Canada joins German hydrogen import auction scheme H2Global, but funding details not yet disclosed
Prospective exporter is running out of time to meet promise to supply Germany with green hydrogen as early as next year
Stay ahead on hydrogen with our free newsletter
Wilkinson has hinted that details, including how much government funding will be put towards the next scheme and the exact mechanics, will be outlined within 90 days, according to reporting by Bloomberg.
The Canadian federal government has in recent months agreed loans of more than $120m to two different green hydrogen projects, Nujio’qonik in Newfoundland and Point Tupper in Nova Scotia, both of which are due to start production next year.
However, neither have yet taken a final investment decision, with some uncertainty around how volumes of green ammonia will be exported without firm offtake agreements or infrastructure in place.
H2Global’s double-sided auction mechanism
Hintco auctions ten-year purchase agreements for hydrogen or its derivatives from suppliers, who competitively bid to offer the lowest possible price.
H2 buyers then bid for sales agreements from the state intermediary company, with the difference in buy and sell prices covered by government funding.
The first three H2Global auctions for imports of green ammonia, methanol and e-SAF respectively are currently evaluating bids, with deliveries from winners expected by the end of 2024.
“We welcome the progress in Canada in the development of several renewable hydrogen and ammonia projects,” said German deputy chancellor Robert Habeck, who is also minister of economics and climate protection. “Although some challenges remain, we believe a common H2Global financing window can play an important role in closing the remaining pricing gap.”
However, the companies awarded the ten-year ammonia supply contracts in that tender are likely to face an extremely tight deadline to deliver hydrogen this year or early 2025, as required.
The city government of Japan’s capital Tokyo last month signed a cooperation agreement with Hintco, although an auction has not been scheduled. Similarly, the auction intermediary has indicated that it is discussing potential options for the Japanese national government, the UAE, and Austria to join the programme.