Egypt

Hydrogen demand in Egypt is expected to come from sectors like refining, fertilizers, and steel. Currently, the refining and fertilizer industries use hydrogen produced from fossil fuels for processes such as hydrotreatment, desulfurization of crude, and ammonia production for fertilizers. Although the steel sector does not currently use hydrogen, it is anticipated to adopt hydrogen in the future, depending on technological advancements and legislative support.

For estimated green hydrogen demand in the country, refer to the detailed study by International Solar Alliance – Readiness Assessment of Green Hydrogen in African Countries, 2024.

In August 2024, Egypt launched its National Low-Carbon Hydrogen Strategy to diversify its energy sources and transition to a low-carbon economy. The government expects this strategy to boost the country's GDP by USD 18 billion and create over 100,000 jobs by 2040. The plan focuses on increasing hydrogen production, promoting its use in various sectors like industry and transportation, and enhancing Egypt's role in the global hydrogen market.[1]

Strategic Objectives:

• The strategy is projected to contribute approximately USD 8 billion to Egypt’s GDP and create over 100,000 jobs by 2040. 

• Leveraging abundant renewable resources, particularly solar and wind energy, to produce low-carbon hydrogen.

• Aiming to capture 5 per cent of the global commercial hydrogen market by 2030 and 8 per cent by 2040. 

Implementation Phases:

1. Pilot Phase (Until 2030): Focus on supporting initial projects and establishing a governance structure. 

2. Scale-Up Phase (2030-2040): Aim to reduce production costs and expand to gigawatt-scale capacity. 

3. Full Market Implementation (Post-2040): Maintain market position and utilize hydrogen domestically for decarbonization. 

Production Targets:[2]

• Central Scenario: Produce 1.5 million tons of green hydrogen annually by 2030 and 5.8 million tons by 2040. 

• Green Scenario: Produce 3.2 million tons annually by 2030 and 9.2 million tons by 2040. 

Investment and Infrastructure:

• The Suez Canal Economic Zone (SCZone) has invested USD 3 billion in infrastructure to attract investors, with plans for a similar investment in the coming years. 

A new desalination plant at Sokhna is planned to support the burgeoning green hydrogen industry. 
 

Egypt’s regulatory framework for low-carbon hydrogen is evolving to create a conducive environment for investment, production, and export of green hydrogen.

1. National Council for Green Hydrogen:

Established in 2023, this is the primary body overseeing the implementation of Egypt’s low-carbon hydrogen strategy. It includes representatives from key ministries:

• Ministry of Electricity and Renewable Energy

• Ministry of Petroleum and Mineral Resources

• Ministry of Environment

• Ministry of Planning

• Suez Canal Economic Zone (SCZone)

• Sovereign Fund of Egypt

1. Investment Incentives & Regulatory Support

Egypt has introduced strong incentives for hydrogen investors, including:

• Tax Rebates: Clean hydrogen projects are eligible for a cash investment incentive equivalent to 33 per cent to 55 per cent of the tax paid on income generated from hydrogen projects.

• Fast-Track Licensing & Approvals: Streamlined permitting and regulatory procedures are provided, especially for projects in key zones like the Suez Canal Economic Zone.

• Land Allocation Policies: Simplified land leasing and allocation procedures for renewable energy projects linked to hydrogen production.

1. Green Hydrogen Investment Promotion Portal

A dedicated portal has been launched to ensure transparency and ease of doing business:

• Provides comprehensive information on regulatory processes.

• Lists available incentives and key procedures for hydrogen investments.

• Acts as a one-stop platform for potential investors.

1. Infrastructure Regulation

• Suez Canal Economic Zone (SCZone) Authority regulates port infrastructure, industrial zones, and water desalination facilities relevant for hydrogen projects.

