H2Global to declare results of renewable methanol tender in October

Germany's hydrogen derivative import scheme H2Global plans to announce the results of a renewable methanol tender next month, Anja Hajduk, State Secretary, Federal Ministry of Economic Affairs and Climate Action, Germany, said recently.

H2Global awarded the first renewable ammonia import tender to Germany in July, with Fertiglobe winning at a delivered price of Eur1,000 per metric ton ($1,088/t) for delivery to Northwest Europe.

Platts, part of S&P Global Commodity Insights, last assessed delivered renewable ammonia costs to Northwest Europe from the Middle East at $1,000/t on Sept. 16.

"Within the next month we will be able to publish the results of the ongoing auction for renewable methanol," Hajduk, said at the Asia-Pacific Hydrogen 2024 Summit and Exhibition in Brisbane Sept. 12.

"More international auctions for hydrogen and its derivatives are currently prepared and will hopefully soon be communicated," she added, announcing the signing of a joint declaration between Germany and Australia on a bilateral auction for renewable hydrogen and its derivatives.

Germany expects 50%-70% of its hydrogen demand in 2030 to be imported, Hajduk said, adding that the country was open to low-carbon hydrogen too, with a clear preference for renewable hydrogen in the long run.

On the subject of the upcoming auctions, H2Global's executive director and co-chair Susana Moreira told S&P Global Commodity Insights: "We are depending on the authorizations of the European Commission."

The upcoming H2Global auctions to Germany will be open regarding hydrogen derivatives, rather than specifying a particular "vector" and the details were "still being confirmed by the Commission," Moreira added.

Learnings

Moreira said there were learnings from the first tender, which was issued at a time when not all the legislation had been approved, so the upcoming tenders could factor in required changes.

Some of the countries where bidders are based had been "very overwhelmed with the complexity of the rules," Moreira said. This related to the countries' "own circumstances."

For example, "not all countries have this system where there is a bidding zone," she said referring to the rule for bidders that the renewable energy for a production site cannot be more than 500 km away.

"That is a hurdle particularly in countries like Australia where 500 km is actually not that much in certain contexts... so trying to figure out a way around that was another issue," she said. "We need to take some lessons out of it and try to improve so that we can facilitate the market ramp-up," Moreira said.

Partnerships

Germany is working together with the Netherlands on future import purchases and has agreed joint financing models with Canada and separately, just recently with Australia, on hydrogen supply deals.

Germany and Australia will each contribute Eur200 million for the H2Global auction, which facilitates imports and exports of renewable hydrogen derivatives such as ammonia and methanol from low-cost production regions to Northwest Europe, it was announced on Sept. 13.

Under the government-funded H2Global program, hydrogen intermediary company Hintco is set to purchase renewable hydrogen derivative imports for ammonia, methanol and SAF at the most competitive price and sell them to end-users via a separate competitive tender.

Tenders will cover long-term purchase agreements over 10 years, backed by an initial Eur900 million of German government funding.

The German government confirmed in February it would make up to Eur3.53 billion available for green hydrogen imports for 2027-2036 under H2Global.

Source: S&P Global Commodity Insights