Fertiglobe has been named the winning bidder for a contract value of up to €397 million to supply renewable ammonia out of Egypt into Rotterdam as part of the H2Global pilot auction with the ammonia having a delivered price of €1,000 per ton until 2033 (GM July 12, p. 27).
Recent analysis done by BloombergNEF using the Green Markets Western Europe Carbon Adjusted Ammonia Price has shown that the price being paid to Fertiglobe and the average green ammonia price received in the auction are both more than double the current price for gray ammonia in the region.
The auction also revealed that €811/mt of the €1,000/mt of green ammonia price is the production price in Ain Sokhna, Egypt, while the remainder represents costs associated with transport, logistics, and import duties into Rotterdam. H2Global, through the intermediary Hintco, will bridge the gap between the supply price and demand price with funding from the German Government.
The difference between the Western Europe Carbon Adjusted Ammonia Price and the €1,000/mt contracted price to Fertiglobe suggests that H2Global could subsidize up to €535/mt of green ammonia, although it could be less if end users are willing to pay a premium for green ammonia over gray ammonia.