Germany to invest € 900 million in a green hydrogen project, H2Global, the Federal Ministry for Economic Affairs and Climate Protection said on Thursday.
The project aims to advance the international market ramp-up of green hydrogen and use so-called double auction processes for this purpose. This means that hydrogen or hydrogen derivatives are bought cheaply on the world market and sold to the highest bidder in the EU.
The core idea of H2Global is a “double auction model”, where hydrogen or hydrogen derivatives are purchased in non-EU countries at the lowest possible price with 10-year contracts using a competitive process. The contracts are processed through the intermediary HINT.CO, which is a subsidiary of the H2Global Foundation established by the private sector.
Products are sold using short-term auctions at the highest possible price to German and European companies, who can use them to advance their decarbonisation.
Since the product price of green hydrogen is still relatively high in the current market ramp-up phase, HINT.CO will probably pay more in purchasing than it can earn through sales. The resulting losses will be offset by the federal grant for a maximum of 10 years. Over time, the losses will decrease, as the willingness to pay for sustainable energy sources will increase in the foreseeable future.
The first deliveries of sustainable hydrogen-based energy source to Germany and Europe are planned for 2024.
Robert Habeck, Federal Minister for Economic Affairs and Climate Protection, said, “In the future, we will have a high demand for green hydrogen and, in addition to production in Germany, we will also need imports.”
“That is why we are already starting the international ramp-up of the hydrogen economy and are building long-term value and supply chains using the H2Global instrument,” he added.
The H2Global funding program was designed within the framework of the federal government’s national hydrogen strategy and is based on the H2Global concept, which was developed by the German Society for International Cooperation (GIZ) GmbH in cooperation with the private sector, associations and the German Hydrogen and Fuel Cell Association (DWV).