Egypt is positioning itself as a regional hub for green hydrogen production and export due to its strategic geographical location, abundant solar and wind resources, and the government's proactive initiatives.
Why is green hydrogen so important?
Hydrogen is a highly efficient and environmentally friendly fuel. Its combustion emits no greenhouse gases or ozone-depleting chemicals. Green hydrogen is produced using renewable energy sources, such as wind or solar, to power the electrolysis of water. This process splits water molecules into hydrogen and oxygen. Green hydrogen can be used to produce sustainable aviation fuel (SAF) by combining carbon dioxide captured directly from the air with green hydrogen. The SAF produced is then refined to meet aviation fuel standards. This includes removing impurities and ensuring that the fuel meets the necessary specifications for use in aircraft.
Why are wind or solar the best sources of green hydrogen?
Wind and solar are highly efficient sources of energy that can produce large amounts of electricity with minimal environmental impact. Overall, wind and solar are considered the best sources of green hydrogen due to their renewable nature, high efficiency, abundance, and cost-effectiveness. The use of green hydrogen as a sustainable aviation fuel has the potential to significantly reduce carbon emissions in the aviation industry and contribute to sustainability goals.
Why are sustainable aviation fuel (SAF) so important for the aviation industry?
The aviation industry is in urgent need of transformation to address climate change, and hydrogen-powered aviation offers a significant opportunity for market growth and climate change solutions. SAF is a "drop-in" fuel, meaning it can be mixed in or replace traditional jet fuel without requiring any alterations to the infrastructure or equipment. With the potential for renewable energy and tax credit incentives, green hydrogen has the potential to become cheaper than conventional jet fuels over time.
What are the projected growth and adoption rates of SAF?
According to the Sustainable Aviation Fuel Market Size & Share report, the SAF market is projected to grow from USD 219 million in 2021 to USD 15,716 million by 2030, at a CAGR of 60.8% during the forecast period. The report also states that the increasing need for a reduction in GHG emissions, increasing air passenger traffic, and high fuel efficiency of SAF are the major drivers of the market. The SAF market is expected to increase from $216 million to more than $14 billion by 2030. The International Energy Agency states that increasing SAF use in aviation to 10% by 2030 in line with the Net Zero Scenario will require a significant ramp-up of investment in capacity. Furthermore, almost 30 airlines have set some form of SAF adoption target, such as 10% of fuel consumption by 2030. The demand for SAF is expected to reach 7 billion gallons by 2030. The adoption of SAF is seen as a key strategy for achieving sustainable air travel and reducing the industry's environmental impact.
What is Egypt's role as a producer of green hydrogen?
Egypt is positioning itself as a regional hub for green hydrogen production and export due to its strategic geographical location, abundant solar and wind resources, and the government's proactive initiatives. The country's strategic vision has been reinforced by key collaborations such as the Memorandum of Understanding with the European Union, providing investment support for hydrogen infrastructure, and its partnership with global entities like Siemens Energy. Additionally, Egypt is looking to harness up to 100,000 MW of renewable energy for green hydrogen production in the next decade, aiming to create tens of thousands of jobs and significantly reduce carbon dioxide emissions.
Forecasts suggest that Egypt could produce 20 million tons of green hydrogen annually by 2035, contributing significantly to a potential €1 trillion worth of green hydrogen across the African continent. Furthermore, the country's legislative framework is supportive of green hydrogen projects, offering incentives and land for renewable energy installations. Lastly, the potential growth of the green hydrogen economy in Egypt could lead to a substantial increase in the country's GDP by 2050, solidifying its position as a key player in the energy sector.
What are the major project underway in Egypt?
Egypt is gearing up to become a major player in the green hydrogen sector. Germany and Egypt have agreed to jointly invest in hydrogen projects and promote the use of German technology. Fertiglobe has commissioned Africa's first integrated green hydrogen facility, Egypt Green, set to produce 15,000 tonnes of green hydrogen annually. Infinity Power, Masdar, and Hassan Allam Utilities are developing a 2 GW green program, with plans for two hydrogen plants in Egypt. Fortescue Future Industries plans to start a green hydrogen project in 2027, aiming for 330 kilotons annual production.
Egypt signed seven MoUs with companies including ACWA Power and China Energy for green hydrogen projects. Egypt's cabinet approved a $5.5 billion green ammonia project, and the UK is exploring increased cooperation in renewable energy sectors, including green hydrogen. China Energy will commence the construction of a $5.1 billion green hydrogen plant in Egypt.
Egypt Green Hydrogen S.A.E (EGH) secured an $80 million loan from EBRD to develop Egypt's first green hydrogen production facility. DNV and Petrojet signed an MoU to accelerate green hydrogen development. Egypt's Minister of Electricity announced the commencement of green ammonia extraction. These projects and MoUs confirm Egypt's commitment to becoming a regional hub for green hydrogen production.
