Abu Dhabi's renewable energy company Masdar and Hassan Allam Utilities have signed two preliminary agreements with Egyptian state-backed organisations to co-operate on the development of green hydrogen production plants in the Suez Canal Economic Zone and the Mediterranean coast.
In the first phase, the companies aim to establish a green hydrogen manufacturing unit that is capable of producing 100,000 tonnes of e-methanol annually for bunkering in the Suez Canal, Masdar said in a statement late on Sunday. The unit is expected to be operational by 2026.
The electrolyser facilities in the Suez Canal and on the Mediterranean could also be extended to up to 4 gigawatts by 2030 to produce 2.3 million tonnes of green ammonia for export and green hydrogen for local industries.
The agreements demonstrate the close relationship between the UAE and Egypt, said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Special Envoy for Climate Change and chairman of Masdar.
“These projects will build on the UAE’s and Masdar’s position as an early mover in the global hydrogen market and expand our capacity to deliver zero carbon energy solutions,” he said.
“As our two countries prepare to host the next two Cops [UN climate conferences], we look forward to working with our partners in Egypt to make practical advances in the energy transition that will provide significant benefits for the economy and the climate.”
Egypt has been building on its green hydrogen ambitions in recent months, especially as it is set to host the Cop27 climate summit in Sharm El Sheikh this November.
The country signed a $3 billion agreement this month with a consortium led by French firm EDF Renewables and Egyptian company Zero Waste to develop a green hydrogen megaproject in Ain Sokhna on the Red Sea that will produce up to 350,000 tonnes of green fuel annually for ships passing through the Suez Canal.
It also partnered with Norway’s Scatec in March to build the country’s first green ammonia plant at a cost of $5bn, with a production capacity starting at 1 million tonnes annually, increasing to 3 million tonnes.
Egypt has abundant solar and wind resources that allow for the generation of renewable power at a competitive cost, a key enabler for green hydrogen production.
The North African country is working to encourage investment in green energy projects and accelerate the energy transition process in the region, said Egyptian Prime Minister Mostafa Madbouly.
The country is also reviewing its national energy strategy and plans to add green hydrogen to its mix, the statement said.
Egypt's Ministry of Electricity expects to unveil a green hydrogen strategy by October.
The latest agreements were signed in the presence of Mr Madbouly and Dr Al Jaber. Also attending were Dr Mohamed El Markabi, Egyptian Minister of Electricity and Renewable Energy, and Dr Hala El Said, Minister of Planning and Economic Development and chairman of the Sovereign Fund of Egypt.
Egypt is set to emerge as a hub for green hydrogen production since it is well placed to target the bunkering market, the statement said.
The country can also boost exports to Europe as it is located in proximity to markets where demand for green hydrogen is expected to grow.
“These agreements represent a vital step forward in the development of the green hydrogen economy for both the UAE and Egypt and will play a significant role in our two nations’ decarbonisation efforts,” said Mohamed Al Ramahi, chief executive of Masdar.
“By working with partners such as Hassan Allam Utilities, we can help the green hydrogen market achieve its full potential over the coming years and play its part in supporting the global energy transition.”
Hydrogen is projected to account for 12 per cent of global energy use and 10 per cent of carbon dioxide emissions reductions by 2050, driven by climate change urgency and countries’ commitments to net zero, according to the International Renewable Energy Agency.
Current annual hydrogen sales represent a market value of about $174bn — which already exceeds the value of annual trade in liquefied natural gas — and could grow to $600bn by 2050.