Against strong global competition, Abu Dhabi-based Fertiglobe has won the bid to potentially supply 397,000 tons of renewable ammonia cumulatively by 2033 to the European Union at a delivered contract price of €1,000 ($1,086) per ton.
Fertiglobe, has committed to start by supplying a potential 19,500 tons in 2027 (subject to actual production start date and supply availability), with volumes increasing in the following years.
This follows a pilot auction by H2Global, an initiative funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK). The auction saw participation from 65 countries across five continents.
Lot 1 of the auction recorded over a thousand downloads of the bid document from private companies, regulatory authorities, and academic institutions. As many as 22 companies/consortia across five continents went through the qualification phase.
Fertiglobe, a strategic partnership between ADNOC and OCI Global, finally emerged as the successful bidder from five finalists.
The renewable ammonia supply will help Europe’s energy security and emissions reduction efforts and marks a significant ramp-up in the European renewable ammonia market.
On securing a long-term and strategic European customer, Ahmed El-Hoshy, Chief Executive Officer of Fertiglobe, commented: “This award marks a significant milestone for Fertiglobe in advancing sustainable ammonia production and a further critical step towards FID of Egypt Green Hydrogen, expected in H1 2025.
“Our selection as the winning bidder in H2Global’s pilot auction underscores our leadership in supplying low-carbon products and our commitment to shaping a more sustainable future. We are leveraging this vital program which makes our investment in sustainable ammonia economically viable, supporting critical decarbonisation technology, while maintaining our growth strategy.”
The German government has committed €4.43 billion to H2Global’s ‘double-auction’ mechanism to facilitate the rapid expansion of renewable hydrogen and derivative products.
The ‘double-auction’ model, whereby buyers and sellers actively participate, aims to bridge the difference between the high prices at which hydrogen is currently being traded on the global market, and the lower prices at which it can be sold on and be used in economically viable ways at regional level.
The unique auction was carried out by Hintco, which is an implementing entity of the H2Global. Its core task is to ensure competitive bidding processes for the purchase and sale of clean hydrogen-based products and other low-carbon commodities.
Timo Bollerhey, Chief Executive Officer of Hintco and Co-creator of H2Global, said: “This auction result is a strong indication of the market potential of renewable hydrogen and its derivatives. The energy transition requires value for money and workable solutions – and this first pilot auction has demonstrated that financial and procurement innovations like H2Global’s mechanism not only works, but are needed to create thriving markets that motivate and mobilise private finance.”
Fertiglobe was supported in its bid – and will be ensured a secure supply of renewable hydrogen for the contract’s duration – by Egypt Green Hydrogen, which is a consortium between Fertiglobe, Scatec ASA, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company. During the recently held Egypt-EU Investment Conference, Fertiglobe signed an ammonia sale agreement with its consortium partners in Egypt Green Hydrogen, further developing its sustainable hydrogen and ammonia value chain and production capabilities.
Terje Pilskog, Chief Executive Officer of Scatec, said: “The H2Global award represents a key milestone for the Egypt Green Hydrogen project. This demonstrates the competitiveness of green hydrogen and ammonia production in Egypt, driven by its abundant renewable energy resources, strategic geographical location, and strong government support.
“With Fertiglobe securing an offtake agreement for the ammonia, Egypt Green Hydrogen will accelerate the project’s development and advance it towards financial close.”
Fertiglobe’s bid supports Europe’s efforts to diversify its energy sources and aligns with ADNOC’s efforts to grow global low-carbon ammonia value chains and capture 5 percent of the global low-carbon hydrogen market by 2030.
The H2Global award builds on Fertiglobe and ADNOC’s track record of delivering demonstration cargoes of renewable and low-carbon ammonia to Europe and Asia. In 2023, the company completed a shipment of the world’s first internationally recognised renewable ammonia, produced using renewable hydrogen from its pilot Egypt Green Hydrogen electrolyzer. In May 2024, it produced the world’s first bulk shipment of CCS-enabled certified low-carbon ammonia, delivered to Japan’s Mitsui & Co. for use in clean power generation.
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