Back in January, ahead of hosting November's COP summit, Egypt revealed it would be investing heavily into green hydrogen "before June" in a bid to help it phase out fossil fuels and reduce carbon emissions.
Credit: Capitano Footage / Shutterstock
The National Committee, alongside the European Bank for Reconstruction and Development (EBRD) and other international partners, set up a pipeline for $40 billion in funding to accelerate development announced shortly after it was selected as the first African host of the UN Climate Change Summit.
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With an initial goal of 1.4GW capacity by 2030, a new report from Rystad Energy found the development pipeline has the potential for 11.62GW by 2035.
Green hydrogen may be one of the most versatile forms of alternative energy required for the green transition, with potential uses in manufacturing, aerospace, transport, freight, shipping and more, with some experts arguing it may not even require new infrastructure in the early days, highlighting its potential as a potent tool for decarbonisation.
In recent months, a series of projects has been announced that have brought Egypt's ambitions forwards as a "global leader" in renewable energy. As it gears up to host COP27 in 2023, the nation's latest plans have captivated foreign investors.
For example, UAE-based Masdar recently signed a memorandum of understanding (MoU) with Egyptian state-backed affiliates for 4GW of hydrogen. And on Monday, May 15, Egypt Today reported that Minister of Electricity Mohamed Shaker revealed the nation would be working with international partners to implement experimental projects to produce green hydrogen, based on directives from the country's President Abdel-Fattah El-Sisi.
“Masdar and Hassan Allam Utilities see Egypt as a hub for green hydrogen production, targeting the bunkering market, export to Europe, and boosting local industry,” the firm said in a statement following the signing.
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It also reported this project would produce 300,000 tonnes of green hydrogen, with Rystad confirming that the current plants could produce around 1.57 million tonnes of hydrogen annually.
French utilities firm EDF and ZeroWaste have also expressed interest in investing in Egyptian hydrogen projects, alongside other industry titans such as Maersk, Petrofac and H2-Industries, Siemens and Eni.
Egypt has a number of advantages that make it attractive to foreign investors, primarily attributed to its existing natural gas pipelines, which could be used to transport green hydrogen until proper infrastructure is set up.
Due to its climate, it also presents high potential for solar and wind energy, while also hosting liquefaction facilities, bunkering markets and marine ports.
“Egypt enjoys abundant solar and wind resources that allow generation of renewable power at a highly competitive cost — a key enabler for green hydrogen production,” Masdar added.
“Egypt is also located within close proximity to markets where demand for green hydrogen is expected to grow the most, providing robust opportunity for export.”
The $40 billion scheme will look into the production, storage and import and export of both green hydrogen and ammonia under a new economic development strategy allowing for state support and tax incentives.
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In addition, bureaucracy and red tape that may make it difficult to fund renewable projects in places like Europe have reportedly been simplified. Additional incentives, such as utility costs being passed to the state, land cost reimbursements and custom points for imports and exports could also be in the works, Rystad revealed.
“Egypt has all the prerequisites to become a green hydrogen giant – fantastic renewable potential, space for megaprojects and construction expertise," Rystad's head of hydrogen Dr Minh Khoi Le said.
"The $40 billion in planned investments by the Egyptian government demonstrates commitment and will bring further foreign investment.
"Sitting between three continents and with the Suez Canal carrying approximately 12% of all the seaborne freight in the world, Egypt can supply renewable energy near and far. The domestic market will benefit too as the Egyptian agriculture sector can look forward to being one of the greenest when it comes to fertiliser use," he added.
The Persian Gulf, which is connected to the Mediterranean Sea via the Suez Canal, is a major shipping hub. Owned by Egypt, 12% of global trade passes through it, which could prove a cornerstone for Egypt's hydrogen economy. Credit: Marine Traffic (Taken 17 May 2022)
These green hydrogen plans could be huge for Egypt's economy and it stands to become among the largest producers in the world.
Rystad expects a flow of foreign investment into the country that could extend the potential 11GW capacity for hydrogen and ammonia.
80% of the announced projects are planned for the "SCZONE" that seeks to connect Europe, Africa and Asia through the Persian Gulf and Suez canal.
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Other projects in the region include a huge seawater desalination plant - removing salt from seawater, which may also be essential in hydrogen production - a sewage treatment plant and storage of fuels such as ammonia.
Green hydrogen infrastructure in this hotbed for industry may be another key way to boost Egypt's economy.
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