Egypt too is looking to become a leading global player in the industry, capitalising on the advantages of its strategic location, sizable domestic market, and plentiful solar energy resources. Egypt is progressing green hydrogen development with the introduction of incentives for hydrogen production and agreements to develop green hydrogen projects, with a view to providing 5-8% of the world’s hydrogen by 2040.
Earlier this year, Egypt’s House of Representatives approved a draft bill which mandates incentives for green hydrogen production, including tax credits of 33-55% of the tax payable on revenues generated from the production of green hydrogen, exemption from VAT for equipment and materials used for green hydrogen products, and various waivers on taxes, contracts and land registration fees. Momentum is building for hydrogen projects, with an agreement with Saudi-based ACWA Power for the development of a green hydrogen project with a production capacity of 600,000 tonnes green ammonia per year, with the prospect of expanding capacity to 2mn tonnes per year in the second phase. The agreement was signed between ACWA Power and The Sovereign Fund of Egypt (TSFE), the Suez Canal Economic Zone (SCZone), the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA).
Egypt has signed seven memoranda of understanding with international developers in the fields of green hydrogen and renewable energy in the Suez Canal Economic Zone that could lead to total investment worth around US$40bn, according to a recent cabinet statement.
While UAE-based Fertiglobe, a leading nitrogen fertilizer and ammonia producer and distributer, has signed an MoU with AD Ports Group to store and ship urea and ammonia in Egypt and the UAE.
Egypt is also reported to be looking at possible cooperation opportunities with the European Union in the field of green hydrogen.
For the MENA region to develop its full potential as a green hydrogen hub, progress needs to be made on issues such as standardisation and certification to facilitate cross-border trade. Progress was made in this area at COP28, with initiatives launched to accelerate commercialisation of hydrogen and the development of cross-border value chains for hydrogen and its derivatives.