How Egypt is Accelerating Green Hydrogen Leadership to Reach Its Transition Goals

Egypt, the land of the Great Pyramids and the heart of an advanced ancient civilization, is now spearheading innovations in green hydrogen in Africa. In 2023, the country revised its Nationally Determined Contributions (NDC) and committed to reducing their electricity generation, transmission, and distribution emissions by 37% of their forecasted 2030 business-as-usual (BAU) scenario. A major focus of this transition is green hydrogen, with a planned investment of US$40 billion over ten years. Let’s explore the technology and how Egypt is positioning itself as the pioneer to this energy transition segment within the African continent.

What is Green Hydrogen?

Green hydrogen is a clean, high-energy-density energy carrier produced through the electrolysis of water using renewable energy sources like solar or wind power. Unlike conventional hydrogen (often derived from fossil fuels), its "green" label comes from its zero-emission production process. It serves as an efficient energy storage solution and is widely used in the chemical industry for ammonia production and refining petroleum products. 

Green hydrogen can also be leveraged as an alternate fuel to lithium-ion-run electric vehicles. While lithium-ion batteries dominate current energy storage for vehicles and electronics, green hydrogen offers complementary advantages: it enables longer ranges and faster refueling for heavy transport (trucks, ships, and industrial equipment), can be stored for extended periods without energy loss, and doesn't rely on finite mineral resources. However, hydrogen systems currently face lower energy efficiency than lithium-ion batteries in some applications due to conversion losses. The optimal solution likely involves using both technologies where they perform best - batteries for light vehicles and short-term storage, hydrogen for heavy-duty applications and seasonal energy storage.

Hydrogen is mainly produced by three distinct methods which give rise to the three predominant colours of hydrogen: Green Hydrogen, Blue Hydrogen, and Grey Hydrogen.

Green hydrogen, made using renewable sources, has a very low carbon intensity, between zero and 0.5 kgCO2eq/kgH2—20 times lower than blue hydrogen and 50 times lower than grey hydrogen. While more expensive to produce, the low emission intensity offers an attractive incentive for organizations and governments to push for more green hydrogen initiatives.

While green hydrogen is the cleanest form of hydrogen energy, it is also the most challenging to produce. Currently, green hydrogen costs at least six times as much to produce as grey hydrogen. Additionally, it is the most energy-intensive, as it requires more than 50 KWh and nine litres of water to produce each kilogram of hydrogen. To compete with grey hydrogen economically, green hydrogen must be delivered for $1 kilogram or less, which is hardly possible unless green energy is available at cost to zero cost.

It is clear that the adoption of green hydrogen is challenging, but the Egyptian government is up to the task and sees itself as the leading hub of green hydrogen in Africa.

How is Egypt leading the sector?

Egypt is a part of the Africa Green Hydrogen Alliance, which is a collaboration between six African countries: Egypt, Kenya, Mauritania, Morocco, Namibia, and South Africa. The alliance looks to intensify transcontinental assistance to supercharge the development of green hydrogen projects by advancing policy, capacity building, and financing of megaprojects.

To facilitate project feasibility and to lower financial barriers, the Egyptian government offers tax incentives to companies involved with green hydrogen production, storage, and export. The incentives allow companies operating in the area to deduct 30% to 50% off their investment costs through their tax bills.

With Egypt’s $40 billion investment plan, there are several planned major projects. One project is a US$7 billion collaboration between the Environmental Defense Fund (EDF) and Zero Waste, which aims to build a plant that produces 80,000 tonnes of green hydrogen. This project is expected to start hydrogen production in 2030. The collaborators are planning to construct a 700 MW electrolysis facility that uses 2 GW of solar and wind energy to produce green hydrogen and ammonia.

One of Egypt’s competitive advantages is its location. Situated next to the Mediterranean Sea, the country has direct access to Europe’s growing demand for green hydrogen. Many of the projects in Egypt are being designed with export to Europe in mind since many countries in the European Union will rely on imports to meet their green hydrogen consumption requirements in key hard-to-electrify industrial applications that require high temperatures from combustion. The export to Europe also allows for risk reduction of the initial investment by establishing offtake agreements beforehand.

With strong government actions attracting investments in green hydrogen projects, the future of Egypt’s green hydrogen sector looks promising. The country’s ambitions, outlined in its NDC, combined with its efforts to create a favorable investment climate, position Egypt as a potential leader in the global green hydrogen market. But what lies ahead?

Egypt’s success will depend on continued government support, innovation, and international collaboration. Clear regulatory frameworks, financial incentives, and strategic partnerships will be crucial to scaling up production and reducing costs. Additionally, investing in research and development will help Egypt stay competitive as green hydrogen technology evolves.

Egypt’s green hydrogen ambitions are not just a vision, but a tangible pathway toward a sustainable future. With the right mix of policies, innovation, and partnerships, Egypt is well-positioned to become a global hub for green hydrogen, contributing to both national prosperity and the global energy transition.