Fertiglobe To Supply Renewable Ammonia To EU Following H2Global Auction Win

Fertiglobe has been chosen to supply renewable ammonia to the European Union (EU) following a pilot auction by H2Global, funded by Germany's Federal Ministry for Economic Affairs and Climate Action (BMWK). The Abu Dhabi-based company, a partnership between ADNOC and OCI Global, will start with 19,500 tonnes in 2027, potentially scaling up to 397,000 tonnes by 2033 at €1,000 per tonne.

The renewable ammonia supply will bolster Europe's energy security and emissions reduction efforts. This initiative is expected to mitigate CO2 emissions equivalent to those of 62,000 cars annually. It marks a significant step in decarbonising the European market.

Fertiglobe's successful bid secures a long-term strategic customer in Europe. This aligns with the UAE-Germany Energy Security and Industry Accelerator (ESIA) agreement signed in 2022. The ESIA aims to advance cooperation in energy security and decarbonisation.

The German government has allocated €4.43 billion to H2Global’s "double-auction" mechanism managed by Hintco. This model aims to bridge the gap between high global hydrogen prices and lower regional prices for economic viability. Buyers and sellers actively participate in this auction system.

Ahmed El-Hoshy, CEO of Fertiglobe, stated, "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, and I appreciate the work of our incredible team to make this award possible."

Market Potential

The pilot auction launched at the end of 2022 attracted interest from over 65 countries across five continents. Lot 1 of the auction focused on renewable ammonia and saw over a thousand downloads of bid documents from various entities. Fertiglobe emerged as the successful bidder among five finalists from 22 companies/consortia.

Timo Bollerhey, CEO of Hintco and Co-creator of H2Global, commented on the auction's success: "This auction result is a strong indication of the market potential of renewable hydrogen and its derivatives. The energy transition requires value for money, workable solutions – and this first pilot auction has demonstrated that financial and procurement innovations like H2Global’s mechanism not only work but are needed to create thriving markets that motivate and mobilise private finance."

Egypt Green Hydrogen Project

Fertiglobe's bid was supported by Egypt Green Hydrogen consortium partners including Scatec ASA, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company. Located in the Suez Canal Economic Zone, this consortium ensures a secure supply of renewable hydrogen for Fertiglobe's contract duration.

Terje Pilskog, CEO of Scatec ASA said: "The H2Global award represents a key milestone for the Egypt Green Hydrogen project in Ain Sokhna, Egypt. 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."

Commitment to Sustainability

Ayman Soliman, CEO of The Sovereign Fund of Egypt added: "The award is testament to the strength and competitiveness of Egypt’s ecosystem in green fuels... We are proud of this partnership that has succeeded in accelerating Egypt’s ambitions as a primary exporter of green fuels and fertilisers to Europe as we remain committed to investing and supporting the global energy transition."

Osama Bishai, CEO of Orascom Construction commented: "This award reinforces Egypt Green’s position as a first mover in the hydrogen industry... We also look forward to leveraging our industrial capabilities in executing the hydrogen plant and associated renewable energy infrastructure."

Future Prospects

The H2Global award builds on Fertiglobe's track record with ADNOC in delivering low-carbon ammonia globally. In May 2024, Fertiglobe produced the world’s first bulk shipment of CCS-enabled certified low-carbon ammonia delivered by ADNOC to Japan’s Mitsui & Co. for clean power generation.

Waleid Gamal El-Dien, Chairman of SCZone stated: "The secured off-take via H2Global demonstrates EU support for emerging green hydrogen industries... showcasing its comparative advantage stemming from its abundant renewable power resources..."

This achievement supports ADNOC's goal to capture 5% of the global low-carbon hydrogen market by 2030 under UAE’s National Hydrogen Strategy.

With inputs from WAM