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Egypt-Europe alliance aims to make green hydrogen hype a reality

Hydrogen Egypt and Hydrogen Europe are working together to turn $83bn in deals agreed to at Cop27 into action

Hydrogen Egypt co-founder Dalia Samir, Hydrogen Europe chief executive Jorgo Chatzimarkakis and Hydrogen Egypt executive director Khaled Nageib. Photo: Hydrogen Egypt Nada El SawyDec 8, 2022

Egypt has seemingly turned into a future green hydrogen powerhouse overnight.

The North African country finalised nine of 16 green energy agreements worth about $83 billion with international companies at the UN climate summit, Cop27, in Sharm El Sheikh last month.

On Wednesday, it signed seven additional preliminary agreements with local and international companies to study green hydrogen energy projects.

They include Saudi Arabia’s Acwa Power, a consortium of US-based Benchmark Energy and Egypt’s Chemical Industries Holding Company, China Energy, Germany’s DAI, India’s Ocior Energy, a consortium of France’s Voltalia and Egypt’s Taqa Arabia, and British Petroleum.

Now is the time to translate paper into action, the chief executives of Hydrogen Europe and Hydrogen Egypt told The National in a joint interview. The two entities signed a co-operation agreement in Cairo earlier this week.

“The most important time is not the Cop. It is the time in between, because we have agreed on certain elements and now we need to simply implement them,” said Hydrogen Europe chief executive Jorgo Chatzimarkakis.

“We need to get the MoUs [memorandums of understanding] into concrete projects and concrete products and concrete jobs,” he said.

Hydrogen Europe represents the interests of the European hydrogen industry and its stakeholders. It has more than 400 members, including more than 30 national associations.

The challenges are “on both sides of the Med”, said Hydrogen Egypt executive director Khaled Nageib, with the EU still finalising green energy policies and regulations and Egypt facing a tall order to create the necessary infrastructure.

“The investors, the off-takers, everybody’s ready,” said Mr Nageib, who is also chief executive of the Egyptian Ports Development Group.

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Hydrogen Egypt is an association recently formed under the Egyptian Ports Development Group to drive Egypt’s hydrogen industry and promote green hydrogen as a way to achieve carbon neutrality.

Green hydrogen is produced using electrolysers powered by renewable energy to split water from oxygen, significantly reducing the carbon dioxide emissions caused by traditional hydrogen production methods that mainly use fossil fuels.

At Cop27, Minister of Petroleum and Mineral Resources Tarek El Molla said Egypt had hastened its strategy to achieve 42 per cent renewables in the energy mix by 2030, compared to the previous goal of 2035. The country only had 11 per cent of renewable energy in 2019.

Egypt is expected to launch its national low-carbon hydrogen strategy — prepared in co-operation with the European Bank for Reconstruction and Development — by the end of the year, Minister of Electricity Mohamed Shaker said.

Meanwhile, the EU has its own European Green Deal, agreed on in 2020. The bloc hopes to reduce its greenhouse gas emissions by 55 per cent (compared with 1990 levels) by 2030 through its Fit for 55 package of legislative proposals.

“Fit for 55 was a major legal and regulatory step,” Mr Chatzimarkakis said. “It was the biggest regulatory change since the EU internal market was established. So, 3,000 pages of law and 1,000 mentions of hydrogen.”

Its REPowerEU plan aims to achieve 20 million tonnes of renewable hydrogen consumption by 2030. The EU currently consumes about eight million tonnes of hydrogen per year, 98 per cent of which is derived from natural gas.

The Russia-Ukraine war and the ensuing energy crisis in Europe have increased the urgency in reducing the continent’s dependence on fossil fuels.

European Commission President Ursula von der Leyen speaks during the Cop27 summit in Sharm El Sheikh last month. EPA

The European Commission signed three preliminary agreements — with Namibia, Kazakhstan and Egypt — on renewable hydrogen on the sidelines of Cop27.

Egypt will “definitely be one of the powerhouses” and is “the prime partner of the Europeans”, Mr Chatzimarkakis said.

“If both sides come to clear certifications, clear regulations, then Egypt will deliver much faster than others,” he said.

He added that other powerhouses in the Mena region include Saudi Arabia and the UAE.

“Egypt has two very strong geographic ace cards,” Mr Nageib said. “One is on the solar wind map … and geographic proximity to Europe is a huge advantage.”

The Suez Canal and existing pipelines that have the “immediate possibility to transport the hydrogen carriers — like methanol, ammonia or synthetic methane — to close destinations in the Mediterranean” also give Egypt an edge, Mr Chatzimarkakis said.

As for the funding needed for Egypt’s green hydrogen future, the European Commission pledged up to €35 million ($36.8 million) in support of the country’s Energy Wealth Initiative.

The EBRD said it would provide an $80 million loan for the 100-megawatt green hydrogen plant to be built by Norway’s Scatec, Fertiglobe, Orascom Construction and the Sovereign Fund of Egypt.

The $83-billion figure assigned to the nine framework agreements is presumably huge because it includes the investments in technology transfer and infrastructure needed to support all of these large projects.

“These plants need an industrial facility, they need a port and they need a grid, and they need green energy,” Mr Nageib said.

Mr Chatzimarkakis said partners that are willing to sign 10 and 20-year agreements are needed.

It will take until 2035 for all of the projects to be operational, but some are on the horizon sooner.

“It could already be 2024, but I think 2025 is more realistic,” Mr Chatzimarkakis said.

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