Hosting Cop27 at a time when clean energy development is becoming central to its domestic economic strategy was a stroke of good fortune for Egypt. And it exploited the opportunity to the full. The government firmed up eight provisional deals with foreign investors to develop green hydrogen production facilities and set out a strategy to become a leading supplier of the energy carrier.

The broad contours of Cairo’s green hydrogen strategy have been gradually emerging over the past two years. The North African country boasts bountiful resources of sun, wind and spare land, and a massive carbon-intensive fertiliser industry requiring abatement. It also has proximity to a European continent desperate to secure long-term alternatives to Russian gas, and ownership of the Suez Canal, one of the world’s busiest waterways, at a time when the need to reduce emissions from the shipping industry is gaining attention.

8pc – Egypt’s target share of global green hydrogen market

More than a dozen international firms—often with experience in the country’s successful renewables buildout and from countries with which Cairo enjoys strong political ties—have announced provisional plans to develop production facilities for green hydrogen, ammonia and other hydrogen-based fuels in the Suez Canal Economic Zone (SCZone).

Nevertheless, the government had been promising for months to codify its plans into a comprehensive strategy, developed in cooperation with multilateral financial institution the European Bank for Reconstruction and Development for unveiling at Cop27.

The strategy, while vague in parts, signalled the scale of Cairo’s ambitions. According to a cabinet statement released just before Cop27, green hydrogen is seen contributing as $10–18bn to Egypt’s GDP by 2025. By 2040, it hopes to secure an 8pc share of the global market.

Reflecting increasing European enthusiasm for collaboration with Egypt and other North African countries to ensure the supplies necessary to meet EU decarbonisation targets, German chancellor Olaf Scholz co-chaired a green hydrogen roundtable with Egyptian president Abdel Fateh el-Sisi .The Egyptian head of state also joined Belgian prime minister Alexander de Croo to launch the Global Renewable Hydrogen Forum, a consultative grouping of producing and consuming governments, investors and financiers.

Showstopper

Another showstopper was the signing of eight framework agreements with international investors to develop hydrogen and ammonia production facilities in Suez—firming-up memorandums of understanding (MoUs) inked over the past year and confirming Egypt as the leader in efforts by countries across Middle East and North Arica to secure a share of the fledgling market.

The ability to attract the hydrogen industry’s emerging leaders validates the country’s appeal: a pact with Australia’s Fortescue Future Industries calls for the production of 330,000t/yr of green hydrogen using 7.6GW of renewables.

Also on display was Cairo’s ability to leverage its close relations with the wealthy Mideast Gulf states to garner clean energy investment: Abu Dhabi-owned Masdar confirmed plans for a 2GW green hydrogen plant in the Suez Canal Economic Zone, one of two it intends to build in the country, a week after announcing plans for a 10GW windfarm. Riyadh-based Alfanar also committed to a 500,000t/yr green ammonia scheme. Other Gulf investors are circling: Doha-owned QatarEnergy, backed by the Qatari sovereign wealth fund, is considering investing at least $1bn in a green hydrogen and ammonia project on the banks of the canal.

And Norway’s Scatec used Cop27 to nominally launch the first phase of its Suez project, which entails developing 15,000t/yr of green hydrogen capacity for use in producing up to 90,000t/yr of green ammonia at the existing fertiliser plants nearby owned by UAE and local co-investor Fertiglobe. SCZone projects planned by India’s Renew, France’s EDF and TotalEnergies, the UAE’s Amea Power and UK-based Globeleq also passed from MoU to framework agreement stage. Negotiators may lament a climate summit that largely failed in its headline ambitions, but Cairo will celebrate the event as a resounding success.

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Author: Clare Dunkley