The German government could disburse more than €3.5bn in support of renewable hydrogen production projects globally in a second round of the H2Global mechanism, according to a consultation document.
The country's economy and climate protection ministry is surveying industry participants on the proposed design and criteria for a second round of the scheme that is intended to bolster the ramp-up of global renewable hydrogen production. It committed €900mn for the scheme's first round and previously set aside more than €3.5bn for future auctions without specifying how the funds would be allocated, or across how many auctions.
The consultation document suggests the full amount could be made available in a single round.
The government's envisaged design shows financial support split across six lots (see table). Two would be for a 'vector open' category, which would entail final delivery of renewable hydrogen with suppliers free to decide which transport vector to use. This could allow for deliveries by pipeline, or for seaborne transport by vectors such as ammonia, liquid hydrogen or liquid organic hydrogen carriers (LOHCs). If transport vectors are used, suppliers would be responsible for converting the supply back to gaseous hydrogen.
One of these lots — which would probably include a €300mn funding contribution from the Netherlands — would be open for projects anywhere in the world, and one would be specifically for European projects. The first round was open only to projects outside the EU.
The four other slots are referred to as 'product open' and would be available to deliveries of renewable hydrogen or derivatives, such as ammonia, e-methanol, synthetic methane or sustainable aviation fuels (SAF). These are split by projects in four geographical regions.
Delivery for all lots would be to points of sale in Germany or the Netherlands.
The H2Global scheme aims to close the gap between the costs of production and the price that customers are willing to pay. Specialised entity Hintco will buy renewable hydrogen and/or derivatives through 10-year contracts with suppliers and sell the products through one-year contracts, with government funds to cover the expected price difference.
The consultation mentions a 2026-36 timeframe. This could refer to the envisaged 10-year delivery period, although 2026 would be a highly ambitious start date for deliveries given the mechanism is targeting projects that are yet to be developed.
The first round, split into specific lots for ammonia, e-methanol and e-SAF, was concluded in early 2023. Winners have yet to be announced.
Interested participants can submit responses to the consultation until 22 July, after which the design will be finalised.
| Proposed lots for H2Global second round | ||
| Region | Type of lot | Budget range (in €mn)* |
| Europe | Vector open | 600 - 1100 |
| Global | Vector open | 600† |
| North America | Product open | 300 - 600 |
| Asia | Product open | 300 - 600 |
| Africa | Product open | 300 - 600 |
| South America & Oceania | Product open | 300 - 600 |
| *total budget allocated would not exceed €3.531bn; † of which Germany's contribution will be €300mn, with the rest likely to come from the Dutch government | ||
| - Germany's economic affairs and climate protection ministry | ||
