The European Commission’s 2020 hydrogen strategy has a big focus on importing ‘green’ renewables-based hydrogen from its neighbourhood (North Africa and Ukraine). Since the recent invasion of Ukraine and the subsequent need to reduce dependency on Russian gas, the EU has doubled its import targets to 10 million tonnes per year by 2030, as per the RePowerEU communiqué.

A report by Corporate Europe Observatory and Transnational Institute titled “Morocco, Algeria, Egypt: Assessing EU plans to import hydrogen from North Africa” examines the three North African countries that in recent years are increasingly focused on hydrogen, based in significant part on the interest of the EU and its corporations. Morocco, Algeria and Egypt are all planning to manufacture green hydrogen and hydrogen-based products, and ship them to the EU via boats and pipelines, to help meet this projected demand. But how feasible are such plan, how much would they cost, and would they be the best use of renewables in those countries?

There are big question marks over whether green hydrogen can ever be exported at sufficiently attractive prices, given the high production and transportation costs.

Using intermittent renewables to power electrolysers will lead to higher costs, but connecting to the grid to mitigate against this could further increase costs, as well as the CO2e footprint. It would also undermine the EU’s criteria for green hydrogen.

Shipping green hydrogen by sea takes three times the energy to liquify it as natural gas requires, while the same volume of tanker would only carry 27% of the energy. Also, 0.2% of the hydrogen would boil off every day while being shipped.

Transporting hydrogen via pipeline damages the pipes themselves, and the electronic equipment within them. The density of hydrogen would require tripling the energy used, and thus also the cost of pumping it through the pipelines. There will also be high fugitive emissions.

Green hydrogen could cost as much as 11 times more than natural gas per unit of energy at prices before the winter energy crisis and the invasion of Ukraine, even before storage and transportation. Hydrogen is expensive to distribute via shipping and pipeline, which is why today the large majority of it is manufactured at the point of consumption. Realistically, is Europe going to be willing to pay that very significant price difference?

North African governments and firms should therefore be wary of promises of large export markets for expensive to manufacture and ship green hydrogen, and the synthetic fuels made from it.

In oil and gas producing Algeria and Egypt, the hydrogen projects being explored are not just based on renewable electricity (‘green’), but also on gas with Carbon Capture Storage (‘blue’). Blue hydrogen is still double the price of unabated (‘grey’) hydrogen, and has the significant problem of high CO2e emissions, especially if the captured CO2 is used for enhanced oil recovery.

As all three countries examined have significant fertiliser industries, and either produce or import large quantities of grey ammonia, greening this domestic use could have a significant short-term climate impact before transitioning to agricultural practices that are not so fertiliser intensive.

The renewable electricity generated by these countries could also be better used to displace domestic fossil fuel power generation and meet local energy needs, while interconnectors with neighbouring countries – and eventually the EU – could help balance grids.

It makes little sense for Morocco, Algeria or Egypt to use their renewable electricity to make hydrogen and products from hydrogen, then ship them to Europe at significant loss of energy, so that the EU can achieve climate emissions reductions. And would European consumers be prepared to foot the very significant bill? The EU may need to re-examine its hydrogen strategy, in particular its green import targets, and reassess the feasibility and cost of achieving them.


  • Morocco which has an abundance of wind and solar resources, has recently developed a Green Hydrogen Roadmap, as well as other policies and international collaborations on hydrogen.
  • Morocco aims to replace ammonia imports with local green production for its national fertiliser industry. Despite being one of the world’s top five fertiliser exporters and possessing over 70% of the world’s phosphate reserves, Morocco still imports 1.8 million tonnes of grey ammonia annually to provide nitrogen for its fertilisers, primarily from Russia.
  • Beyond eliminating high ammonia emissions, other touted uses of green hydrogen don’t hold up to scrutiny.
  • The most obvious thing for Morocco to do with renewable electricity is to use it to replace the over 27 TWh of electricity that the country generates from coal annually. Coal generation emits a metric megatonne of CO2 per TWh of generation – so 27 MT of CO2 could be directly avoided annually if coal generation were replaced with renewables. Morocco is aiming to generate 52% of its electricity from renewables by 2030.
  • More problematically, Morocco is considering shipping green hydrogen exports in conjunction with IRENA. While short-sea hydrogen shipping isn’t quite as challenging as deep-sea shipping due to the shorter routes, nevertheless the technical and economic challenges persist.


  • Algeria plans to gradually switch its EU exports from natural gas to green and blue hydrogen, with interest from European partners.
  • Algeria is a country whose economy is heavily dependent on oil and gas exports, with an oil rent of 14.39%. But as the costs of both shipping and pipelines show, hydrogen is expensive to distribute, which is a significant factor in why the large majority of it is manufactured at the point of consumption today. Replacing natural gas exports with hydrogen appears unlikely, but Algeria does have value propositions for both green energy and green hydrogen.
  • Algeria already has LNG export shipping facilities which could be converted, at considerable expense, to manage hydrogen.
  • Eni’s green hydrogen solar project is predicted to cost 11 times more per unit of energy than natural gas, even before distribution.
  • Eni is also looking at blue hydrogen, which will cost more than double grey (unabated), and will be five times the cost of natural gas per unit of energy, with significant methane emissions.
  • Algeria’s 2020 energy transition plan targets 25 GW power generation from blue and green hydrogen by 2050, but as the analysis shows, regardless of how the hydrogen is generated, using it for power generation would cause energy prices to skyrocket, while using blue hydrogen would also generate large carbon emissions.


  • Egypt is not as reliant on oil and gas as Algeria, but direct revenues still represent 4% of GDP. The country has been growing its natural gas exports, including LNG, with new off- shore discoveries in the Mediterranean likely to add to this. However, the country does aim to generate 42% of its energy from renewables by 2035.
  • Green hydrogen is seen as a key economic development pathway. The EBRD is helping, while Egypt is already providing fiscal support measures. In early 2022, Egypt’s Ministry of Electricity and Renewable Energy and Ministry of Petroleum and Mineral Resources reached an agreement with the EBRD to develop a hydrogen strategy, expected by mid-2022. Given the EBRD’s positive view of hydrogen as an energy carrier (substituting natural gas), rather than as a chemical feedstock, it is reasonable to assume the resulting strategy will take a similar approach
  • Maersk is involved in a project developing hydrogen-based shipping fuels to replace polluting bunker fuel but they face challenges:
    • Green methanol is toxic, has half the energy density of bunker fuel and could cost around five times as much,
    • Green ammonia is also toxic, with spills on a ship potentially life threatening, and will cost almost four times as much as marine fuel.
  • Numerous European companies are involved in green and blue hydrogen export projects around Suez Canal Economic Zone.
  • Using blue hydrogen for ammonia will keep emissions high, which may also limit Egypt’s ability to export it, as climate-related trade measures such as the EU’s proposed carbon border adjustment mechanism will penalise high-carbon imports.


The European Commission is looking to import large quantities of green hydrogen from North Africa. However, this study demonstrates that for the case of Morocco, Algeria and Egypt, big question marks remain over whether green hydrogen will ever be exported at attractive prices due to high production and transport costs.

The complete report can be accessed here