Germany awards first green hydrogen import contract to ammonia project in Egypt

In its highly anticipated first auction for the import of green hydrogen products, Germany has awarded a contract to receive green ammonia from Egypt. “Between 2027 and 2033, at least 259,000 tonnes of green ammonia will be exported to Germany. This corresponds to more than ten per cent of Germany's annual ammonia production,” the economy ministry said. Green economy and climate minister Robert Habeck called the purchase agreement with the North African country “an important step for the transformation of Germany as an industrial location, climate protection and sustainable jobs in our country”, adding that the import of green hydrogen products “will decisively advance the hydrogen market ramp-up in Germany”. The contract was awarded to fertiliser specialist Fertiglobe, a company based in the United Arab Emirates. Fertiglobe will produce the green ammonia in Egypt by installing 273 megawatts of renewables, resulting in annual CO2 emissions savings of 93,000 tonnes, the ministry said.

The contract was awarded at a price of 811 euros per tonne of ammonia, which translates into less than 4.50 euros per kilogram of green hydrogen. “These are lower costs for green hydrogen derivatives compared to current estimates and initial other auction results,” the ministry said. Other experts also welcomed the results. “Not bad at all for a project due to enter service in 2027/2028, and ahead of expectations of some of the doomier outlooks of late,” said hydrogen specialist Gniewomir Flis. He added that the project feeds green hydrogen to an existing ammonia plant, which provides a significant cost advantage. Germany’s economy ministry said it will now build on the experience of the first auction to work on a further import round totalling 3.5 billion euros.

Green hydrogen is set to play a crucial role in the decarbonisation of many hard-to-abate sectors, such as steelmaking and the chemical industry. But it is unlikely that Germany or Europe as a whole will be able to meet the entire projected demand with local production. Importing from regions with better potential for renewable electricity production, such as Africa, is therefore going to be key for a reliable supply. Germany's government is set to present a hydrogen import strategy soon.