Morocco expands green hydrogen ambitions with six new projects

From the newsletter

The North African nation of Morocco is accelerating its clean energy ambitions with the approval of six new green hydrogen projects worth $32.5 billion. Spread across three southern regions, the projects will produce green hydrogen that will be used to manufacture green steel, green ammonia and synthetic fuels.

• Morocco’s focus on green hydrogen derivatives is a strategic move to capture high-value markets. These products align with global decarbonisation goals and offer faster revenue returns than raw hydrogen exports.

• With at least 13 announced projects, Morocco trails only Egypt (15) in Africa’s hydrogen race. However, by prioritising industrial fuels and materials, Morocco gains a competitive edge, especially as industries seek low-carbon inputs to meet tightening emission regulations, like the EU’s carbon border tax.

More details

• Five investment consortiums, combining local and international companies, will lead the development of the six new green hydrogen projects in the Sahara Desert nation. The ORNX consortium comprising the United States' Ortus, Spain's Acciona, and Germany's Nordex  will focus on producing green ammonia. Similarly, an Emirati consortium, including UAE's Taqa and Spain's Cepsa, will produce green ammonia alongside industrial fuel. 

• Moroccan company Nareva is set to diversify production with ammonia, synthetic fuel, and green steel, while Saudi Arabia's ACWA Power will concentrate on green ammonia. Meanwhile, Chinese firms UEG and China Three Gorges will also contribute to green ammonia production.

• The projects were approved on March 6 in Rabat during a meeting between Prime Minister Aziz Akhannouch and the steering committee of the Morocco Offer, a strategic initiative that aims to position the Maghreb kingdom as a global leader in the green hydrogen market. The next steps include investor negotiations and signing of agreements.

• The Moroccan government will allocate 30,000 hectares of land to each project, in line with the Morocco Offer, which has set aside 1 million hectares for green hydrogen development, with 300,000 hectares allocated in the initial phase.

• The new projects bring Morocco’s total announced green hydrogen initiatives to at least 13, the second highest in Africa after Egypt, which has at least 15. The growth aligns with Morocco’s ambitious hydrogen roadmap, targeting a demand of 30 TWh by 2030 and 307 TWh by 2050.

• Morocco’s focus on green hydrogen derivatives including green ammonia, synthetic fuels and green steel is a strategic move to capture high-value markets and align with global decarbonisation trends. A report by the Institute for Energy Economics and Financial Analysis suggests that demand for these derivatives will rise as industries worldwide seek cleaner alternatives for hard-to-abate sectors.

• Green ammonia is a critical component for low-carbon fertilisers and a promising energy carrier for long-distance transport. The global green ammonia market is projected to reach $6.5 billion by 2031, and Morocco’s proximity to European markets makes it a natural supplier. This positions Morocco to meet the evolving needs of the maritime sector as shipping lines transition to cleaner fuels.

• Synthetic fuels present another growth opportunity, especially for hard-to-electrify sectors like aviation and heavy transport. As countries intensify efforts to cut emissions, sustainable fuels will become essential to meeting net-zero targets. By investing in synthetic fuel production, Morocco could establish itself as a pivotal supplier for global transport markets seeking immediate, scalable solutions.

• The decision to produce green steel is equally significant. Steel production is the planet's largest-emitting manufacturing sector, responsible for around 7% of greenhouse gas emissions. Green hydrogen offers a viable path to drastically cut emissions, and producing green steel domestically could support Morocco’s construction and manufacturing sectors. It also positions the country as a competitive exporter to regions like the EU, where strict carbon border taxes should drive demand for low-emission materials.

• Investing in hydrogen infrastructure, such as pipelines and storage, is capital-intensive and slow to develop. By focusing on producing derivatives with immediate market value, like green ammonia or methanol, Morocco can generate early revenue, reinvest in infrastructure, and gradually scale up production capacity. This strategy is particularly relevant in Africa, where only 1% of green hydrogen projects have reached final investment decision or construction. By delivering ready-to-use green commodities, Morocco could break this cycle and attract sustained investor interest.

• While several African countries including Egypt, South Africa, Mauritania, Namibia, Kenya and Algeria are exploring green ammonia production, none have yet ventured into green steel or synthetic fuels. This gives Morocco a distinct competitive advantage, enabling the country to build a diverse green industrial base and lead the continent’s hydrogen economy.

Our take

• Morocco is wisely hedging its bets with derivatives. By prioritising products like green ammonia, synthetic fuels and green steel, the country avoids the pitfalls of relying solely on raw green hydrogen exports. Such an approach enables the country to capture immediate market demand, generate faster returns, and gradually build out infrastructure, a pragmatic strategy for long-term success.

• Morocco’s decision to produce green steel and synthetic fuels sets it apart from other African countries. If executed well, the country could evolve into not just a hydrogen producer but a green industrial hub for the entire continent. This positioning could make the country a critical supplier to the EU and other regions, especially as industries face mounting pressure to decarbonise and navigate tightening carbon regulations.

• Morocco’s model offers a blueprint for other African nations. Instead of waiting for hydrogen export infrastructure to materialise, countries could accelerate revenue by focusing on high-value derivatives. For regions with abundant renewable resources, this strategy could fast-track economic development, attract investors and position Africa as a global leader in sustainable industry.