The government of the Netherlands plans to host an auction to import green hydrogen or its derivatives at the end of this year or early 2024, backed by €300m ($329m) of subsidies. The tender would be held through Germany’s existing H2Global auction platform, which acts as a middleman between producers and buyers.
Germany will extend its flagship H2Global scheme for buying green hydrogen from outside the EU to European member states — and appears to have promised an extra €1bn ($1.06bn) in funding. A proposal to roll the H2Global initiative into the EU’s domestic hydrogen purchasing programme, the €3bn Hydrogen Bank, was also revealed by EU energy commissioner Kadri Simson and Germany’s minister for economics and climate, Robert Habeck.
H2B Global platform expansion
Details are still emerging on what the EU-wide expansion of the H2Global initiative will look like, whether the German government will continue to bankroll it and who will have ownership of the auction process. However, this could act to bridge the gap between subsidising producers to make green hydrogen at the lowest possible cost while also incentivising current hydrogen users to switch to a more-expensive product.
Under the unique double-auction scheme, a special purpose company owned by the German government Hydrogen Intermediary Network Company (HintCo), will buy green hydrogen or its derivatives from international producers via ten year Hydrogen Purchase Agreements (HPAs), before selling it on to European customers, who will bid for short-term supply contracts via a separate tenders. Any difference in price would be covered with a grant from the German government.
The auction platform has already expanded its reach into the Netherlands—which announced a €300m tender to take place by the end of this year or early next in April—as well as discussing the inclusion of Belgium and Austria prior to this latest announcement. The launch will depend on officials getting the green light from Parliament in the Hague, and state aid approval from the European Commission.
No decision has been made on whether the tender will be for green hydrogen or derivatives such as green ammonia and e-methanol, but the ministry is now putting together a definition of its key criteria. “In the upcoming period we will work on the design of the tender: decision on hydrogen carrier, volumes, import regions and pre-qualification criteria still need to be made,” a spokesperson for the Netherlands’ ministry of economic affairs and climate policy said.
Green Hydrogen Import Hub
The Dutch government first announced that it would make a “financial contribution” to H2Global in October last year. If launched successfully, the tender would make the country the first non-German state to use the H2Global platform for hydrogen imports, and comes as the Netherlands is positioning itself as a major green hydrogen import hub.
The Port of Rotterdam, which is close to an existing network of hydrogen pipelines as well as other H2 infrastructure, hosts an existing ammonia import facility owned by fertiliser producer OCI, which recently took final investment decision on a massive expansion of the terminal.
Rotterdam has also signed agreements with a consortium that includes Shell and Engie to store and transport liquid hydrogen produced in Portugal at the port, and last year made a pact with Dutch gas pipeline operator Gasunie, bulk handler HES and tank storage company Vopak for the companies to build an ammonia import terminal on Rotterdam’s Maasvlakte peninsula.
