The report reveals that North African countries in the region formerly known as the Barbary coast, including Algeria and Morocco, plus Egypt, are leading the efforts, with their abundance of year-round sunshine providing ample opportunities for investments in green hydrogen production and export infrastructure.

The countries are strategically located across the Mediterranean from Europe. Germany, Austria and Italy are proposing to repurpose 3,300 km of existing midstream gas infrastructure in North Africa to import 4mn t/y of green hydrogen to the continent. For one, Egypt’s National Green Hydrogen Strategy aims to hold 8% of the global hydrogen market and produce 10mn t/y of green hydrogen by 2050, with a significant portion destined for export.

Neil Golding, EIC’s Director of Market Intelligence, cautions that optimism about hydrogen projects should be viewed with care: ‘While the longer-term outlook looks positive for the hydrogen sector, no commercial-scale project has yet reached a final investment decision,’ he says. ‘Offtake agreements need to be signed, and demand created, for the projects to be commercially viable. At the same time, we see the need for regulatory frameworks to be established and the development of robust infrastructure.’

He adds: ‘What is clear is that North Africa is well placed to support Europe’s hydrogen ambitions and could become a potentially significant supplier of the molecule in the future. Financial support is also coming in the form of EU grants for some African countries, notably Namibia and South Africa, across the hydrogen value chain, which points to a positive outlook for the sector.’

Africa offers fertile ground for scaling the production of green hydrogen, produced using renewable energy sources like solar and wind, as it continues to leverage its abundant resources and low production costs. The Africa Green Hydrogen Alliance, launched in 2022 and led by Egypt, Kenya, Mauritania, Morocco, Namibia and South Africa, aims to position Africa as a global leader in this sector. According to the report, 41 hydrogen projects are expected to enter development between now and 2030.  

Sub-Saharan Africa is also developing green hydrogen capabilities, with countries like Namibia leading with large-scale projects. Namibia’s proposed $10bn hydrogen project could create 15,000 construction jobs and 3,000 permanent positions. Further north, Mauritania’s Aman and Nour projects are set to produce 40 GW of power to produce hydrogen.

Despite the massive potential, the report identifies several challenges that need to be addressed to fully realise Africa’s green hydrogen ambitions, including the need for major infrastructure investments – such as pipelines, ports and export facilities – and the development of clear policy frameworks and regulatory support to attract investments.

The upfront costs of green hydrogen projects call for international cooperation and financing initiatives, the report says. Europe’s REPowerEU Plan, designed to reduce the continent’s dependence on Russian gas, and which aims to import 10mn tonnes of green hydrogen every year from Africa, is a sign that efforts are already in place. However, the report notes that more targeted funding and collaboration will be key to scaling up hydrogen production in Africa.

EIC’s Head of External Affairs, Rebecca Groundwater, says: ‘For businesses in Europe and elsewhere to move to Africa, there needs to be the right regulatory and financing conditions that help propel Africa’s hydrogen and, indeed, cleantech potential. But capital isn’t ample in Africa, and hence the need for international collaboration to open new financing channels in the continent.’

The green hydrogen sector is closely tied to Africa’s broader renewable energy growth. The report notes that 61.1 GW of renewable energy capacity is currently operational across the continent, with significant investments in solar and wind projects. South Africa leads in solar capacity, with 59 operational solar farms, while North African countries like Egypt and Morocco are driving wind energy development, with 9 GW of wind capacity added to the grid as of 2024.

But the report says that Africa will need to invest in power storage in tandem with production. Africa’s energy storage capacity has grown from 180 MW in 1979 to 4.2 GW in 2023, with South Africa contributing 3.6 GW. The sector, however, faces significant challenges due to a lack of clear regulations.