Production

Australia poised to jointly fund a €400m H2Global green hydrogen subsidy auction with German government

Money will be used to subsidise green hydrogen produced in Australia and exported to Germany

Timo Bollerhey, CEO, Hintco.
Timo Bollerhey, CEO, Hintco.Photo: Free State of Saxony, SMWA
Australia looks set to join the H2Global green hydrogen subsidy auction scheme, following talks with the German government to jointly fund a €400m ($436m) auction for the import of Australian renewable H2 to Germany, the company managing the H2Global auction programme has confirmed to Hydrogen Insight.

Stay ahead on hydrogen with our free newsletter

Keep up with the latest developments in the international hydrogen industry with the free Accelerate Hydrogen newsletter. Sign up now for an unbiased, clear-sighted view of the fast-growing hydrogen sector.
Sign up now

The confirmation comes as it emerged that Germany is courting several international governments with a view to persuading them to either jointly fund auctions on H2Global, or to implement their own similar programmes.

Berlin is currently in discussions with Australian officials over its proposal, proffered late last year, which envisages each country contributing €200m each.

The H2Global auctions allow producers to bid for subsidies to plug the gap between the cost of producing green hydrogen and the market price of polluting grey H2 (made with unabated fossil fuels). The winners of the first €900m tranche — those that have placed the lowest bids — are due to be announced in the coming weeks.

A separate auction will then follow under the H2Global scheme, in which the imported green hydrogen will then be sold to the highest bidders in Germany.

Timo Bollerhey, CEO of the Hydrogen Intermediary Network Company (Hint.Co), the German government-funded organisation managing the H2Global auctions, told the Australian Financial Review (AFR) that Canberra is considering the proposal, but has not yet given an answer.

A spokesperson for the H2Global auction platform confirmed that the organisation is also in discussions with the United Arab Emirates (UAE) on a similar proposal, that would see UAE-produced renewable hydrogen and its derivatives imported to Europe.


H2Global has been thrown into uncertainly in recent months when Germany's constitutional court ruled that the government cannot use €60bn of unused Covid recovery funds for climate mitigation projects, of which the auction platform is one.

But spokesperson for the H2Global auction platform told Hydrogen Insight that the situation with its funding has “evolved”.

“We are confident that we will receive some, if not all, of the funds that have been earmarked by the German authorities,” the spokesperson said.

Japan, Austria and UAE have all “expressed an interest in using or adopting our instrument [auction platform]”, the spokesperson explained, which suggests that Austria could be in line to fund an auction for its own supply of green H2 and its derivatives.

And H2Global is also advising the Japanese government on setting up its own domestic mechanism for subsidised renewable hydrogen imports.

“We’re entering into MOUs [memoranda of understanding] with key Japanese entities, representing public and private interests to advise them on setting up similar mechanisms within Japan,” Bollerhey told AFR. “That obviously becomes very interesting then for Australia again,” he added, referring to the fact that Australian producers could also bid in to any Japanese programme.

It is not clear whether the discussions with officials in Tokyo are limited to setting up a Japanese auction system, or if it is also considering financing an auction on the H2Global platform for imports to Japan.

H2Global’s double-sided auction sees producers bidding for subsidies to deliver green H2 and its derivatives to Germany under ten-year contracts, with volumes then sold on to end users via one-year offtake agreements.
The Dutch government has already agreed to jointly finance a €600m “funding window” (H2Global’s term for an auction) with Germany for delivery into the Netherlands from 2027.
CORRECTION: an earlier version of this article stated that the talks with Australia had evolved since AFR's interview with H2Global's CEO. However, the H2Global spokesperson was in fact referring to discussions regarding the organisation's funding from the German government.
(Copyright)
H2GlobalGermanyAustraliaGreen H2United Arab Emirates
Published 25 January 2024, 08:48Updated 25 January 2024, 16:03