Commercial interfaces as a challenge for the build-up of hydrogen supply chains
The supply chains for renewable hydrogen and its derivatives are long, complex and often span multiple jurisdictions. Analyzing the ideal-typical renewable ammonia supply chain highlights enormous challenges in a highly uncertain market, including 1) information problems, 2) motivation or incentive problems, and 3) investment synchronization. During the build-up of structures, commercial risks must be managed at all contractual interfaces. From an organizational perspective, manufacturing, transportation, and processing are unlikely to be carried out by new and independent entities. Instead, historical trends in the gas industry suggest that coordination between broader segments of supply, logistics and the value chain will be relevant.
H2Global – Idea, Instrument and Intentions
H2Global is an innovative instrument that promotes timely and effective technology and market ramp-up of clean hydrogen and hydrogen derivatives. The German Federal Ministry for Economic Affairs and Climate Protection (BMWK) provides funding of EUR 900 million for the first ‘funding window’ of the auction-based instrument. This first ‘funding window’ is dedicated to the procurement of green products from partner countries outside the European Union (EU) and the European Free Trade Association (EFTA). The implementation and further development of the H2Global mechanism is carried out by the non-profit H2Global Foundation, while its subsidiary, Hintco, acts as an intermediary, conducting the H2Global auctions and using he funding provided by governments to compensate for the difference between supply and demand prices.
Certification and Guarantees of Origin for imported green hydrogen and PtX products
This paper analyses the Hydrogen Accelerator proposed in the European Commission’s REPowerEU common action plan and suggests concrete additional EU actions are needed to realize its ’20-Mton-hydrogen-target-by-2030.’ Key recommendations include establishing a European Hydrogen Cross-Border Infrastructure and Storage Facility that complements those of EU Member States, to develop pipelines, port facilities, and strategic hydrogen reserves. Further actions involve developing hydrogen demand per geographical area through ‘gas-to-hydrogen infrastructure conversion,’ creating a temporary Global European Hydrogen Facility to support domestic production and imports of renewable hydrogen, and having the Global European Hydrogen Facility use the H2Global mechanism to strengthen market liquidity and supply.