Fertiglobe secures a deal with Germany on green ammonia supply

Germany has entered into a significant agreement with UAE-based Fertiglobe for the supply of at least 259,000 metric tons of green ammonia, to be produced in Egypt from 2027 to 2033. This marks the first initiative under a series of international tenders aimed at acquiring green hydrogen derivatives, vital for the nation’s decarbonization efforts.

The deal highlights Germany’s strategy to reduce its reliance on fossil fuels and decrease emissions in sectors like steel and chemicals, which are challenging to electrify. According to government estimates, Germany will need to import 50% to 70% of its green hydrogen, given the limited domestic renewable energy capacity.

Economy Minister Robert Habeck emphasized the significance of these imports in bolstering Germany’s hydrogen market. “The import of green hydrogen products is a decisive step in the ramp-up of the hydrogen market in Germany,” Habeck stated.

Fertiglobe, a joint venture between Dutch OCI and Abu Dhabi National Oil Co (ADNOC), was selected through the H2Global program, initiated by Germany in 2021 to stimulate the global green hydrogen market and attract investments. The tender attracted competitive bids from over 65 countries.

The initial phase of the agreement will see Fertiglobe supply 19,500 tons of green ammonia in 2027, with plans to scale up to 397,000 tons by 2033. The total value of the contract could reach 397 million euros ($431 million), with a procurement cost of 1,000 euros per ton, including delivery to Europe.

“The successful auction via our H2Global instrument is a start, and further steps will follow soon,” added Habeck. The ministry also disclosed plans for a new 3.5 billion euro tender for green hydrogen imports, with an additional 600 million euro funding round to be co-financed with the Netherlands. This move further underscores Germany’s commitment to transitioning to a more sustainable energy future.

Source: Reuters