Tunisia’s green hydrogen plans took a quantum leap forward in late May as international investors unveiled two massive projects with the combined potential to meet the government’s entire 2030 production target.

TE H2, a joint venture between French oil major TotalEnergies and its subsidiary EREN, and Austrian gas supplier Verbund, signed a memorandum of understanding (MOU) with the government to study development of a project called ‘H2 Notos’ in the south, where solar irradiation is highest and population sparsest. The project would produce 200,000t/yr by 2030, potentially rising to up to 1mt/yr. It would feed into the SouthH2 Corridor—with Verbund, an official ‘supporting partner’ of the midstream scheme, responsible for coordinating onward transport to Central Europe. Limitations on the corridor’s initial stated capacity of 4mt/yr put a premium on early movement by putative users.

Tunisia’s renewables buildout has been glacially slow

In a second project, Saudi Arabia’s state-affiliated clean energy champion ACWA Power signed an MOU for a three-phase project with the same startup capacity—requiring an initial 4GW of renewables and rising to 12GW on completion. Commercial logic notwithstanding, ACWA’s Tunisian commitment aligns with Riyadh’s increasing use of investment as a foreign policy tool, to nurture or shore up diplomatic alliances. The Kingdom provided an emergency $500m financial package to Tunis in July to help stave off a foreign exchange and budgetary crisis.

In October, the government published its Germany-sponsored National Green Hydrogen Strategy—with headline targets to produce 320,000t/yr by end-decade, 94% for export, and 8.3m t/y by mid-century, of which 6mt would be sent abroad.

SouthH2 Corridor

The gathering momentum over the past nine months has coincided with that behind the SouthH2 Corridor, a project formally launched in May 2023 by the operators of the Italian, German and Austrian gas networks. The project calls for the development of a 3,300km pipeline network—more than 70% of which would comprise repurposed existing pipelines—carrying 4mt/yr of green hydrogen from North Africa to the three countries’ industrial hubs for use in carbon abatement.

Italy’s Snam, one of the companies involved, jointly owns the Transmed pipeline, which delivers gas from Algeria via Tunisia and Sicily to mainland Italy. The corridor scheme attained prized designation as a ‘Project of Common Interest’ by the European Commission in December, conferring streamlined approvals processes and access to common EU funding. Startup is scheduled by 2030.

The development of green hydrogen production will require an accelerated buildout of renewable power. The country’s potential for large-scale renewables production has long been recognised both internally and externally. Domestic enthusiasm for renewables arose well before global decarbonisation pressures took hold. It was driven by fossil-fuel poverty, with declining oil production forcing increasing import dependence—chiefly on Algerian gas, used for more than 95% of power generation.

Slow progress

A target to have 30% of electricity generated from clean sources by 2030, quantified at 8.4GW, was adopted back in 2009. The first wave of EU interest in tapping its near-neighbour’s superior climactic resources manifested in the moribund and controversial Desertec Initiative, launched in 2009 and abandoned four years later, which envisaged the continent being supplied with low-cost carbon-free electricity generated from a network of renewables projects across North Africa.

However, Tunisia’s actual renewables buildout has been glacially slow. Installed capacity stood at 817MW at end-2023, only 500MW higher than a decade prior, as a result of persistent political instability, sclerotic bureaucracy and unclear legal frameworks.

The focus of recent political will around clean energy development has thus been on its acceleration, though concrete plans for green hydrogen development are emerging later than those of its neighbours, most notably Morocco.

Tunisia is beset with a plethora of overlapping, sometimes quarrelling state agencies and associated rules

Indeed, from the outset, mounting interest has been primarily externally-driven—born of Europe’s urgent quest for alternatives to Russian gas following Moscow’s invasion of Ukraine in February 2022 and of the RePowerEU strategy conceived in its wake, which envisages the bloc importing 10mt/yr of carbon-free hydrogen by 2030. Later that year, Germany’s GIZ was contracted by Berlin for a three-year project to assist Tunisia’s Ministry of Industry, Mines and Energy to lay the foundations for green hydrogen development. The project included drawing up a regulatory framework, helping enlist private-sector participation and conceiving an overarching long-term strategy.

Despite the sudden surge of enthusiasm, implementation of the projects will face the same domestic obstacles dogging pure renewables development, compounded by the challenges of drawing up and slotting in another layer of regulatory bureaucracy. Tunisia is already beset with a plethora of overlapping, sometimes quarrelling state agencies and associated rules.

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Author: Clare Dunkley