Policy Recommendations for Vietnam to Participate in the H2Global Auction Mechanism

Date: August 2, 2026

By Annie Nguyễn

1. Context and Strategic Opportunity

Vietnam is facing a very good opportunity to participate in the global green hydrogen market through the H2Global auction mechanism. With its coastal geography, abundant wind and solar resources, and Net Zero 2050 commitment, Vietnam can become Southeast Asia's green hydrogen production and export hub.

2026 is the golden moment to act: Germany and the Netherlands have opened the Asian regional auction under H2Global, India has signed a bilateral agreement with Germany, and other countries like Oman are negotiating participation. If Vietnam delays, its supplier position will be taken by direct competitors like India and Middle Eastern countries.

2. The H2Global Mechanism: A Double-Sided Auction to Bridge the Price Gap

H2Global is a double-sided auction mechanism initiated by the German government, with the Netherlands and other countries participating. Its goal is to connect low-cost green hydrogen producers outside Europe with buyers in Europe, while solving a key dilemma: producers need long-term contracts to raise capital, while buyers want flexible short-term contracts.

How It Works

The H2Global mechanism operates through an intermediary – the company Hintco (owned by the H2Global Foundation) – to execute transactions. Specifically:

Step 1: Long-term Purchase Auction (HPA - Hydrogen Purchase Agreement)

• Hintco holds competitive bidding to sign 10-year long-term purchase contracts with hydrogen and derivatives (ammonia, methanol, e-fuels) producers from around the world.

• The purchase price is fixed for 10 years, providing revenue certainty to enable producers to raise capital and implement projects.

Step 2: Short-term Sales Auction (HSA - Hydrogen Sales Agreement)

• Hintco holds competitive bidding to sell the purchased hydrogen through 1-year short-term contracts to buyers in Europe (steel, chemicals, transport companies, etc.).

• The sale price is determined through competitive bidding, reflecting buyers' actual willingness to pay.

Step 3: Price Gap Compensation

• Since green hydrogen is more expensive than fossil fuels, the long-term purchase price (HPA) is typically higher than the short-term sale price (HSA).

• The government (or other funders) pays the difference to Hintco, acting as a subsidy to bridge the price gap.

• These funds are only disbursed after actual delivery, ensuring efficient use of public money.

Key Differences from Conventional Mechanisms

Feature	Conventional Mechanism	H2Global
Purchase contracts	Producer and buyer sign directly	Intermediary (Hintco) signs with both
Contract duration	Producers want long-term, buyers want short-term → mismatch	Solved with 10-year buy and 1-year sell contracts
Price risk	Producers bear price volatility risk	Intermediary bears risk, compensated by government
Price transparency	Lack of market price information	Double-sided competitive bidding creates clear price signals

Scale and Initial Success

• First auction round (2024): €397 million contract for Fertiglobe (Egypt) to supply 19,500 tons of renewable ammonia/year.

• Second auction round (2025): Total budget of €3 billion, co-financed by Germany and the Netherlands, with 5 regional lots (Africa, Asia, North America, South America & Oceania) and one global lot.

3. Lessons from Pioneer Countries

3.1. Oman: A Step-by-Step Approach

Oman has signed an MoU with the H2Global Foundation to study the applicability of the auction mechanism, aiming to "build a robust legal framework and an investment-ready hydrogen market through joint studies, modelling, and knowledge exchange." Hydrom, Oman's national hydrogen coordination body, serves as the single point of contact for negotiating with H2Global.

Lesson for Vietnam: A national focal point (such as a National Hydrogen Committee or equivalent) is needed to negotiate with the H2Global Foundation and coordinate domestic stakeholders.

3.2. India: Bilateral Auctions

India and Germany have agreed to conduct a joint H2Global green hydrogen derivatives auction, with similar agreements expected to be signed with the Netherlands and Japan. SECI (Solar Energy Corporation of India) serves as the lead agency, with experience from renewable energy auction programs.

Lesson for Vietnam: Vietnam can start with bilateral auctions with Germany or Japan through existing strategic partners like PV GAS or state-owned energy corporations, before participating in regional or global auctions.

4. Specific Policy Recommendations

4.1. Building the Legal and Institutional Framework

Recommendation	Specific Actions
Establish a national focal point	Assign MOIT or an inter-ministerial committee (MOIT, MOF, MPI) as the focal point for negotiations with the H2Global Foundation.
Approve "Green Hydrogen" standards	Complete certification and traceability systems for green hydrogen, meeting international standards such as EU RFNBO, CertifHy.
Implement clear carbon pricing	Create stable price signals for green hydrogen to compete with fossil fuels.

4.2. Creating Financial Support Mechanisms

Recommendation	Specific Actions
Establish a price gap compensation fund	Mobilize funds from state budget, ODA, JETP, and international climate funds to bridge the gap between purchase and sale prices under H2Global.
Tax and credit incentives	Provide import tax exemptions for electrolyser equipment, corporate income tax incentives for green hydrogen projects participating in H2Global auctions.
Credit guarantee support	Provide guarantees for project investment loans to reduce investor risk.

4.3. Developing Infrastructure and Production Capacity

Recommendation	Specific Actions
Identify priority zones	Develop "H2 hubs" in areas with renewable potential and major ports such as Vung Tau, Central Vietnam, and the Central Highlands.
Invest in transport and storage infrastructure	Develop port and storage systems for ammonia and hydrogen to serve exports.
Pilot electrolysis technologies	Apply "regulatory sandbox" mechanisms to test new technologies and business models.

