Huge support for exporters of green hydrogen as Germany earmarks €3.5bn for H2Global auction subsidies.

With this allocation, the total public funding for the H2 import subsidy program nears the €5bn capitalization pledged by Berlin.

The German government has announced today (Monday) that it will allocate more than €3.5bn ($3.8bn) to the nation's innovative green hydrogen purchasing program, H2Global. This funding will support further subsidy auctions for renewable hydrogen and its derivatives this year. The Hydrogen Intermediary Network Company (Hint.Co), responsible for managing the program, has received a grant notification of €3.53bn from the Federal Ministry for Economic Affairs and Climate Action (BMWK).

Hint.Co operates as both a hydrogen buyer and seller in H2Global's "double-sided" auction system. The company purchases green hydrogen or its derivatives on ten-year contracts and sells volumes to end-users through one-year offtake agreements. The price difference between the two is covered by Hint.Co's funding. This model aims to provide long-term revenue certainty to green hydrogen producers, enabling them to initiate projects without burdening potential buyers with the "green premium" associated with renewable hydrogen.

The grant increases the German government's total contribution to €4.45bn, including the previously promised €900m for the scheme's pilot auction. This aligns closely with Berlin's commitment of "more than €5bn" last year, which was built upon an earlier pledge of €4bn.

The H2Global Foundation, funded by private-sector energy giants like Uniper, BP, Shell, RWE, and Total, stated online that the grant is linked to the next round of double-sided tenders modeled after the H2Global mechanism. H2Global plans to launch the latest tenders this year, although the exact number of auctions is yet to be determined, pending decisions with the BMWK, the provider of funds.

The winners of the recently-closed €900m pilot auction are expected to be announced by H2Global in late spring. This latest grant follows the approval of Germany's 2024 budget by parliament, although the funds were initially promised as part of the 2023 budget. With the Netherlands committing €300m in 2023 for an auction this year, total public funding for the program reaches €4.73bn. Additionally, the Netherlands and Australia are in discussions to jointly fund auctions with Germany, while similar discussions are underway with officials from the United Arab Emirates.