Germany announced plans to conduct a green hydrogen auction, valued at AUD $660 million ($444 million USD), for green hydrogen imports into Australia. Utilizing the H2Global funding mechanism, this bilateral auction agreement was signed at the Asia Pacific Hydrogen Summit and Exhibition in Brisbane by Chris Bowen, the Australian Minister for Climate and Energy, and Anja Hajduk, the German State Secretary for Economic Affairs and Climate Action.
Overview of the Global Green Hydrogen Auction
The joint funding initiative aims to be operational over the next decade, facilitating new commercial supply chains and providing access to the European market through guaranteed offtake agreements. This green hydrogen auction is designed to enhance the production and export of green hydrogen, aligning closely with the renewable energy goals of both countries.
H2Global, a non-profit organization, will use a double-auction mechanism through its government-backed subsidiary, the Hydrogen Intermediary Network Company. This entity is responsible for buying and selling green power-to-X products, primarily sourcing green hydrogen from early-stage developers to support the expansion of a hydrogen economy.
Additionally, industry stakeholders will have the opportunity to provide valuable input and recommendations on the structure of the auction and trade window, fostering a collaborative approach to the development of a global green hydrogen market.
The Importance of Renewable Hydrogen to Global Leaders
Minister Bowen emphasized the strategic importance of renewable hydrogen, stating, “Renewable hydrogen is key to Australia’s 21st-century export prosperity. The world needs it. We can make it. And we can ship it to our partners or use it to make green products, chemicals, and fuels in Australia to export to the world.”
German Vice Chancellor Robert Habeck echoed these sentiments: “This partnership is not just a declaration; it’s a pathway to tangible action that strengthens our economies and supports the global transition to net zero.” He also expressed confidence that the joint auctions under H2Global will stimulate market activity and provide essential price signals for hydrogen.
Australia’s National Hydrogen Strategy
Coinciding with this announcement, the Australian Government unveiled its updated National Hydrogen Strategy on September 13, 2024. This strategy aims to position Australia as a large-scale exporter of hydrogen. Treasurer Jim Chalmers introduced the AUD $22.7 billion (approximately $15.2 billion) Future Made in Australia (FMIA) Act framework as part of the 2024-25 budget. The FMIA Act seeks to enhance investments in renewable energy, clean energy manufacturing, economic and workforce development, and innovation over the next decade.
Treasurer Chalmers stated that the FIMA Act would help Australia remain an “indispensable part” of the global clean energy economy, particularly in response to significant international policies such as the Inflation Reduction Act and the European Net Zero Industry Act. The updated strategy sets ambitious targets, aiming to produce 15 million tons of green hydrogen per year by 2050, with a potential stretch goal of 30 million tons. To support these objectives, the Australian government will implement a Hydrogen Production Tax Incentive of AUD $2 per kilogram.
A Global Green Hydrogen Economy
The green hydrogen auction between Germany and Australia represents a pivotal step in accelerating a global green hydrogen economy. Dr. Fiona Simon, CEO of the Australian Hydrogen Council, noted that participation in the H2Global scheme will enable Australian producers to meet the EU’s targets for clean molecule imports. As both nations work together, this partnership is expected to facilitate significant advancements in sustainable energy production, enhance export capabilities, and kick-start the renewable hydrogen market’s growth.
