German utility E.ON and Austrialian green hydrogen start-up Fortescue Future Industries (FFI) plan to deliver up to five million tonnes of renewable H2 per year to Europe by 2030, equal to about a third of the calorific energy Germany imports from Russia.

FFI chairman Andrew Forrest and E.ON chief operating officer Patrick Lammers signed a memorandum of understanding (MoU) on the massive hydrogen import plan in Berlin, which follows up on a hydrogen accord between Germany and Australia signed last year.

“The announcement of this historic partnership today aims to diversify the future energy security in Europe,” Forrest said during the signing ceremony on Tuesday.

“Green energy will reduce fossil fuel consumption dramatically in Germany and quickly help substitute Russian energy supply, while creating a massive new employment intensity industry in Australia.”

Early gas warning

The importance of the deal was further highlighted today, when German economics and climate minister Robert Habeck declared an early warning level in the country’s gas emergency plan, meaning Europe’s largest economy is preparing for a possible stop of Russian gas flows. The step came in the wake of the Russia’s demand to only accept payments for gas in roubles, following western sanctions against its invasion of Ukraine.

As the G7 and the EU have rejected the payments in roubles, Germany warns of a possible further escalation and a crisis team is monitoring the situation. If Russian President Vladimir Putin were to turn off the gas tap to Europe, Germany may be forced to restrict the gas supply to key industries (in order to keep gas flowing for heating), which could trigger a severe recession in Europe.

While large-scale imports of green hydrogen wouldn’t be able to remedy an immediate stop of fossil gas flows, they could substitute Russian gas in the medium term while also helping the climate.

"The race for large scale production and transportation of green hydrogen has taken off. The agreement between E.ON and FFI is a major step forward and puts them in a pole position for the delivery of green hydrogen to German industry,” Habeck said.

Under the agreement, E.ON and FFI have committed to a research and study partnership, with further detailed documentation and steps required related to supply.

Ramping up green hydrogen deliveries to five million tonnes per year will help decarbonise thousands of medium-sized companies in Germany and the Netherlands, where E.ON also distributes energy.

“Two major international companies are joining forces to build a ‘hydrogen bridge’ from Australia to Germany and the Netherlands, based on shared values and the joint capability of realising the scale of such a project,” E.ON chief executive Leo Birnbaum said.

Importing hydrogen to Europe from Australia would be an expensive option, according to a study released yesterday by the International Renewable Energy Agency, which showed that transporting H2 via pipeline from North Africa or the Middle East would make more economic sense. It did concede, however, that diplomatic relationships and geopolitical considerations could play a role in such decisions.

FFI is fully owned by Australian mining giant Fortescue Metals Group. The company’s owner, billionaire Forrest, aims to make his new company a world leader in renewable hydrogen production — with 15 million tonnes by 2030 — and other green technologies.

The company earlier this month attracted the deputy governor of Australia’s central bank, Guy Debelle, to join FFI as chief financial officer, in what is seen as something of a coup for Forrest.