The H2Global mechanism works via a double-auction system. In the first part, Hintco offers producers ten-year hydrogen (or H2 derivative) purchase agreements (HPAs) to the lowest bidders at auction.

And in the subsequent second part, Hintco sells that hydrogen (or derivative) to the highest bidder in short-term hydrogen sales agreements (HSA).

The sell-side auctions are due to commence in early 2026 — around 12 months ahead of first delivery of green ammonia from Fertiglobe, the sole winner of the pilot NH3 tender.

The full difference in cost between the purchase and sales price will be paid (ie, subsidised) by whichever government (or other entity) is funding each particular auction — much like a Contract for Difference (CfD) scheme. In this case, the funds are being provided by Germany and the Netherlands.

However, unlike a CfD — in which a government guarantees a certain “strike price” with the seller — the H2Global mechanism ensures that the market will decide both the purchase and sales prices, thus “discovering” market prices in a way that CfDs do not.

As Hintco CEO Timo Bollerhey told Hydrogen Insight in October 2024: “We're buying long to create the investment certainty for the supply side. On the supply side, we need long-term off-take agreements, fixed price, bankable offtaker, clear rules. This is what they need to take FID.

“On the demand side, a lot of offtakers cannot enter into long-term agreements. They can't take that long-term view. Some would like to take the volume risk, but not the price risk. Others not even the volume risk. So that’s why we go short on the demand side.

“But more important is two aspects. First of all, we are simulating like a CfD, because through the short tender auctions, we're only drawing the public funds that are needed to bridge that cost gap. And we assume that cost gap will diminish, because we will see prices on the demand side rising, green premiums rising.

“And secondly — and this is where we believe very much in market creation — we're providing constantly pricing signals on the demand side. That is so important as a signal to the markets.

“In Europe at least, what is the market willing and able to pay? And then projects worldwide can see whether they're in the money or not. That is exactly that kind of information that is lacking. We make that very transparent.”

H2Global to host separate green hydrogen auctions for different continents in upcoming €3bn tender round