German H2 import scheme shapes up

Germany's "H2Global" hydrogen import scheme is expected to be implemented this year, delegates heard at an online event this week.

Under Germany's H2Global concept, a hydrogen intermediary network company — Hint.Co — would act as a market maker, buying and selling imported green hydrogen, Timo Bollerhey of the H2Global task force at international co-operation agency GIZ, said.

In a first step, requests for proposals for green hydrogen — produced on the basis of renewable power — or its derivatives would be issued by Hint.Co in co-operation with local partners.

Long-term hydrogen purchase agreements (HPA) would then be signed between an industry consortium or financiers, and power-to-x (PtX) project developers in different countries. The HPA would then be tendered to Hint.Co.

Hint.Co would tender short-term hydrogen service agreements (HAS) to different domestic off-takers in different industries, such as Germany's steel, chemicals, or transport sectors.

HPAs would typically have a duration of 10 years, to guarantee a project's security of investment. A HAS would have a duration of one year to enable off-takers to "react to market developments", Bollerhey said.

Hint.Co would offset the price difference, "analogous to a CfD [carbon-for-difference] model", Bollerhey said, with the difference expected to gradually fall over the years. The firm would also act as a "bankable" guarantor towards the final off-taker, of the ability to deliver hydrogen or PtX. Its bankability would be guaranteed either by Germany's federal economy and energy ministry, or the federal finance ministry.

H2Global has been awarded €1bn as part of Germany's hydrogen strategy.

Bollerhey stressed that the H2Global model has been checked for compatibility with EU state-aid rules. Project developers are also is in contact with the European Commission on this, he said. Germany is looking at the possibility of having the model qualify for funding as part of the Important Project of Common European Interest scheme.

The support scheme will come with clear rules on additionality and sustainability, Bollerhey said.

Asked about the effect the looming federal elections in September could have on the scheme, Bollerhey said there will be no change, even in the case of a government change. The only danger in this context would be a slowdown of the scheme's roll-out. Bollerhey said feedback from Germany's industry suggests that "every month of delay is a loss".

Bollerhey rejected suggestions that Germany risks getting stuck with large quantities of unused hydrogen volumes — GIZ analysis shows that demand and need for hydrogen "by far" exceed the volumes that will be transported within the H2Global scheme.

H2Global has not yet defined a delivery point for the contracted hydrogen volumes. But what is clear already is that it will be "at least" a cross-border point, Bollerhey said.

By Chloe Jardine