4.4. Roadmap for H2Global Participation

Phase 1 (2026-2027): Negotiation and Preparation

• Sign MoU with H2Global Foundation.

• Identify national focal point.

• Finalize "Green Hydrogen" standards.

• Identify potential pilot projects (e.g., PVN projects, EVN projects, Vinacomin projects, etc.).

Phase 2 (2027-2028): Regional Auction Participation

• Participate in H2Global's Asian regional auction.

• Execute first long-term (10-year) purchase contracts.

• Build experience and reputation.

Phase 3 (2029-2030): Scale-Up

• Develop GW-scale projects.

• Participate in H2Global's global auction.

• Establish strategic partnerships with importing countries (Germany, Japan, Netherlands, South Korea).

5. Conclusion

H2Global is an opportunity for Vietnam to deeply integrate into the global hydrogen market, attract foreign investment, and affirm its position in the regional clean energy supply chain. However, this "window of opportunity" may close if Vietnam does not act now.

Three priority actions in the next 6 months:

1. Sign an MoU with the H2Global Foundation to formally begin the cooperation process.

2. Establish a National Hydrogen Committee to coordinate strategy and negotiations.

3. Identify 2-3 pilot projects ready to participate in H2Global auctions within 12-18 months.

Vietnam already has a national hydrogen strategy under Decision 165/QĐ-TTg. Now is the time to move from vision to concrete action, to avoid being left behind in the global hydrogen race.

H2Global Auction Mechanism: A Double-Sided Auction to Bridge the Price Gap

Overview

H2Global is a double-sided auction mechanism initiated by the German government, with the Netherlands and other countries participating. Its goal is to connect low-cost green hydrogen producers outside Europe with buyers in Europe, while solving a key dilemma: producers need long-term contracts to raise capital, while buyers want flexible short-term contracts.

How It Works

The H2Global mechanism operates through an intermediary – the company Hintco (owned by the H2Global Foundation) – to execute transactions. Specifically:

Step 1: Long-term Purchase Auction (HPA - Hydrogen Purchase Agreement)

• Hintco holds competitive bidding to sign 10-year long-term purchase contracts with hydrogen and derivatives (ammonia, methanol, e-fuels) producers from around the world.

• The purchase price is fixed for 10 years, providing revenue certainty to enable producers to raise capital and implement projects.

Step 2: Short-term Sales Auction (HSA - Hydrogen Sales Agreement)

• Hintco holds competitive bidding to sell the purchased hydrogen through 1-year short-term contracts to buyers in Europe (steel, chemicals, transport companies, etc.).

• The sale price is determined through competitive bidding, reflecting buyers' actual willingness to pay.

Step 3: Price Gap Compensation

• Since green hydrogen is more expensive than fossil fuels, the long-term purchase price (HPA) is typically higher than the short-term sale price (HSA).

• The government (or other funders) pays the difference to Hintco, acting as a subsidy to bridge the price gap.

• These funds are only disbursed after actual delivery, ensuring efficient use of public money.

Diagram

Producers (global) → [10-year HPA, fixed price] → Hintco (Intermediary) → [1-year HSA, auction price] → Buyers (Europe)
                                                                                           ↑
                                                                     Government bridges the price gap

Key Differences from Conventional Mechanisms

Feature	Conventional Mechanism	H2Global
Purchase contracts	Producer and buyer sign directly	Intermediary (Hintco) signs with both
Contract duration	Producers want long-term, buyers want short-term → mismatch	Solved with 10-year buy and 1-year sell contracts
Price risk	Producers bear price volatility risk	Intermediary bears risk, compensated by government
Price transparency	Lack of market price information	Double-sided competitive bidding creates clear price signals

Application in India-Germany Cooperation

The India-Germany agreement uses this exact mechanism:

• Indian producers participate in HPA auctions to supply green hydrogen derivatives (e.g., green methanol) to the European market.

• The German and Indian governments (along with partners like the Netherlands and Japan) provide funds to bridge the price gap.

• Long-term purchase contracts (10 years) give Indian producers stable revenue for plant investment, while European buyers retain flexibility with short-term contracts.

Scale and Initial Success

• First auction round (2024): €397 million contract for Fertiglobe (Egypt) to supply 19,500 tons of renewable ammonia/year.

• Second auction round (2025): Total budget of €3 billion, co-financed by Germany and the Netherlands, with 5 regional lots (Africa, Asia, North America, South America & Oceania) and one global lot.

• Germany-Australia bilateral auction: Germany and Australia are developing a bilateral auction window with each contributing €200 million to promote green hydrogen exports from Australia to Germany.

References

1. World Economic Forum. "Case Study Details - The Future of Clean Fuels - Double-sided auctions (H2Global)." 2025.

2. Vietnam News. "Việt Nam urged to accelerate hydrogen industry development: seminar." July 29, 2026.

3. Vietstock. "How to move forward with green hydrogen." August 25, 2025.

4. Vietnam.vn. "The Ministry of Industry and Trade is promoting the completion of the policy framework to create momentum for the development of the hydrogen industry." July 30, 2026.

5. Hintco. "How it works." 2025.

6. IEA. "H2 Global CfD auction for Hydrogen." August 19, 2025.

7. Hintco. "FAQ second H2Global tender." June 30, 2025.

8. Vietnam.vn. "Hydrogen energy needs a policy boost." July 29, 2026.

9. Vietnam Chamber of Commerce and Industry (VCCI). "Vietnam's Hydrogen Strategy: From Energy Vision to Action." November 13, 2025.