Morocco has published long-awaited plans for project selection, incentives for developers and the state’s obligations regarding common infrastructure in a key step forward for a country widely tipped to become a green hydrogen production powerhouse.

The plans, set out by the Rabat government in early March in its ‘Offre Maroc’, will be studied in detail by the growing number of international investors keen to tap the country’s vast potential as a low-cost green hydrogen producer. Significant solar and wind resources, available land and proximity to Europe have positioned Morocco as potentially one of the world’s leading exporters.

The government claims to have received interest from almost 100 prospective investors and aims to sign the first land allocation contracts by the end of September.

Morocco created National Hydrogen Commission in 2019 and two years later adopted a National Hydrogen Strategy—aimed at fulfilling domestic and export demand for green hydrogen and its derivatives of 4TWh and 10TWh respectively by 2030, 22TWH and 46TWh by 2040 and 40TWh and 115TWh by 2050.

However, snowballing international interest has left the regulatory system playing catch-up. The Offre Maroc is designed to plug the gap.

Key provisions

Key provisions in the Offre Maroc include the designation of 1m hectares of state-owned land for green hydrogen projects, which will be allotted to qualifying investors in 10,000–30,000-hectare plots under a proposed 300,000-hectare first-phase allocation process.

Developers will then have six months (although this can be extended) to carry out pre-FEED studies—firming up envisaged size, end-products, timeframe, and returns of integrated projects spanning power-generation through to the conversion of the green hydrogen into ammonia and other derivatives.

The government claims to have received interest from almost 100 prospective investors

Assuming a positive preliminary conclusion, investors will enter negotiations to conclude an ‘advanced studies agreement’ with the authorities—allowing up to 18 months for in-depth studies, including full FEED work, ahead of taking FID.

The document also mandates the relevant state agencies to study the shared electricity, water, internal transport and export infrastructure required by the sector—including transmission lines carrying renewables produced chiefly in the south to production facilities elsewhere; the creation of hydrogen storage facilities; and the conversion of pipelines from natural gas to hydrogen transportation for ultimate potential connection to the European network.

The Moroccan Agency for Sustainable Energy has been designated the chief state interlocutor for investors. Projects given the go-ahead through the Offre Maroc framework will be entitled to the incentives enshrined in a broader Investment charter applicable across various priority sectors adopted in December 2022—including exemption from import duties and value-added tax on locally purchased goods and state support for up to 30% of capital costs.

Ventures are to be assessed not only on the obvious financial and technical metrics but also for their potential to spur wider domestic economic development and job creation through vertical or horizontal integration with local industries—though without setting rigid local content rules.

Projects

Several major schemes are already waiting in the wings. In December, Abu Dhabi-owned TAQA joined the queue, announcing plans for a $10b, 6GW integrated green hydrogen complex in the far southern Dakhla-Oued El-Dahab region, a month after France’s HDF unveiled an 8GW project in the same area in joint venture (JV) with local firm Falcon Capital. US-based CWP Global declared its hand early—launching the proposed 1mt/yr Amun project, in the Guelmim-Oued Noun region, in 2022.

A JV of Saudi Arabia’s Ajlan & Bros with the local Gaia Energy and Ireland-based Fusion Fuel have also outlined schemes. However, the most economically important project in the near term is the $7b green ammonia plant planned at Tarfaya on the west coast by state-owned phosphates and fertilisers titan OCP, which it aims to start up at 200,000t/yr in 2026, expanding to 1mt/yr a year later and ultimately 3mt/yr by 2032.

The plant is designed to both alleviate the enormous financial uncertainty arising from recently volatile international prices for the roughly 2m t/yr of grey ammonia the firm imports and insulate the business against the impact of carbon border taxes in Europe, its main market.

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Author: Clare Dunkley