Egypt aims to capture 5-8% of global hydrogen market

From the newsletter

The Egyptian government aims to capture 5–8% of the global green hydrogen market by 2040, according to Karim Badawi, the Minister of Petroleum and Mineral Resources. Speaking at the Egypt Energy Show 2025, Badawi reaffirmed the country’s commitment to becoming a global green hydrogen hub, by leveraging its renewable resources and strategic location.

• This vision aligns with the country’s National Low-Carbon Hydrogen Strategy, whose "green scenario" targets a maximum of 8% of the global hydrogen market, equating to 5.6 million tonnes per annum (mtpa) in exports out of a total projected production of 9.2 mtpa by 2040.

• Currently, Egypt leads Africa with 29 announced green hydrogen projects, positioning itself as a regional frontrunner. This ambition places the country well ahead of its peers, many of which are still navigating the feasibility stages of development. Even South Africa, a regional heavyweight, lags behind Egypt in terms of project volume and advancement.

More details

• Minister Badawi also highlighted Egypt’s goal to boost renewable energy to 42% by 2030 and 65% by 2040 as part of its energy security strategy. He estimated that achieving these targets would require generating over 65 gigawatts from wind, solar, pumped storage, hydroelectric, and nuclear power.

• The Minister outlined several incentives introduced by the Egyptian government to create an enabling environment for green hydrogen investors. These include removing obstacles to ensure timely capacity additions and grid connections, as well as allocating 42,000 square kilometers of land for renewable energy projects.

• Egypt’s ambitious hydrogen goals are backed by strategic partnerships with global energy giants and development banks. The country has secured deals with firms like UAE’s ACWA Power, Norway’s Scatec ASA, Australia’s Fortescue Future Industries Denmark’s Maersk, alongside funding opportunities from the European Bank for Reconstruction and Development (EBRD) and other multilateral institutions.

• These alliances are essential, given the colossal infrastructure requirements for large-scale green hydrogen production and export. With proximity to Europe, access to global maritime routes via the Suez Canal, and established port infrastructure, Egypt holds a significant logistical advantage — but sustaining these partnerships and securing continuous investment will be critical for long-term success.

• One of the biggest questions is whether the Nile nation can generate enough renewable energy to power its hydrogen ambitions. Green hydrogen requires vast amounts of electricity from renewable sources, and while Egypt has made impressive strides with solar and wind projects — including the Benban Solar Park — its current 4.6 GW of installed renewable capacity falls drastically short of the 114 GW needed by 2040.

• Water scarcity presents another challenge. Green hydrogen production is water-intensive, and the UN predicts that Egypt could face severe water shortages by 2025. The country’s main source of fresh water is the Nile, whose availability has been complicated by geopolitical factors — particularly Ethiopia’s Grand Ethiopian Renaissance Dam. These pressures, combined with population growth and climate change, make water desalination a likely necessity. Yet desalination is costly and environmentally problematic, as it produces brine that can damage marine ecosystems.

• While global interest in hydrogen has cooled somewhat amid rising costs and technological hurdles, Egypt is doubling down on green hydrogen as a cornerstone of its energy strategy. In February 2024, the country signed $41 billion worth of agreements for green hydrogen projects in the Suez Canal Economic Zone. This aligns with Egypt’s broader aim to diversify its energy exports, future-proof its economy, and attract long-term foreign investment.

• However, the scale of Egypt’s ambitions brings serious risks. A failure to deliver on promised infrastructure, policy support, or project timelines could damage investor confidence and set the industry back. Overextending without clear, incremental wins could strain public resources and lead to half-finished projects — a scenario that would harm not just the hydrogen sector but Egypt’s broader reputation as an energy innovator.

• To turn vision into reality, the Egyptian government will need to over-deliver on policy support. That means not only providing incentives for renewable energy development but also establishing regulatory frameworks, building out export infrastructure, and streamlining project approvals. If Cairo can align public and private sector efforts effectively, its lofty targets might just become a reality.

Our take

• Egypt’s strategic location, established port infrastructure, and abundant renewable resources provide a strong competitive edge. However, success will depend on accelerating project implementation, securing water resources through desalination, and scaling renewable capacity faster than current projections.

• Despite boasting the highest number of announced green hydrogen projects in Africa, Egypt faces the largest gap between commitments and tangible progress, according to a report by Dii Desert Energy. While the pipeline is ambitious, few initiatives have reached significant development milestones, warranting skepticism.

• To achieve its 8% global green hydrogen export target, Egypt will need 114 GW of installed renewable capacity, 76 GW of electrolyser capacity, and $34 billion in electrolyser investments. Currently, the country has just 4.6 GW of renewable capacity, with plans to add 45 GW by 2030, leaving a 26.4 GW shortfall with only a decade to close the gap. Even if all 29 announced projects materialise, hydrogen output would only reach 1.5–3.2 mtpa by 2030, falling about 6 mtpa short of the 2040 goal. Bridging these gaps within ten years is theoretically possible, but the current pace of development makes the timeline highly ambitious and feasibility uncertain.