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16 Feb 2024

Germany has allocated 3.5 bn euros to H2Global auction subsidies in order to boost green hydrogen exporters

Amy Power
Germany has allocated 3.5 bn euros to H2Global auction subsidies in order to boost green hydrogen exporters

The amount of funding for the H2 import subsidy programme is now getting close to reaching the 5bn euro capitalisation point which Berlin promised. This accomplishment is due to the funding the German government is about to transfer to H2Global, which is over 3.5bn euros.

H2Global is the country’s pioneering green hydrogen purchasing program and in order to continue their business and find further subsidy auctions for renewable H2 and its derivates, H2Global has passed on this auction to The Hydrogen Intermediary Network Company (Hint.Co).

HintCo works alongside H2Global’s ‘double-sided’ auction as both a buyer and a seller. The company uses the funds it receives to auction subsidies for green hydrogen which is being imported into the EU. So far, this company has now received a grant notification from the Federal Ministry for Economic Affairs and Climate Action (BMWK), which will be worth 3.53 bn euros.

Being H2Global’s buyer and seller, means that Hint.Co is a company that was specifically formed to buy green hydrogen, or green hydrogen’s derivatives on ten-year contracts and then sells these volumes onto end-users through one-year offtake agreements. The difference that occurs in the price at these points is made up from Hint.Co’s funding ability. The aim behind this system is to give green hydrogen producers a long-term revenue, which they know they can rely on, so that they are able to get their projects up and running. This system also prevents these companies having to deal with the ‘green premium’ that can accompany renewable H2.

This grant that the German government has made now brings their total investment to 4.45bn euros, which includes the investment of 900 euros that was made to the scheme’s pilot auction. This therefore brings the investment closer to the over 5bn euros which was promised by Berlin in 2023.

Alongside these investment, other investments have been made by other countries, such as the Netherlands, who have agreed to help fund a 600m euro auction with the German government. Another party that is getting involved is the Australian government, who has shown interest in joining Germany in a 400m euro auction. Although the offer from the Australian government is not yet confirmed, it is in the same position as a potential investment from the United Arab Emirates.

The H2Global Foundation, commented, “The grant is tied to the next iteration of double-sided tenders modelled after the H2Global mechanism.” The spokesperson also said that this next step will also be funded with donations from private-sector energy giants such as Uniper, BP, Shell, RWE and Total.

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