Fertiglobe selected as winner of H2Global pilot auction for renewable ammonia supply

Fertiglobe announced today that it has been selected as the winning bidder to supply renewable ammonia to the European Union (EU) following a pilot auction conducted by H2Global, an initiative funded by the German Federal Ministry of Economic Affairs and Climate Action (BMWK).

Abu Dhabi-based Fertiglobe, a strategic partnership between ADNOC and OCI Global, has committed to supplying renewable ammonia, starting with a potential 19,500 tonnes in 2027. (depending on the actual start date of production and supply availability), with total production volumes potentially increasing to 397,000 tonnes by 2033 at a contract price of €1,000 ($1,087) per tonne.

Ahmed El-Hoshy, CEO of Fertiglobe, said: “This award represents a significant milestone for Fertiglobe in promoting sustainable ammonia production and another critical step towards FID Egypt Green Hydrogen, expected in the first half of 2025. Our selection as the winning bidder in the H2Global pilot auction underlines our leadership in delivering low-carbon products and our commitment to shaping a more sustainable future. I appreciate the work of our incredible team that made this award possible. We are leveraging this important program that makes our investment in sustainable ammonia economically viable, supporting a key decarbonization technology while maintaining our disciplined growth strategy.”

The German government has allocated €4.43 billion for the H2Global “double auction” mechanism implemented by Hintco to facilitate the rapid expansion of renewable hydrogen and related products. The “double auction” model, in which buyers and sellers actively participate, aims to bridge the gap between the high prices at which hydrogen is currently traded on the global market and the lower prices at which it can be sold and used in an economically viable way on a regional level.

Renewable sources of ammonia will help Europe ensure energy security and reduce emissions, which will translate into reduced CO emissions.₂– emissions from renewable ammonia imports are equivalent to the annual emissions of 62,000 cars. The project represents a significant increase in the European renewable ammonia market, contributing to ongoing efforts to decarbonise the European market.

By winning the tender, Fertiglobe has gained a long-term and strategic European customer. Fertiglobe’s offer supports Europe’s efforts to diversify energy sources and enhance energy security, and is aligned with the UAE-Germany Energy Security and Industry Accelerator (ESIA), signed in 2022. ESIA aims to promote cooperation on energy security, decarbonization and low-carbon fuels. This work is also aligned with ADNOC’s efforts to develop global low-carbon ammonia value chains and capture 5% of the global low-carbon hydrogen market by 2030, in support of the UAE National Hydrogen Strategy.

The pilot auction, launched in late 2022, attracted interest from over 65 countries across five continents. Lot 1 of the auction, which included renewable ammonia, saw over a thousand bid document downloads from private companies, regulators, and academic institutions. The qualifying phase attracted bids from 22 companies/consortia across five continents, with Fertiglobe emerging as the winning bidder out of five finalists.

The auction shows that renewable ammonia can be imported into the EU at attractive prices, while targeted support is offered to the most competitive international projects. Fertiglobe is committed to producing ammonia in compliance with EU regulations on renewable hydrogen and meeting additional environmental and sustainability requirements set out in the tender.

Timo Bollerhey, CEO of Hintco and co-founder of H2Global said: “The outcome of this auction is a strong indicator of the market potential of renewable hydrogen and its derivatives. The energy transition requires cost-effective, practical solutions – and this first pilot auction has shown that financial and procurement innovations like H2Global’s mechanism not only work, but are needed to create vibrant markets that motivate and mobilise private finance.”

Fertiglobe has been supported in its bid and will be provided with a secure supply of renewable hydrogen for the duration of the agreement by Egypt Green Hydrogen – a consortium of Fertiglobe, Scatec ASA, Orascom Construction, The Sovereign Fund of Egypt and Egyptian Electricity Transmission Company – located in the Suez Canal Economic Zone. During the recently held Egypt-EU Investment Conference, Fertiglobe signed an ammonia sales agreement with its consortium partners in Egypt Green Hydrogen, further developing its sustainable hydrogen and ammonia value chain and production capabilities.

Terje Pilskog, CEO of Scatec said: “The H2Global award represents a key milestone for the Egypt Green Hydrogen project in Ain Sokhna, Egypt. It demonstrates the competitiveness of green hydrogen and ammonia production in Egypt, driven by abundant renewable energy resources, strategic geographic location and strong government support. With Fertiglobe securing an ammonia collection agreement, Egypt Green Hydrogen will accelerate the development of the project and bring it to financial close.”

Waleid Gamal El-Dien, Chairman of SCZone, added that the sale secured through the H2Global auction is a demonstration of the EU’s support for the emerging green hydrogen industry and the realization of Egypt’s potential. It also underlines Egypt’s determination to realize its vision, “while showcasing its comparative advantages resulting from abundant renewable energy resources, industrial areas and a unique and strategic geographical location.”

The H2Global award continues Fertiglobe and ADNOC’s track record of delivering demonstration cargoes of renewable and low-carbon ammonia to Europe and Asia, supporting the global low-carbon ammonia and hydrogen value chains. In 2023, Fertiglobe delivered the world’s first ISCC PLUS certified, globally recognised renewable ammonia, produced using renewable hydrogen from the Egypt Green Hydrogen pilot electrolyser.

In May 2024, Fertiglobe produced the world’s first mass shipment of certified CCS-enabled low-carbon ammonia, delivered by ADNOC to Japan’s Mitsui & Co. for use in clean energy production. Fertiglobe has other low-carbon ammonia projects underway, including the 1 million tonnes per annum (mtpa) TA’ZIZ low-carbon ammonia plant at Al Ruwais Industrial City in partnership with TA’ZIZ, Mitsui & Co. and GS Energy Corporation.