H2Global Update: German Hintco Prepares First Resale and Second Import Tender for Renewable Hydrogen

The German H2Global foundation is advancing its mission to kick-off the renewable hydrogen industry by acting as a market maker for hydrogen through bridging the gap between production and purchase prices and differing contract durations. To this end, H2Global’s investment vehicle Hintco holds (1) tenders for the import of green hydrogen (including hydrogen derivates) based on long-term contracts and subsequently, (2) tenders for the resale of the imported hydrogen products with a shorter time-frame.

After having finalised the first round of import tenders in August 2024, Hintco is now advancing towards both its first resale tender as well as towards its second import tender. 

Preparing the second round of import tenders: HPA published

Hintco has published draft Hydrogen Purchase Agreement (“HPA”) and other tender documents of the second round of import tenders for delivery between 2028 and 2036. The tender has an envisaged total funding of EUR 2.5 billion with the potential to increase to approx. EUR 3 billion. 

Project requirements

The projects need to satisfy the following requirements:

• As in the first tender round, all imported hydrogen products must qualify as “renewable fuels of non-biological origin” (RFNBO) as defined in the European Renewable Energy Directive (RED III) (on RFNBOs see our separate blogpost) and fulfil additional sustainability requirements, e.g. regarding water treatment;
• Projects must have a minimum electrolysis capacity of 5 MW;
• Construction cannot start prior to the submission of the bid. 

4+1: Regional and global lot(s)

While the first round of import tenders featured three lots for the import of ammonia, methanol and eSAF (i.e. renewable jet fuel), the second round of import tenders will contain five lots, one of which will be jointly funded with the Netherlands:

German funded tender lots (“regional” lots): The tender lots backed by the German state are structured into four regional lots for hydrogen products from (1) Africa, (2) Asia, (3) South America and Oceania and (4) North America. Eligible products in each lot are hydrogen, ammonia or methanol (each fulfilling the EU RFNBO criteria) as final products. Bids for eSAF will not be eligible in this tender round. 

Each regional lot is worth 484m €, split to yearly volumes of 58.7m €/a. Subject to pending German budget law the budget might be increased by approx. 100m €.

German/Dutch funded tender lot (“global lot”): The global lot will only be open to hydrogen as a final product but will allow for flexible transport/conversion methods (e.g. liquid organic hydrogen carriers, ammonia). The global lot is jointly funded by the governments of Germany and the Netherlands. It allows for imports from all countries (including other EU countries) other than Germany or the Netherlands. Tender documents for the global lot are yet to be published.

Negotiating and bidding: One HPA for all

During the tender process Hintco will enter into separate negotiations with all qualified bidders on the technical terms of the HPA, but not on price and volume. Upon conclusion of this phase, final contracts will be published for each lot. Bidders are expected to bid on one final version of the HPA for each lot.

Bidders will then hand in their offers (planned to be received by March 2026) which are not open for further negotiations and must be unconditional, i.e. all committee approvals must be in place before placing the final offer. The bid must include (i) a fixed annual price, (ii) a guaranteed annual supply volume and (iii) an optional maximum annual volume, purchase of which depends on additional funding available to Hintco.

HintCo will evaluate all bids based on a weighted score:

• 90 points go to the bidder offering the lowest price per product unit bid (marginal bid). In the product open regional lots bids will be compared based on the lower heating value (LHV) of the product offered. Bidders offering higher prices per product unit will receive proportionally fewer points.
• 10 points go the bidder offering the largest maximum optional delivery quantity, proportionally fewer points to bidders offering smaller optional delivery quantities. Should Hintco generate supplementary revenues in the resale auctions it may use these revenues to buy additional quantities offered in the import tender.

Should the marginal bid not exhaust the entire tender budget for the lot, the next bidder(s) may be awarded, too. Should the remaining budget be too small for the next eligible bid, all remaining bidders get a chance to resubmit their bids in view of the remaining budget.

Highest-ranked bidders must then pass an excess return check in which an independent and reputable auditor demonstrates that the project will not achieve excess returns through the scheme. In addition, the highest-ranked bidders shall provide valid pre-certification through a recognized voluntary scheme. 

Delivering: The earlier the better

The auction process ends with Hintco entering into an HPA with the winning bidder(s). Production must start within 5 years after the bid award. Bidders should note that the contract duration is fixed in a way that first deliveries have to be made in 2028 in order to receive funding over the max. contract duration of 9 years. Also, deliveries not made in a given year cannot be carried over to following years.

Compared to the first tender round, the delivery is not bound to delivery by ship but can be agreed for different delivery hubs in Germany or – regarding the global lot – the Netherlands. To qualify as a suitable point of delivery the hubs have to allow for different modes of onwards transport of the hydrogen product. Pure hydrogen could also be delivered to the virtual trading point of the German or Dutch hydrogen network as soon as the infrastructure is in place.

The second tender round has been approved by the European Commission with respect to state aid law in December 2024. Notably, for the second tender round the Commission has only evaluated the import side of the scheme. The subsequent resale was not considered to be state aid as according to the German and Dutch hydrogen strategies a market for hydrogen products should have evolved when the second resale tenders start.

Preparing the first resale tender: new HSA template published

In preparation for its first resale tender of the hydrogen amounts purchased in the first purchase tender round, Hintco is currently developing its standard for a Hydrogen Sales Agreement ("HSA"). In January 2025, it has put the latest version up for stakeholder feedback.

The HSA will govern the terms between Hintco and the off-takers of hydrogen products. It is split into a Framework Agreement and, attached to this as an annex, a template for an Individual Agreement.

Both the Framework Agreement and the Individual Agreement are envisaged to be standardized contracts subject to German law that, going forward, will not be negotiated on a case-by case basis between Hintco and HSA Customers.

Hintco will enter into the Framework Agreements with any HSA Customer meeting the (yet to be established) minimum qualification criteria, for an indefinite term. The actual sale of the hydrogen products will follow an auction process, in which the hydrogen product type, the amount to be delivered and its price will be determined and agreed in the shorter-term Individual Agreements. New Individual Agreements are issued before each resale auction, and bidders submit bids based on these agreements under the existing Framework Agreement.

Hintco acts only as an intermediary which is reflected in the HSA terms which includes:  

• the HSA Customer providing an advance payment a short time after submitting its bid; 
• a service fee payable by HSA Customer to Hintco for its intermediary services and operating costs calculated per Batch of Product. 

As the first import auctions have only been successful regarding the ammonia import lot, the latest draft Individual Agreement only covers ammonia as well. Hintco points out that the Framework may in the future be amended as Hintco’s portfolio of products and agreements will evolve over time. For example, while under the first tender round, the resale tenders will cover a delivery period of one year only, for the second tender round resale tenders with deliveries covering up to five years are envisaged.

What’s next?

Based on the feedback gathered Hintco will now update the contract documents and proceed to the formal bidding phase:

Second round of import tenders: the second round of import tenders is expected to enter the application phase in the coming weeks. Since no documentation on the Dutch/German global lot has been released yet, this will likely occur at a later time. Hintco will then enter into the negotiation phase with selected bidders and prepare the final HPA based on these negotiations. From the date of release of final procurement documents, bidders will have at least eight weeks of preparation time before the final bid submission deadline. Hintco currently anticipates final bids to be received by March 2026. 

HintCo recommends potential bidders to form consortia, to begin making cost assessments in due time and also to coordinate early with committees to be able to place unconditional bids in the final bidding stage.

Resale tenders: The first HSA auction is expected to take place in 2026, i.e. 12 months before the first delivery of product, which is expected in 2027 under the HPA with Fertiglobe.