Delivered costs, EU rules and firm offtake will decide whether the Saudi-Germany ammonia corridor becomes a real market
The Yanbu–Rostock agreement to establish a green ammonia supply corridor from Saudi Arabia to Germany sits alongside a growing set of Middle East–Europe hydrogen partnerships.
In February 2025, Acwa and Germany’s Securing Energy for Europe (SEFE) set a target to deliver 200,000 tonnes of green hydrogen a year to Europe by 2030, with SEFE positioned as co-investor and main offtaker.
A year earlier, Oman’s Hydrom and Germany’s Verbundnetz Gas (VNG)) signed an MoU to explore a similar supply chain from the sultanate. Last July, Acwa and Energie Baden-Wurttemberg (EnBW) agreed to develop the first phase of the Yanbu Green Hydrogen Hub.
What remains less clear is how quickly these frameworks can turn into financed projects. At Yanbu, the first phase is still moving through the front-end engineering design phase but final investment decisions will depend on firm offtake and pricing arrangements that are not yet public.
Hydrom’s projects are still largely in early development, and the cancellation of two awarded schemes in December highlighted the commercial hurdles facing Oman’s wider hydrogen pipeline. To date, the Oman and Saudi corridors announced with VNG and SEFE are still structured as memorandums rather than binding purchase agreements.
The basic economics explain the caution. Green ammonia from the Middle East must cover renewable power, electrolysis, desalination, conversion, shipping and then cracking back to hydrogen in Europe.
While a few European ports already handle ammonia for the fertiliser industry, large-scale reconversion to hydrogen would require new crackers and connections to national hydrogen pipelines. Each step adds cost, and it is still difficult to judge how the delivered price would compare with hydrogen produced inside Europe.
Risk is the next question. Saudi developers are likely to need long-term offtake commitments to secure lenders and award EPC packages. German buyers face uncertain demand for potential industrial users while EU rules on what qualifies as renewable hydrogen are still being finalised, and may hesitate to lock in volumes at fixed prices. Even with SEFE expected to act as offtaker, the way price and volume risk will be shared is still unclear.
On the positive front, the Neom Green Hydrogen project in Saudi Arabia, which reached financial close with long-term offtake in 2023, shows that large-scale green ammonia projects in the region can be financed. Additionally, on the demand side, Germany is turning to state-backed contracts to make imports workable.
Despite this, the corridor will begin to feel like a market only when the Yanbu route itself secures binding volumes and prices.
