UAE-based fertiliser producer Fertiglobe has been selected as the sole winner of the first H2Global pilot auction for renewable ammonia, Kallanish reports.

A joint venture between Holland-based fertiliser group OCI and Abu Dhabi state-owned oil company ADNOC, Fertiglobe secured €397 million ($432m) of the €900m originally announced. The auction, implemented by Hintco GmbH, is a German mechanism to subsidise hydrogen imports into the European country.

Fertiglobe will start delivering around 19,500 tonnes of renewable ammonia from 2027, going up to 397,000 t by 2033. The contract has been agreed at a net price of €811 per tonne (or €1,000/t including shipping and import costs).

The ammonia will be produced at Fertiglobe’s existing ammonia plant at Ain Sokhna in Egypt, using green hydrogen procured from the 100-megawatt Egypt Green Hydrogen plant. The hydrogen plant will be built as a partnership between Scatec ASA, Fertiglobe, the Sovereign Fund of Egypt, the Egyptian Electricity Transmission Company and Orascom Construction. 

Announced in 2021, the hydrogen project – also located in Ain Sokhna – is expected to produce 13,000 t/y of green hydrogen using 270 MW of solar and wind power. 

Following the H2Global award, Fertiglobe has also entered into a 20-year ammonia offtake agreement with Egypt Green Hydrogen. 

Ahmed El-Hoshy, ceo of Fertiglobe, notes the H2Global award is a “significant milestone” in advancing sustainable ammonia production and furthering the Egypt Green Hydrogen project to a final investment decision (FID). A financial close for the project is expected in the first half of next year.

“This auction result is a strong indication of the market potential of renewable hydrogen and its derivatives,” says Timo Bollerhey, ceo of Hintco and the co-creator of H2Global. “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 mobilise private finance.”

H2Global is an initiative set up by Germany’s economy and climate affairs ministry to boost the markets for clean hydrogen and other zero and low-emission technologies globally. Using a double-auction model, the scheme facilitates the purchase of hydrogen and its derivatives at competitive global prices, before selling it to the EU’s highest bidder.