Egypt publishes a green hydrogen production roadmap: The Egyptian government published its roadmap (pdf) for green hydrogen production yesterday, noting the challenges hindering production for local players and offering potential pathways for accelerating green fuel generation in the country. The report comes ahead of the government’s national strategy on green hydrogen production, which the state says should be revealed in the coming months. The report cites high production costs, a lack of demand for green fuels, inadequate infrastructure supporting green fuel generation, and a lack of localization on green hydrogen-associated technologies as obstacles that need to be overcome before the country can unlock its full green hydrogen production potential.

REMEMBER- The Egyptian government signed several framework agreements during COP27 with foreign companies to construct a number of green hydrogen and ammonia facilities in the Suez Canal Economic Zone (SCZone). The facilities would cost a combined USD 83 bn and collectively produce up to 7.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year. Egypt also approved incentives earlier in May to boost the country’s green hydrogen sector and lure in much-needed foreign exchange inflows.

Here are some of the recommendations: The Electricity and Renewable Energy Ministry and the General Authority for Investments and Free Zones (GAFI) would be tasked with increasing support and financing for the production of electricity from renewables “as soon as possible,” the report notes. Subsidies for electricity used for green hydrogen production — especially for electrolyzers — are also needed, with the Finance Ministry and the Electricity and Renewable Energy Ministry enacting regulations on this front. The government should also focus on localizing electrolyzer tech and provide grants and concessional loans to push down electrolyzer-associated manufacturing costs, the report notes, adding that the Foreign and the International Cooperation Ministries would work in the short term to establish a “one-stop shop” platform to secure funds and loans from countries to which Egypt would export green fuels.

REFRESHER- Egypt is getting an electrolyzer plant courtesy of the EBRD: The European Bank for Reconstruction and Development agreed to provide the Fertiglobe-Scatec-OC-SFE ammonia plant with a USD 80 mn loan in November to build a 100 MW electrolyzer facility powered by renewable energy.

And there’s more on deck: The government — through GAFI and the Electricity and Renewable Energy Ministry — should look at providing renewables developers with tax exemptions and financial incentives to increase green hydrogen production, the report advises. The country’s Finance Ministry and the Trade and Industry Ministry should also in the short term apply carbon contracts for difference — which aim to reduce financial costs and risks of clean energy investments — to establish a standard for carbon pricing, and ultimately bring down hydrogen costs for green fuel consumers. Meanwhile, Egypt’s Environment Ministry should pass regulations requiring that manufacturers clearly label products that use green hydrogen in their production to incentivize hydrogen utilization.

And supply, decarbonization, and infrastructure targets are included: The government — represented by the Trade and Industry Ministry, GAFI, and the SCZone — should promote the use of green hydrogen locally by establishing “hydrogen valleys” where production sites are located in close proximity to ports and other areas where consumption is high, which should increase local demand, according to the report. The government should also set clear goals for green fuel consumption targets to support local production, enact a carbon tax to accelerate the transition to green fuels, and incentivize green fuel usage in hard-to-abate sectors including the fertilizer production and steel manufacturing.