Officials grappling with how to expand Germany’s flagship hydrogen import auction scheme H2Global throughout Europe — as announced by the European Commission (EC) and German government in May — are set to be presented with two possible solutions, Hydrogen Insight has learned.

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Hintco, the intermediary company managing the H2Global double-sided auction platform (see panel below) on behalf of the German government, has come up with a duo of proposals that can be used separately or in tandem, which it plans to present to the EC as it starts discussions this week.

The first option, dubbed the “Team Europe approach” by Hintco CEO Timo Bollerhey, would see member states setting up their own dedicated auction windows, run either by Hintco or by a subsidiary set up in that country.

“We are already doing [this] with the Dutch government,” Bollerhey told Hydrogen Insight at a press conference yesterday (Tuesday), referring to the €300m auction announced in April, which is due to take place at the end of this year or beginning of 2024.

The government department providing funds for the auction would set the terms and criteria for what hydrogen or derivatives would be eligible, but Bollerhey noted that it is unlikely member states will seek to deviate from the definitions set out under the EC’s recently published Delegated Acts.

The second option would see Hintco directly backed with funds from the EC, although this would require a so-called “pillar assessment” to allow it to manage EU funds. This would also require the EC to set the auction rules.

“In this case, it will be an import instrument,” Bollerhey told Hydrogen Insight.

The Commission is due to run an auction within the EU this December, awarding a fixed premium of up to €4 ($4.32) per kilogram to cover the cost gap between grey and green hydrogen production.

However, he added that the Team Europe approach would allow member states to run auctions for domestic production and offtake.

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.