Here is a breakdown of key projects and collaborations that are currently in progress:
Germany and Egypt cooperation: This project represents significant international collaboration and shared technology, setting the foundation for various other projects.
UK-Egypt Cooperation: The UK's interest in increasing investment and cooperation with Egypt in the green hydrogen sector enhances the international reputation of Egypt's renewable energy sector.
Norwegian Collaboration: The partnership with a major Norwegian company makes it important due to its focus on the globally recognized Norwegian green hydrogen technology.
Infinity Power, Masdar, and Hassan Allam Utilities Consortium: The planned 2 GW green program and two green hydrogen production plants are among the most significant due to their sheer scale and the goal to reach 4 GW electrolyzer capacity by 2030.
Fortescue Future Industries' (FFI) Project: FFI's green hydrogen project is another big project due to its large renewable energy capacity (7,600 megawatts) and the expected annual production of 330 kilotons of green hydrogen.
Green Ammonia Project in Ain Sokhna: This $5.5 billion project approved by Egypt's cabinet, with an expected annual production capacity of 1 million tonnes of green ammonia, is substantial.
China Energy's Green Hydrogen Plant: The $5.1 billion plant, which will potentially export green ammonia to European markets, is another important project due to its size and international implications.
ReNew Power Project: This project involves the construction of a green hydrogen plant with a total investment of $8 billion, marking it as a major player.
Egypt Green Hydrogen S.A.E (EGH) Loan: This project marks the development and operation of Egypt's first green hydrogen production facility, setting a significant precedent.
Fertiglobe's Green Hydrogen Plant: This plant is important as Africa's first integrated green hydrogen facility, marking a significant step for the continent's green energy sector.
Voltalia and TAQA Arabia's Facility: The proposed facility has a solid renewable energy backing, and its projected expansion makes it significant.
Smartenergy Project: The Swiss firm's $1 billion investment in a green hydrogen facility in Egypt marks its first project outside Europe, adding international significance.
Honeywell's Investment: Honeywell's interest in expanding investments in Egypt, particularly in the hydrogen production sector, is an encouraging sign for the industry.
DNV and Petrojet Collaboration: The companies' MoU to accelerate green hydrogen development in Egypt contributes to the overall momentum in the country's green energy sector.
Metito's Desalination Plants: Although not a hydrogen production project per se, these proposed desalination plants are an integral part of supporting the green hydrogen facilities in Ain Sokhna.
MOPCO, ECHEM, and Scatec Collaboration: While not much detail is available, this collaboration is key to integrating green hydrogen production in the fertilizers sector.
Seven MoUs for Green Hydrogen Projects: These MoUs involve both local and international companies aiming to establish Egypt as a regional hub for green hydrogen production.
What was the timeline of events in hydrogen projects?
18.10.2022: President Abdel Fattah al-Sisi confirmed Egypt's vision to become a regional hub for renewable energy, including green hydrogen, in a meeting with Siemens Energy's Chairman.
08.11.2022: Germany and Egypt signed a Joint Declaration of Intent to boost cooperation on liquefied natural gas and green hydrogen.
09.11.2022: Fertiglobe began commissioning the first phase of the green hydrogen plant, Egypt Green, in Ain Sokhna.
13.11.2022: Honeywell expressed interest in expanding investments in Egypt, including hydrogen production, during a meeting with Egypt's Minister of Petroleum and Mineral Resources.
17.11.2022: Infinity Power, Masdar, and Hassan Allam Utilities agreed to develop a 2 GW green program in the Suez Canal Economic Zone (SCZONE), including two green hydrogen production plants.
17.11.2022: Egypt's Minister of Petroleum and Mineral Resources, Tarek El Molla, signed an MoU with the EU to boost collaboration on green hydrogen.
20.11.2022: Minister Tarek El Molla revealed plans to expedite renewable energy projects to increase power and hydrogen exports to Europe.
01.12.2022: The Egyptian government signed a framework agreement for a green hydrogen project aiming for carbon neutrality.
08.12.2022: Fortescue Future Industries (FFI) announced plans for a green hydrogen project in Egypt to begin in 2027.
08.12.2022: Egypt signed seven MoUs for green hydrogen projects with local and international companies.
10.12.2022: Voltalia and TAQA Arabia signed an MOU with the Egyptian Government to develop a green hydrogen facility in the Suez Canal Economic Zone.
14.12.2022: Minister of Electricity and Renewable Energy, Dr. Mohamed Shaker, revealed plans to utilize renewable energy for green hydrogen production.
15.12.2022: Egypt's cabinet approved a $5.5 billion green ammonia project in the Ain Sokhna industrial zone.
