For Egypt, a nation with a rich history in energy production and a strategic geographical position, this burgeoning hydrogen revolution presents a unique opportunity. Recognizing this potential, Egypt has boldly charted its course with the unveiling of its National Low-Carbon Hydrogen Strategy.
Egypt’s Bold Hydrogen Vision
Aiming for a significant 5-8% share of the global hydrogen market by 2040, Egypt unveiled its National Low-Carbon Hydrogen Strategy in August 2024. This ambitious plan outlines two scenarios and a clear pathway for the nation to leverage its renewable energy potential and tap into the lucrative export market. The strategy envisions Egypt producing as much as 5.8 million metric tons of green hydrogen annually, a feat projected to attract up to $60 billion in investments.
The different types of hydrogen include grey hydrogen, primarily produced through steam methane reforming (SMR), where natural gas (methane) reacts with high-temperature steam to produce hydrogen and carbon dioxide. Blue hydrogen is also produced through SMR, using the same process. The difference is that blue hydrogen is lower in emissions and has carbon capture. Meanwhile, green hydrogen is produced through electrolysis, which uses electricity to split water (H2O) into hydrogen (H2) and oxygen (O2). When the electricity used for electrolysis comes from renewable energy sources like solar, wind, or hydropower, the entire process has zero or near-zero greenhouse gas emissions. The only byproduct is oxygen.
By leveraging its existing expertise in grey and electrolytic hydrogen production, as well as its established ammonia production and export infrastructure, Egypt can rapidly position itself as a prominent global hydrogen hub. Furthermore, its abundant renewable energy and gas reserves, coupled with its strategic geographic location, will enable Egypt to become a world leader as the demand for low-carbon hydrogen surges in the coming decades.
Recognizing Egypt’s strong renewable energy prospects, green hydrogen emerges as a promising method for generating low-carbon hydrogen. The viability of this approach hinges on both the extent of renewable power that can be harnessed and the implications for water usage. Meanwhile, achieving blue hydrogen production at scale is technically feasible only if the required carbon storage facilities are in place. Additionally, the cost-effectiveness of blue hydrogen relative to green hydrogen is subject to fluctuations in natural gas prices.
The burgeoning low-carbon hydrogen economy is projected to surge to at least double, and potentially nearly seven times, the current demand, with significant international trading anticipated. For Egypt, capturing a substantial share of this expanding market could inject a significant $10-18 billion into its GDP by 2040. Furthermore, increasing domestic value chain activities, such as expanding assembly within Egypt, presents an additional opportunity, according to the National Low Carbon Hydrogen Strategy.
Egypt’s Cabinet announced in March 2025 that the nation is pursuing the ambitious strategy in collaboration with the European Bank for Reconstruction and Development (EBRD) and the Arab Union for Sustainable Development and Environment (AUSDE). This strategy aims to secure 8% of the global market, leveraging Egypt’s capability to produce green hydrogen at the lowest cost globally. The Cabinet further noted a projected cost reduction from $2.7 per kg in 2025 to $1.7 per kg by 2050.
The Role of Hydrogen in Decarbonizing Egypt’s Future
Hydrogen presents a transformative alternative to conventional hydrocarbon fuels, offering a pathway to decarbonize energy-intensive industries and dramatically lower carbon emissions in transportation, manufacturing, and power generation. This shift towards hydrogen is essential for nations striving to achieve their climate targets and transition away from fossil fuels. For Egypt, embracing the hydrogen economy offers a distinctive chance to leverage its natural resources while simultaneously meeting domestic energy demands and unlocking significant export opportunities.
Egypt’s existing infrastructure presents immediate opportunities for low-carbon hydrogen adoption. For instance, the SMR hydrogen production currently used in Egyptian oil refineries could be replaced with cleaner alternatives. Similarly, the conventional natural gas reforming process for methanol production could be substituted with a method combining low-carbon hydrogen and CO2. Furthermore, hydrogen offers a direct replacement for natural gas as a fuel source in various industrial applications like furnaces, boilers, and kilns.
Egypt’s established position as a major ammonia exporter, with facilitating port infrastructure, offers a strong foundation for new opportunities. Exporting low-carbon or zero-carbon ammonia to Europe would provide a product compliant with the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM)for existing European ammonia markets. Additionally, this clean ammonia could serve as a carrier for hydrogen, allowing for reconversion back to hydrogen at European import terminals.
Egypt stands at a pivotal moment, poised to harness the transformative power of hydrogen to fuel its future. The nation’s ambitious strategy, leveraging its existing infrastructure, abundant renewable resources, and strategic partnerships, outlines a clear pathway to becoming a significant player in the global hydrogen market. While challenges remain in scaling production and optimizing costs, Egypt’s proactive approach and clear vision signal a strong commitment to realizing the vast economic and environmental benefits that the hydrogen economy promises.