• There are plans for regulated development of:

• Hydrogen pipelines (domestic & export)

• Storage facilities

• Export terminals

Egypt has set an ambitious goal to generate 42 per cent of its electricity from renewable sources by 2030. This target includes contributions from wind (14 per cet), concentrated solar power (CSP) (5.52 per cent), solar photovoltaic (PV) (21.3 per cent), and hydropower (1.98 per cent). Currently, Egypt's renewable energy installations total 6.6 GW out of a total installed power capacity of 60 GW. This includes approximately 2.8 GW from hydropower (about 42 per cent), 1.8 GW from solar (around 27 per cent), and 1.9 GW from wind (29 per cent). [1]

Figure: Installed capacity and renewable energy share in Egypt (2023) (ISA 2024)

Egypt benefits from 2,900 to 3,200 hours of sunshine annually, with an average annual direct normal irradiance (DNI) of 5.25-6.36 kWh/m² per day and a global horizontal irradiance (GHI) ranging from 5.52 to 6.26 kWh/m² per day, varying from north to south. Additionally, the vast artificial reservoir, Lake Nasser, upstream of the Aswan Dam on the Nile River, has the potential to host floating solar power plants, which could generate an estimated 32.8 TWh of energy from floating solar alone.[2]

Egypt is well-suited for installing concentrated solar power (CSP) systems, which are beneficial for both energy storage and power generation. The country enjoys average annual wind speeds of 8–10 m/s at a height of 100 meters along the Red Sea coast and 6–8 m/s along the southwest banks of the Nile River and in the southern part of the Western Desert.

To achieve its ambitious renewable energy and green hydrogen goals, Egypt is actively implementing policy measures and fostering markets and partnerships.

As of 2025, Egypt does not have established facilities for manufacturing electrolysers, which are essential for green hydrogen production.

According to the International Energy Agency (IEA), Egypt has announced 28 green hydrogen projects as of 2023, making it one of the leading countries in Africa for such initiatives. Most of these projects are aimed at exporting green hydrogen to meet the ammonia import demands of markets in Europe, Japan, and South Korea.[1]

While most of these projects are still in the concept or MoU stage, some have secured dedicated off takers for products like ammonia, methanol, hydrogen, and steel (Refer Table below, ISA 2024).

In addition to the projects mentioned above, noteworthy announcements were made in the year 2024-25 in the country - 

• Egypt Green Hydrogen project, located in Ain Sokhna, Suez Governorate, is a collaboration between Fertiglobe, Scatec ASA, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company. The project aims to produce renewable hydrogen to be used as feedstock for renewable ammonia production at Fertiglobe's facilities under a 20-year offtake agreement. The 100-MW project is expected to reach a final investment decision (FID) in the first half of 2025 and become operational in 2027.[2]

• The Investment Opportunities Platform of the General Authority for Investment and Free Zones in Egypt, in collaboration with the Ministry of Military Production, has announced a USD 17 billion project to construct the world's largest green hydrogen plant in South Sinai. Covering an area of 127 square kilometers, the plant aims to produce up to 400,000 tons of green hydrogen annually, as stated in a press release on March 2, 2025.[3]

• Egypt has entered into an approximately USD 7.58 billion agreement with France's EDF and the UAE-based Zero Waste to develop a green hydrogen facility near the Gulf of Suez. This project aims to produce over one million tons of green ammonia annually, primarily for use as shipping fuel for vessels navigating the Suez Canal. [4]

• ACWA Power has signed an agreement to develop a green hydrogen project in Egypt, with an investment exceeding USD 4 billion. This project is part of Egypt's broader strategy to become a leader in green hydrogen production and support its transition to renewable energy. The collaboration highlights the increasing focus on sustainable energy solutions and the potential for significant economic and environmental benefits.[5]

• Sterlite Power has proposed a significant project to establish a green hydrogen electricity grid in Egypt, with an estimated investment of USD 5-6 billion. This initiative aims to enhance Egypt's power transmission infrastructure and support its transition towards clean energy. The project reflects the growing cooperation between Egypt and India in the renewable energy sector, opening new investment opportunities and supporting sustainable development. [6]