29.12.2022: A study by the EIB, the African Union, and the International Solar Alliance predicted Egypt to produce 20 million tons of green hydrogen annually by 2035.
10.01.2023: Egypt's Finance Minister, Mohamed Maait, confirmed the sustainable sovereign financing framework to boost 'green recovery' and achieve sustainable development.
12.01.2023: Minister of Electricity and Renewable Energy, Dr. Mohamed Shaker, revealed that Egypt has begun extracting green ammonia in collaboration with the private sector.
18.01.2023: A report by the Middle East Solar Industry Association's suggested that MENA region could become the world's second-largest electrolyser installer by 2040.
08.03.2023: The UK is exploring increased investment and cooperation with Egypt in electricity and renewable energy sectors, including green hydrogen.
10.03.2023: China Energy announced the commencement of a $5.1 billion green hydrogen plant's construction in Egypt in May.
15.03.2023: Egypt is set to unveil a low-carbon energy strategy that targets 42% renewable energy by 2030, as stated by Minister Tarek El Molla. The country is increasing its natural gas exports and planning three international gas and oil tenders amid economic pressure from the Russia-Ukraine war.
18.03.2023: Egypt Green Hydrogen S.A.E (EGH) secured an $80 million equity bridge loan from EBRD to develop and operate Egypt's first green hydrogen production facility. The 100 MW electrolyser facility will produce green hydrogen for the Egyptian Fertilizer Company and will be used to produce green ammonia for export. EGH is owned by Scatec ASA, Fertiglobe PLC, Orascom Construction PLC, and the Sovereign Fund of Egypt’s Infrastructure and Utilities Fund.
21.03.2023: The first high-level meeting to discuss energy cooperation, particularly in hydrogen, between Egypt and Germany was held. This meeting is seen as a key step following a MoU signed on November 3, 2022, to establish a stronger cooperative framework for energy development between the two countries.
24.03.2023: Global energy expert DNV and regional contractor Petrojet signed an MoU to accelerate green hydrogen development in Egypt. The agreement covers renewable power, energy storage, and CO2 or low-carbon hydrogen projects.
28.03.2023: Egypt is on the verge of signing eight new MoUs in the green hydrogen production field, according to the Suez Canal Economic Zone's (SCZone) head, Waleid Gamal El-Dien. The SCZone is negotiating with a Chinese firm to establish a local electric vehicle (EV) industry, with an announcement expected before June.
07.04.2023: Egypt is expected to emerge as a top wind energy market with various large-scale wind and green hydrogen projects underway. ACWA Power, Masdar Consortium, and Fortescue Future Industries have signed Memoranda of Understanding for onshore wind projects of 10 GW, 10 GW, and 9.2 GW respectively in 2022.
09.05.2023: Egypt's Ministry of Electricity and Renewable Energy is offering lands in Aswan, Sohag, and the Nile bank to foreign investors for establishing solar and wind power stations, and for producing green hydrogen for export.
18.05.2023: Egypt's Cabinet has approved a law to encourage green hydrogen projects. The legislation covers green hydrogen production, the development of renewable energy facilities, and the establishment of desalination plants.
20.05.2023: Egypt's cabinet has approved a draft law promoting green hydrogen projects and companies, providing various financial incentives.
30.05.2023: Egypt, in partnership with a major Norwegian company, has initiated the production of green hydrogen within the Suez Canal Economic Zone, becoming the first African nation to do so.
27.06.2023: ReNew Power and the Egyptian authorities have signed a framework agreement for the construction of a green hydrogen plant in Egypt, with a total investment of $8 billion.
16.07.2023: UAE-based company Metito is in talks to establish four desalination plants in Egypt, each with an annual production capacity of 50k cubic meters. These plants will serve green hydrogen production facilities in Ain Sokhna.
20.07.2023: A report by the Information and Decision Support Center of the Egyptian Cabinet predicts that the green hydrogen economy could increase Egypt's GDP by US$10 to $18 billion by 2050.
27.07.2023: Egypt's Misr Fertilizers Production Company (MOPCO) has partnered with the Egyptian Petrochemicals Holding Company (ECHEM) and Norway’s Scatec to establish a company specializing in green hydrogen production.
28.07.2023: Egypt's abundant solar energy and government initiatives aim to reach 42% renewable energy by 2035. Major projects include the 1.8 GW Benban Solar Park and the 500 MW Kom Ombo Solar Plant.
30.07.2023: Egypt's energy market, especially in renewable energy and natural gas, is increasingly attractive to foreign investors due to the nation's strategic geographical position and abundant resources.
31.07.2023: Swiss firm Smartenergy is reportedly finalizing a deal to establish a $1 billion green hydrogen facility in Egypt, marking its first project outside Europe.