Australia’s federal government has signed a bilateral agreement with Germany to launch a joint €400 million (AU$660 million) renewable hydrogen auction.
The newly signed joint declaration of intent (JDoI) locks in the technical structure and long-term funding parameters for the Australia-Germany H2Global Joint Tender.
Under a joint H2Global auction, both nations will contribute up to €200 million (AU$330 million) each to back a unique double-sided auction mechanism managed by Hint.Co GmbH.
The joint funding pools will be used to purchase premium renewable hydrogen products, such as green hydrogen, ammonia, and methanol, directly from clean energy projects located in Australia via a supply-side reverse auction.
The acquired fuels will then be immediately resold to European industrial buyers via a secondary demand-side auction.
The €400 million in combined government funding will act as a financial bridge, offsetting the cost differential between the higher initial production price of Australian green fuels and the lower market price German industrial buyers are currently willing to pay.
Parliamentary State Secretary for Economic Affairs and Energy Stefan Rouenhoff said the strategic shipping corridor will heavily insulate European industrial markets from future supply shocks.
“We are stepping up efforts to base our national energy policies on a broader foundation and reduce energy dependencies,” Rouenhoff said.
“With this Joint Declaration of Intent, we are paving the way for a more resilient energy supply and further decarbonisation of our industry.”
The agreement marks the culmination of talks starting in 2024 for the initiative. The JDoI details the long-term cooperation regarding H2Global, which envisages joint support spanning up to 10 years.
Initial deliveries of renewable hydrogen products – such as hydrogen, ammonia, or methanol – from Australia are expected to start in 2030.
German companies require these products to achieve their climate targets.
