Deloitte: North Africa has huge potential for 'green hydrogen

According to AFP on August 17, a recently released report said that by 2050, North Africa could become the main export of "green hydrogen", Europe will be its main market. The report predicts the future of the "green hydrogen" industry, which is still in its infancy.

"' Green hydrogen 'will redraw the global energy and resource landscape as early as 2030 and create a $1.4 trillion annual market by 2050," according to a report by accounting consultancy Deloitte.

Hydrogen can be produced from natural gas, biomass or nuclear power. Hydrogen fuel is considered "green" when hydrogen molecules are separated from water using electricity generated from renewable sources such as solar and wind that produce no carbon emissions. Currently, less than 1% of global hydrogen production meets the "green" standard. But the climate crisis - combined with private and public investment - has spurred rapid growth in the sector.

The Hydrogen Council, a lobby group, lists more than 1,000 hydrogen projects in the pipeline around the world. The commission says projects launched by 2030 will require about $320 billion in investment.

According to the Deloitte report, by 2050, the main regions exporting "green hydrogen" are likely to be North Africa ($110 billion worth of "green hydrogen" exported annually), North America ($63 billion), Australia ($39 billion) and the Middle East ($20 billion).

It can be argued that management consultants' reports largely reflect the financial interests of their corporate clients, including some of the world's largest carbon emitters.

But the need to meet climate goals and generous subsidies are driving up demand for all kinds of clean energy, including "green hydrogen."

The long-haul aviation and shipping industries are also keen to use hydrogen as an alternative to fossil fuels - because the kind of batteries that power road vehicles are not a viable option for both.

The emergence of a market for clean 'green hydrogen' could also make the sector more inclusive for developing countries, the report said.

It could also, for example, shift the steel industry in the "Global South" away from coal.

For now, however, 99% of global hydrogen production is still "gray." This means that hydrogen is produced by splitting methane molecules, and no matter which energy source is used to drive this process, it releases greenhouse gases.

True "green hydrogen" uses electricity from renewable energy sources to release the hydrogen in carbon-free water molecules.

Sebastian Duguet, head of Deloitte's Energy and modeling team and a co-author of the report, says this may be where North Africa can play an important role. The report is based on data from the International Energy Agency.

Duguet told AFP: "We are seeing some North African countries (like Morocco or Egypt) looking at hydrogen. Those countries are announcing 'hydrogen strategies', just a few years after the EU and the US."

He also noted that "Morocco has a very large potential in wind energy, which is often overlooked, and also in solar energy." Egypt has the capacity to become a major exporter of hydrogen to Europe by 2050, thanks to the existing gas pipeline, "which can be converted to transport hydrogen."

Thanks to Saudi Arabia's many sunny lands, it has the potential to produce 39m tonnes of low-cost "green hydrogen" by 2050 - four times its domestic needs - which would help diversify the economy away from oil, the report said.

The report predicts that by 2040, the momentum for investing in carbon capture and storage technology as a solution to emissions from methane-to-hydrogen processes will come to an end. The oil-rich Gulf states, as well as the US, Norway and Canada, are now pursuing this strategy. Hydrogen produced in this way is labeled "blue" rather than "green."