Fertiglobe has been awarded the contract to supply renewable ammonia to the European Union (EU) after winning a pilot auction conducted by H2Global, backed by the German Federal Ministry for Economic Affairs and Climate Action (BMWK). The Abu Dhabi-based company, a joint venture between ADNOC and OCI Global, has committed to delivering renewable ammonia starting from approximately 19,500 tons in 2027 (subject to production commencement and availability), with potential volumes scaling up to a cumulative 397,000 tons by 2033. The contract specifies a delivered price of €1,000 per ton.

Ahmed El-Hoshy, CEO of Fertiglobe, highlighted the significance of the award in advancing sustainable ammonia production, marking a major step towards the Final Investment Decision (FID) of Egypt Green Hydrogen expected in the first half of 2025. He emphasized Fertiglobe's leadership in supplying low-carbon products, underscored by their selection as the winning bidder in H2Global’s pilot auction. El-Hoshy acknowledged the efforts of Fertiglobe's team in achieving this milestone and expressed gratitude for their contributions. He emphasized the importance of the program in making sustainable ammonia investments economically viable, supporting crucial decarbonization technologies, and aligning with their disciplined growth strategy.

The German government is investing €4.43 billion in H2Global's 'double-auction' mechanism, managed by Hintco. This initiative aims to fast-track the growth of renewable hydrogen and its derivatives. This model facilitates active participation from buyers and sellers, aiming to bridge the gap between current high global market prices for hydrogen and economically viable regional pricing strategies.

The introduction of renewable ammonia into Europe’s energy landscape enhances energy security and supports emissions reduction goals, with CO2 emissions reductions from imported renewable ammonia equivalent to those from 62,000 cars annually. This initiative signifies a substantial scale-up in Europe's renewable ammonia sector, complementing ongoing efforts to decarbonize the region's energy markets.

Fertiglobe’s successful bid secures a strategic, long-term European customer, reinforcing Europe's drive to diversify energy sources and bolster energy security. This initiative builds upon the UAE-Germany Energy Security and Industry Accelerator (ESIA) agreement signed in 2022. The ESIA agreement fosters cooperation in key areas like energy security, reducing carbon emissions (decarbonization), and developing low-carbon fuels. ADNOC's commitment to expanding global low-carbon ammonia value chains, alongside capturing 5% of the global low-carbon hydrogen market by 2030 as part of the UAE's National Hydrogen Strategy, further underscores these efforts.

Launched at the end of 2022, the pilot auction garnered interest from more than 65 countries spanning five continents. Lot 1 of the auction, focusing on renewable ammonia, saw the bid document downloaded over a thousand times by private companies, regulatory bodies, and academic institutions. During the qualification phase, 22 companies or consortia from across five continents submitted bids, with Fertiglobe emerging as the successful bidder among five finalists.

This auction underscores the feasibility of importing renewable ammonia into the EU at competitive prices, supported by targeted incentives for the most viable international projects. Fertiglobe is committed to producing ammonia in accordance with EU regulations for renewable hydrogen, ensuring compliance with additional environmental and sustainability criteria outlined in the tender process.

Timo Bollerhey, CEO of Hintco and Co-creator of H2Global, commented that the outcome of the auction strongly indicates the market potential of renewable hydrogen and its derivatives. He emphasized that the energy transition necessitates cost-effective and practical solutions, and the success of the first pilot auction shows that financial and procurement innovations, such as H2Global’s mechanism, are not only effective but essential for developing robust markets that stimulate and engage private financing.