The term “H2Global” refers to the overarching concept behind the H2Global mechanism. Its primary goal is to support the development of green markets and mobilize both private and concessional capital for the clean energy transition.

At the heart of this approach is Hintco, the Hydrogen Intermediary Company, which is the trading entity that develops and implements the H2Global double-auction mechanism.

To allow Hintco to be set-up in independence from both government and industry, the non-profit H2Global Foundation was established in 2021. Hintco operates as a wholly owned subsidiary of the Foundation, but conducts the auctions independently.

The H2Global Foundation itself is dedicated to advancing climate protection by conducting research, organizing working groups, and advancing and promoting the H2Global mechanism through outreach activities.

No. Hintco is a global Green Market Maker, established independently from both governments and industry. Nevertheless, the German government has been the first and largest supporter of the H2Global mechanism to date. It was the first to provide funding to Hintco to cover the cost difference, playing a pivotal role in bringing the mechanism to life.

Other governments, both within and beyond Europe - such as the Netherlands, Australia, and Canada - have already committed or are planning to commit funds for dedicated H2Global tenders. Additionally, many countries are engaging with H2Global at various stages, from concrete implementation efforts and formal MoUs to collaborative knowledge-sharing initiatives, illustrating the instrument's growing global relevance and adoption.

The provider of the funds determines the conditions under which Hintco receives financial support to offset the expected cost difference arising from its trading activities. These conditions are outlined in a grant agreement, specifying key parameters such as the hydrogen's "color" classification (or other criteria for defining clean hydrogen), the geographic focus, and any potential additional requirements.

The H2Global mechanism, along with Hintco, is designed to be highly flexible and adaptable - remaining "color-agnostic" in its approach. However, all terms and conditions must align with H2Global’s overarching commitment to promoting environmental and social sustainability while contributing to global climate action.

No, but there are similarities. A contract for difference (CfD) is a subsidy model where both positive and negative deviations from a fixed reference price are settled with the contractual partner. This approach is well-established in electricity markets. However, in the early, still-developing hydrogen market, reliable reference prices have yet to emerge, requiring a different approach.

Hintco, acting as a trader and intermediary, generates price signals through its double-auction mechanism. This allows governments, as funding providers, to use a similarly effective and cost-efficient tool as traditional CfDs to offset the cost difference. Additionally to revealing valuable pricing signals, Hintco’s innovative double-auction model facilitates tenure and volume transformation, enhancing market liquidity and providing a bankable counterpart for long-term offtake agreements.

As a global Green Market Maker, Hintco plays a critical role in supporting market development. Moreover, the price data published by Hintco is expected to establish tangible reference prices, which could, in turn, support the implementation of future mechanisms like CfDs.

No, the H2Global instrument is not limited to imports; it can also be applied to hydrogen production and offtake within Europe. Although the H2Global pilot tender was restricted to imports from outside the EU due to the specific programming of funds provided by the German government, the current joint H2Global tender, supported by Germany and the Netherlands, includes production within Europe as well.

In bilateral H2Global initiatives between Germany and countries like Canada and Australia, the offtake is planned to occur in Germany, while both exporting and importing governments contribute funds to cover Hintco’s expected cost difference.

Additionally, several governments outside the EU are exploring the possibility of using the H2Global instrument independently, without direct European involvement, to support their own hydrogen market development efforts.

No, the H2Global instrument is highly flexible and can, in principle, be applied to various products, technologies or commodity, in any region.

Its implementation depends on the terms and conditions set by the respective funding body - provided these conditions align with H2Global’s core commitment to promoting environmental and social sustainability and supporting climate action.

In its current application, the H2Global mechanism uses a double-auction approach, with Hintco tendering long-term purchase contracts (Hydrogen Purchase Agreements, HPAs) on the supply side and short-term sales contracts (Hydrogen Sales Agreements, HSAs) on the demand side. Given the hydrogen market's early-stage development, purchase prices are initially expected to be significantly higher than sales prices. This anticipated gap, referred to as the cost of difference between Hintco’s purchase costs and its demand-side revenues, is covered by a public subsidy.

By combining long-term supply contracts with short-term demand contracts, the mechanism provides continuous price signals, enhances market liquidity, and helps establish the foundation for a well-functioning clean hydrogen market.

Once the tender criteria have been defined by the funding provider, Hintco procures the products through individual tender processes, known as lots.

A single tender can consist of multiple lots, each with its own set of rules and specifications tailored to the characteristics of the product being purchased.

Short-term contracts on the demand side play a key role in ensuring the efficient use of concessional (governmental) funding, while fostering price transparency and market liquidity. For this reason, many lots in the current H2Global auctions will feature one-year Hydrogen Sales Agreements (HSAs). These short-term agreements are essential to establish H2Global reference prices and indexes, laying the groundwork for a more mature hydrogen market.

