2Global Dual-Auction Model
The instrument is based on a dual-auction model: The foundation’s subsidiary, HINT.CO, enters into long-term supply contracts with manufacturers through a competitive bidding process, while also selling hydrogen to customers through contracts with shorter terms.
The price difference between higher purchase prices and lower selling prices is offset by government subsidies. This system is designed to provide investment security for producers while ensuring competitive prices for buyers.
The German federal government had allocated 900 million euros for the first “funding window,” with an additional 3.53 billion euros earmarked in the 2023 budget. The first round of calls for proposals began in December 2022 and focused on green ammonia, green methanol, and sustainable aviation fuel (SAF) from countries outside the EU.
The First Auction Round
As H2Global announced on July 11, 2024, Fertiglobe—a joint venture between the Dutch fertilizer group OCI and the Emirati oil company ADNOC—is the sole winner of the pilot auction for the ammonia lot, as the auction, conducted under the “winner-takes-all” principle, allowed for only one winner per lot. The pilot auction received bids from 22 companies and consortia from five continents. Starting in 2027, the group plans to export green ammonia from the Suez Canal to Germany.
You can learn more about this in the second episode of H2 on air. In it, Prof. Michael Sterner explains how the funding mechanism works and what the results of the first auction round mean.
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