The promise and challenges of green hydrogen in North Africa
By NJ Ayuk
While much of our attention at the African Energy Chamber (AEC) concentrates on efforts to industrialize the sub-Saharan regions, as covered in our recently released 2025 Outlook Report, The State of African Energy, the more developed North African nations have seen recent progress in the renewables field, in green hydrogen specifically, that deserves our recognition.
Many are likely unfamiliar with the technology behind the production of this fuel source, and the subject requires at least a brief explanation.
Hydrogen has many uses across varied industries, from petroleum refining and food processing to fertilizer and steel production.
While the aerospace industry has used hydrogen as a rocket fuel since the dawn of the space age, there is plenty of room for the growth of hydrogen-powered cars, or fuel cell electric vehicles (FCEVs), in the automotive world. Though its implementation in electricity generation is minimal at present, hydrogen may see more widespread use as a supplementary or alternative fuel source in the future at standalone facilities and power plants currently running on natural gas.
Hydrogen production primarily uses electrolysis, a process in which an electric current passes through water to separate hydrogen from oxygen. Currently, about 95% of the electricity for global hydrogen production comes from natural gas and coal-fired power plants. By contrast, green hydrogen production utilizes electricity from renewable sources such as solar and wind instead. If the majority of hydrogen production facilities switched to renewable energy, the International Energy Agency (IEA) estimates this could reduce CO2 emissions by approximately 830 million tonnes annually.
As the world struggles with the urgent need to transition from fossil fuels to more sustainable energy sources, green hydrogen offers an avenue where production can continue with the same capacity but without harmful by-products, particularly in regions rich in renewable energy potential like North Africa. This region, characterized by vast, consistently sun-drenched deserts and strong winds, could potentially lead the way in developing a global green hydrogen economy. However, this transition is not without its complexities and challenges.
The Promise
As covered in our recently published 2025 Outlook Report, The State of African Energy, North Africa offers several compelling advantages, marking it as a prospective green hydrogen mega-producer.
North Africa already has the requisite abundant natural resources and developing infrastructure to support a massive expansion in green hydrogen production. The region boasts some of the highest solar irradiation levels globally, making it an ideal location for solar-powered hydrogen production. Countries like Morocco and Egypt have already initiated projects like the Noor Ouarzazate Solar Thermal Complex and the Benban Solar Complex, respectively, which could serve as the backbone for the industry. Additionally, the wind potential along the coasts of Algeria and Mauritania provides another renewable energy source for industrial-scale electrolysis.
For national economies critically dependent on oil and gas, green hydrogen offers a path to greater diversification. The transition would not only lessen the negative impacts of oil's inherent price fluctuations but also foster new industries. Green hydrogen production could lead to development in related sectors such as hydrogen fuel cells, ammonia production for fertilizers, and even green steel (steel produced using hydrogen as a reducing agent eliminating coal and CO2 emissions from the process) creating new jobs and stimulating economic growth.
A ramp-up in green hydrogen production would also have more than just local benefits as the endeavour aligns with global climate goals as well. By focusing on green hydrogen, North African countries could position themselves as leaders in the worldwide decarbonisation effort while opening up new export markets. The export of green hydrogen to Europe, which has set ambitious climate targets, could become a lucrative trade, further enhancing North Africa's geopolitical stature in the energy sector.
With the right infrastructure in place, like the kind proposed for the SoutH2 corridor linking North Africa, Italy, Austria, and Germany, producers could transport green hydrogen via pipelines or as easily shippable derivatives like ammonia or liquid organic hydrogen carriers (LOHCs), which would be particularly appealing to European markets seeking to decarbonise.
The Challenges
Despite the many bright prospects, a realistic assessment of the path to a green hydrogen economy in North Africa reveals it is not without its fair share of challenges.
Hydrogen production through electrolysis requires significant amounts of water, which is already scarce in many parts of North Africa. This fact essentially mandates solutions like seawater desalination or wastewater recycling, both of which add to the energy and financial burdens of any green hydrogen initiative.
The lack of existing infrastructure for hydrogen production, storage, and distribution is also a major hurdle. North Africa will need new pipelines, storage facilities, and ports capable of handling hydrogen and its derivatives, and the construction associated with these features will require substantial investment. Moreover, while adapting existing gas infrastructure to facilitate hydrogen transportation is a feasible venture, it presents additional technical and safety challenges due to hydrogen's volatile properties.
Another impediment to green hydrogen’s expansion is its overall economic viability. Currently, green hydrogen production costs remain higher than those of fossil fuels or even those of blue hydrogen (hydrogen produced using natural gas with carbon capture). Achieving economies of scale and technological advancements in electrolysers could reduce costs, but until then, green hydrogen will struggle to compete without subsidies or carbon pricing mechanisms.
Nations engaged in green hydrogen production will also have to create and clearly define their associated policies and regulations. This nascent stage of the technology’s development calls for robust policy frameworks if producers are to attract investment, ensure safety, and integrate hydrogen into their existing energy systems. North African nations need to develop clear strategies, not only for hydrogen production but also for how it fits into their broader energy policies. This includes regulatory support for renewable energy projects, hydrogen certification, and cross-border trade agreements.
The capital-intensive nature of green hydrogen projects means funding is another critical barrier. While there are signs of interest from international investors, the risk perception in some North African markets could deter the necessary influx of capital. It might be necessary to seek international cooperation on innovative financing models such as green bonds which are issued by public or private institutions for the purpose of funding projects intended to mitigate climate change.
Lastly, skill development and technology transfer present other hurdles. Building a green hydrogen industry requires a skilled workforce that counts engineers, technicians, labourers, and policymakers as members. Considering that nations who want to participate in the green hydrogen economy will have to develop local expertise, there is a built-in need for investment in education and training. And while technology transfer from countries leading in hydrogen technology would be beneficial, it comes with its own set of potential limitations regarding intellectual property and capacity expansion.
Moving Forward
Despite these challenges, leveraging North Africa's green hydrogen potential is a worthy pursuit and will require a multi-faceted approach:
– Regional collaboration. Initiatives like the African Green Hydrogen Alliance are steps in the right direction, promoting shared knowledge, infrastructure, and investment.
– Technological innovation. Conducting research into more efficient electrolysers, better hydrogen storage solutions, and the use of non-fresh water sources for electrolysis could mitigate some of the current limitations.
– International partnerships. The EU’s goal of importing 10 million tonnes of green hydrogen by 2030, as stipulated by the REPowerEU Plan, presents an immediate market opportunity. Collaborations across Europe for diversified investment, technology sharing, and market access can accelerate development.
– Policy leadership. Governments must lead with policies and offerings that not only incentivise green hydrogen but also ensure sustainability. These would include clear and detailed roadmaps to success, unwavering support for initial projects, and incentives like the simplified administrative procedures and tax breaks l the Egyptian government established when it granted 42 000 square kilometers of land to the New and Renewable Energy Authority (NREA) for green hydrogen production.
– Environmental considerations. It is crucial to ensure that green hydrogen projects do not lead to unintended environmental degradation, especially concerning water use. Operators must integrate and adhere to environmentally friendly practices from the outset.
The development of green hydrogen in North Africa holds transformative potential, offering a route to clean energy production that could redefine the region's economic landscape.
However, to realise this potential, North Africa will have to overcome significant hurdles through strategic planning, international cooperation, and a commitment to sustainability. If North Africa navigates these challenges with foresight and innovation, the region could meet its own energy needs via greener alternatives while playing a pivotal role in the global energy transition and setting a precedent for other regions to follow.
NJ Ayuk is the executive chairman of the African Energy Chamber.
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