Egypt is competing with other countries to become a global and regional hub for green hydrogen production.
The parliamentary Energy Committee recently approved a new bill submitted by the government to introduce a package of incentives, notably a 33-55 per cent tax reduction for companies willing to invest in green hydrogen production.
Minister of Electricity Mohamed Shaker said Egypt aims to capture a 6 per cent share of the global green hydrogen market.
“Green hydrogen is expected to grow rapidly in the coming years as a potential major accelerator of the energy transition and an aid to global decarbonisation on a broader scale,” the minister said.
“Therefore, the government launched a national strategy for the production of low-carbon hydrogen as a promising source of energy in the near future,” the minister added.
During COP27 in Sharm el-Sheikh in November 2022, Egypt signed a series of memoranda of understanding (MoUs) with several international entities to attract foreign investment in green hydrogen production so that Egypt become a transit route for clean energy to Europe.
Mohamed Saadeddin, who is head of the Energy Committee of the Egyptian Federation of Industries, said hydrogen comes in different types or colours.
“There is gray hydrogen, which is produced by steam reforming of natural gas or coal, which is the method currently used to produce hydrogen in the US.
Green hydrogen is the result of the electrolysis of water. It’s produced without harmful greenhouse gas emissions. It uses clean electricity from surplus solar or wind power to electrolyse water
“It has, therefore, clear environmental benefits in reducing carbon emissions from steel and cement production, hence mitigating the effects of climate change,” Saadeddin told The Egyptian Gazette.
“Egypt has been setting up wind farms, solar energy facilities and hydropower sources since 2015 and is well-suited to develop a green hydrogen industry.
“Egypt’s cost-competitive and abundant renewable energy stocks make it an appealing host for green hydrogen production projects. We don’t need more energy for the grid, and so the government has directed private sector renewables firms that all the power they generate should be fed straight into green hydrogen,” Saadeddin added.
He also pointed out that green hydrogen is used to produce green ammonia, the main ingredient in producing fertilisers.
“Egypt is already a top global fertiliser supplier. Since European countries have ambitious emission reduction targets to meet, Egypt could boost fertiliser exports even more if production can go green.”
Hafez el-Salamawi, professor of energy engineering at Zagazig University, believes that a one-stop shop for hydrogen production projects will drum up investment.
“Therefore, investors would only need to talk to one entity that is empowered to handle all the different aspects,” el-Salamawi said, adding that the clarity provided by a one-stop shop would also increase the speed of project implementation.
He noted that our first green hydrogen projects are already benefiting from efforts to streamline foreign direct investment (FDI). Among the first projects to receive the government’s new Golden Licence were a $5.5 billion green ammonia plant to be built by Egypt Green Ammonia Company, and a 100 MW green hydrogen plan developed by Scatec, Fertiglobe and Orascom Construction.
“I think Egypt has all the attributes to become one of the key hydrogen markets but competition is high, so speed is one of the key aspects to either making or breaking our ambitions,” el-Salamawi said.
“Time is of the essence because now you have the whole world racing to set up green hydrogen and ammonia facilities,” he added, pointing to developments in the US, Canada, and Morocco.