At the same time, some off-takers, particularly in certain sectors, may require volume security over a longer horizon but struggle with fixed-price exposures. To address these needs, the H2Global mechanism is exploring models that allow Hintco to enter into longer-term sales agreements by adding additional layers to the existing structure. Detailed concepts for such models are already being developed and foreseen for upcoming tender designs.

Hintco enhances the bankability of projects by providing long-term price, market, and legal security. The long-term hydrogen purchase agreements (HPAs) enable predictable cash flows, an important pre-requisite to secure on- and off-balance sheet funding.

As a reliable contractual partner, Hintco is backed by a government grant decision, prominently referenced in both German and European hydrogen strategies. This backing provides producers with financial certainty.

As the trader and physical intermediary, Hintco is the sole recipient of public funds allocated within this support scheme. These funds are drawn by Hintco based on the actual cost-of-difference incurred, which may vary across HSA auctions due to fluctuations in the demand-price curve.

Importantly, in the current setup, funds are not provided to Hintco upfront. Instead, they are disbursed upon request when a price difference arises between the long-term, fixed purchase price Hintco pays to suppliers (under the HPA) and the short-term sales prices determined through demand-side (HSA) auctions.

The process works as follows:

1. The HSA customer (offtaker) pays Hintco in advance of the delivery date.
2. The producer delivers the product.
3. Hintco draws the necessary funds from the fund provider under the grant agreement to cover any negative spread between the purchase and sales price (if applicable).
4. Hintco pays the producer within the agreed payment terms.

The price signals generated through H2Global tenders encompass several key components, including the product price, transportation costs, and applicable export and import duties. This comprehensive pricing structure ensures that all significant costs related to the delivery and handling of hydrogen products are taken into account.

The prices emerging from HPA auctions provide valuable initial insights into the market, helping to establish a baseline for understanding product pricing and associated costs.

Meanwhile, the price signals from HSA auctions are particularly useful, as they are updated annually, offering more frequent and regular insights. These signals play a crucial role in tracking ongoing market trends and providing a clearer understanding of the hydrogen market’s evolving dynamics.

Moreover, the price data published by Hintco is expected to establish tangible reference prices, which could, in turn, support the implementation of future mechanisms like CfDs.

The H2Global instrument is designed to be highly flexible, replicable, and scalable. Governments worldwide are actively engaging with H2Global to explore potential new tenders.

Several models are currently being developed, including:

• Joint Import Tenders: Two or more countries provide funding with the goal of each receiving a share of the final product. A notable example is the ongoing joint tender between the Netherlands and Germany.
• Bilateral Trade Tenders: Two countries collaborate to promote trade between a hydrogen-producing nation and a hydrogen-importing nation by jointly providing funding.
• Extended Sales Models: New models are being explored to enable Hintco to enter into longer-term sales agreements by adding additional layers to the existing structure. Detailed concepts for these models are already under development and are expected to feature in upcoming tender designs. However, short-term contracts on the demand side play a key role in ensuring the efficient use of concessional (governmental) funding, while fostering price transparency and market liquidity. For this reason, most lots in the current and near-term H2Global auctions will feature one-year Hydrogen Sales Agreements (HSAs). These short-term agreements are essential to establish H2Global reference prices and indexes, laying the groundwork for a more mature hydrogen market.

The H2Global instrument can be applied to any clean product, in any region, under conditions set by the respective funding provider - as long as these conditions align with H2Global’s core commitment to environmental and social sustainability and its mission to combat climate change.

The H2Global auctions are divided into supply-side (HPA) and demand-side (HSA) auctions.

HPA auctions:

In principle, all companies or consortia that produce renewable hydrogen or derivatives such as renewable ammonia and methanol can participate in the supply-side auctions targeting these products.

The concrete eligibility criteria can differ between the various H2Global tenders and individual lots and will always be clearly outlined in the respective calls and tender documents.

If you are a producer of renewable hydrogen or derivatives, you can participate in the HPA auction in one of the ongoing or upcomiong tenders. For details, please check the HPA tender section.

HSA auctions:

For the H2Global pilot and second tender, companies intending to purchase renewable hydrogen or derivatives can participate in the demand side (HSA) auctions.

The HSA auctions for offtakers of renewable hydrogen or derivatives are scheduled to take place 12 months before the delivery of the first quantities of product auctioned in the respective HPA auction.

For more details, please check the HSA tender section.

From a budgetary and state aid perspective, state funds must be used efficiently. This means that no projects may be subsidised if an investment decision (FID) has already been made. Necessary preparatory work (i.e. detailed technical and economic planning, discussions with financial institutions or other customers, etc.) is permitted and encouraged.

HSA auction are scheduled to ocurr 12 months before the delivery of the first quantities of product auctioned in the respective HPA auction.

Approximately one year before the first HSA auction, interested bidders have to sign framework HSA contracts with Hintco - a pre-requisite for participating in the HSA auction. After the HSA auction, the awarded bidder(s) will enter into an individual HSA with Hintco.

Find out more in the HSA tender section.