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Germany awards tender to Fertiglobe for green ammonia from Egypt

Germany has awarded a tender to buy at least 259,000 metric tons (t) of green ammonia between 2027 and 2033 to UAE-based Fertiglobe, marking the first in a round of global tenders to import green hydrogen (H2) derivatives needed for decarbonization.

Europe's biggest economy is seeking to expand the use of green H2 fuel—made from water using solar or wind power—to cut emissions from industrial sectors that are hard to electrify, such as steel and chemicals, and reduce dependency on fossil fuel imports.

Germany will need to import around 50%–70% of its green H2 due to limited renewable energy resources needed to produce it.

"The import of green H2 products is a decisive step in the ramp-up of the H2 market in Germany," Economy Minister Robert Habeck said in a statement on Thursday.

Fertiglobe, a UAE-based partnership between Dutch OCI and Abu Dhabi National Oil Co (ADNOC), won the first tender for green ammonia which is used to make green H2. It will be produced in Egypt, where 273 megawatts (MW) of renewable energy plants are being built, the ministry said.

The bids for the tender, which was first announced in late 2022 and had attracted bids from over 65 countries, were conducted under the H2Global program, which Germany introduced in 2021 to drive the global market ramp-up of green H2 and boost investments.

"The successful auction via our H2Global instrument is a start, and further steps will follow soon," Habeck added.

Fertiglobe will produce up to 397,000 t of renewable ammonia by 2033, beginning with an initial supply of 19,500 t in 2027, with a maximum contract value of €397 MM ($431 MM), Hintco GmbH, the implementing entity of H2Global, said in a statement.

The auction established a contract price of €1,000/t, including delivery to Europe, and a net price of €811/t, Hintco said.

"The initial price signals from the pilot auction indicate substantial potential for achieving more competitive prices in future rounds," the company said.

The tender's volume accounts for more than 10% of Germany's annual ammonia production, the ministry said, adding it was working on another round of some €3.5 B of green H2 import contracts, including a second €600 MM funding round which will be co-financed with the Netherlands.

 

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