Egypt’s pipeline for green hydrogen projects stands at 11.62 GW, equivalent to over 1.57 million t of green hydrogen, ranking the country in the top three green hydrogen pipelines globally, after Australia and on par with Mauritania. The estimated cost for these hydrogen projects alone, without additional infrastructures, will be approximately US$20 billion. The projects are expected to come online before 2035, according to Rystad Energy research.
The series of projects announced in Egypt over the past three months has captivated foreign developers, highlighted the country’s potential, and came as the country gears up to host COP27 in 2023. The interest shown by international developers in Egypt is due to some favourable factors including the country’s location, natural gas infrastructure, liquefaction facilities, bunkering market, and marine ports, as well as its high solar and wind potential. Egypt is also close to markets such as the EU and the Middle East – regions set to see a huge demand for hydrogen in the coming years, Rystad Energy states.
The government of Egypt plans to release a US$40-billion national hydrogen plan in the coming months, recognising the importance of production, storage, and export/import of green hydrogen and ammonia under its economic development strategy and allowing for state support and tax incentives. The process of establishing, operating, and managing hydrogen projects has been simplified, requiring a single permit, which means less red tape. Additional incentives could include special custom points for export/import, utilities connection costs being passed on to the state, the reimbursement of 50% of land allocation costs (under the condition that the project commences production within two years) and other non-fiscal incentives.
“Egypt has all the prerequisites to become a green hydrogen giant – fantastic renewable potential, space for mega projects and construction expertise. 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 fertilizer use,” said Dr Minh Khoi Le, Head of Hydrogen at Rystad Energy.
This plan would be a huge development for Egypt’s green hydrogen economy. The upcoming legislation will enable green hydrogen and ammonia plans, and with the over 11-GW of projects already announced, Rystad Energy expects a huge inflow of foreign investment into the country. Several feasibility studies and MOUs between Egyptian state entities and leading international ammonia and hydrogen market players for the development of green ammonia and green hydrogen have been reported in 2021. These studies and preliminary agreements are expected to proceed to projects due to the commitment from the Egyptian government that should encourage additional international investors to enter the Egyptian hydrogen and ammonia market.