Germany has awarded a tender to UAE-based Fertiglobe to purchase a minimum of 259,000 metric tons of green ammonia between 2027 and 2033. This marks the first of several global tenders aimed at importing green hydrogen derivatives essential for decarbonization. Fertiglobe, in collaboration with Scatec ASA’s Egypt Green Hydrogen Project, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company, has secured a 20-year offtake agreement based on the H2Global award.
Germany’s objective is to expand its use of green hydrogen, produced from water using renewable energy like solar or wind, to reduce emissions in sectors like steel and chemicals that are difficult to electrify. This move also aims to decrease dependency on fossil fuel imports. The Egypt Green Hydrogen project, part of this initiative, is a significant step in this direction, having reached a key milestone with Fertiglobe’s agreement with Hintco in Germany through the inaugural H2Global auction.
The agreement, signed at the Egypt-EU Investment Conference on June 29, 2024, represents a critical development for sustainable ammonia production and supports the future development of the Egypt Green Hydrogen project, expected to reach a final investment decision in the first half of 2025. Fertiglobe’s CEO, Ahmed El-Hoshy, highlighted the importance of this award in advancing low-carbon products and sustaining their growth strategy.
Germany, with limited renewable energy resources for green hydrogen production, will need to import between 50% and 70% of its green hydrogen. Economy Minister Robert Habeck emphasized the importance of these imports for developing Germany’s hydrogen market. Fertiglobe, a partnership between Dutch OCI and Abu Dhabi National Oil Co (ADNOC), won the first tender for green ammonia, which will be produced in Egypt, where 273 megawatts of renewable energy plants are being constructed.
The tender, announced in late 2022, received bids from over 65 countries under the H2Global program, launched by Germany in 2021 to stimulate the global green hydrogen market and encourage investments. Habeck noted that this successful auction is the beginning, with more steps to follow.
Fertiglobe is set to produce up to 397,000 tons of renewable ammonia by 2033, starting with an initial supply of 19,500 tons in 2027. The maximum contract value is 397 million euros, with a contract price of 1,000 euros per ton, including delivery to Europe, and a net price of 811 euros per ton. The pilot auction suggests the potential for more competitive prices in future rounds.
The tender’s volume exceeds 10% of Germany’s annual ammonia production. The ministry is planning additional green hydrogen import contracts worth around 3.5 billion euros, including a second funding round of 600 million euros co-financed with the Netherlands.
Located in Egypt’s Suez Canal Economic Zone (SCZONE), the project aims to make Egypt a key player in the green hydrogen industry. Waleid Gamal Eldien, Chairman of SCZONE, noted the significance of the Egypt-EU Investment Conference 2024 and the offtake agreement, highlighting Egypt’s potential and commitment to becoming a global green ammonia hub.
