Green hydrogen dominates North Africa’s 2030 targets, report finds

From the newsletter

The production of green hydrogen is poised to dominate the 2030 hydrogen targets set by North African nations, according to a report published by Dii Desert Energy, a Dubai-based international think tank promoting clean energy transition in the MENA region.

• The report indicates that the North African region is set to produce 3 million tonnes per annum (mtpa) of hydrogen by 2030, the majority of which will be green hydrogen. This projected capacity is distributed among four leading hydrogen-producing countries: Egypt (1.5 mtpa), Mauritania (1.2 mtpa), Morocco (0.4 mtpa), and Tunisia (0.32 mtpa).

• These targets are supported by several green hydrogen projects in the region. Egypt has announced 29 green hydrogen projects, driven by MoUs signed during COP27 in Sharm El Sheikh in 2022. Morocco, considered Africa’s gateway to Europe, has 15 projects, and Mauritania has 7. Emerging producers like Tunisia and Algeria have announced 13 and 3 projects respectively.

More details

• Having launched its National Hydrogen Strategy in 2023, Algeria is targeting a production capacity of 1.2 mtpa by 2040, of which 30 TWh (0.9 Mtpa) are expected to be exported. On its part, the Tunisian government has set aside the H2 Notos  project for exclusively transporting green hydrogen to Europe through the SoutH2 Corridor, a 3,300 km pipeline starting from Algeria and reaching Germany through Tunisia, the Mediterranean Sea, Italy, and Austria. 

• The 27-page report highlights several projects with significant electrolyser capacities crucial for achieving the 2030 green hydrogen targets. Notable projects include Morocco’s Green Capital Green Hydrogen Project and the White Dunes Green Hydrogen Project, each with an 8 GW electrolyzer capacity. Other significant projects are Egypt's Total Eren Enara project (5 GW), Globeleq Green Hydrogen Complex (4 GW), and Fortescue Green Hydrogen project (3 GW).

• Regarding the progress of the green hydrogen sector in North Africa, the report notes that since the first green hydrogen project was announced in 2018, progress has slowed due to various challenges that have caused a delay in Final Investment Decisions (FID). The highlighted challenges include lack of committed offtakes, regulatory uncertainties, and lack of carbon dioxide price, which fails to incentivise transition to low carbon alternatives. 

• The report observes a significant shift from focusing primarily on green hydrogen for export to recognising its value for local use. Additionally, countries are investing in green hydrogen derivatives, such as green ammonia, as a means of economic and energy diversification.

• On the future outlook of the green hydrogen sector in the region, the report acknowledges that US withdrawal from the Paris Agreement may impact the industry. However, it projects that the EU and China will provide a cushion. Also, with green hydrogen being a key cornerstone of the green energy transition and the North Africa region having vast renewable resources, the report projects that governments will offer incentives to attract investors and bridge the funding gaps that exist.

Our take

• It is time for North African countries to shift their focus from the number of green hydrogen projects to their progress. Instead of initiating numerous projects that eventually slow down due to challenges, governments should pause and concentrate on creating regulations and policies to facilitate Final Investment Decisions (FID).

• North Africa has massive potential for green hydrogen production, yet it is struggling with slow progress in the sector, mainly due to regulatory challenges. The involved countries should strive to develop a universal framework to guide their green energy sector development. Such a framework would be key in streamlining regulations and advancing their interests.

• The increasing emphasis on domestic green hydrogen utilization in North African countries is a commendable shift that balances the economic advantages of export with the need for local clean energy transition, energy security, and stimulation of the local economy. Ultimately, the countries are not left behind in attaining the global clean energy goals.