Egypt

Country: Egypt

Document type: National Strategy

Title: National Low-Carbon Hydrogen Strategy (State Information Service report)

Published: August 2024

National Strategy

To support development of the national strategy, in November 2022 at COP27 hosted by Egypt, the State Information Service reported that the Egyptian Government announced the framework of Egypt’s low-carbon hydrogen strategy.

In November 2023, media reporting indicated that the Prime Minister approved the national strategy for green hydrogen during his meeting with the National Green Hydrogen Council.

Media reporting of the published national strategy reports the objective of positioning Egypt to be able to access 5-8% of the global hydrogen market by 2040.  It is reported the strategy envisages a phased approach, including

  • Pilot projects in the 2020s
  • Scale-up phase in the 2030s, and
  • Full implementation in the 2040s

According to media reporting, the strategy notes that if Egypt is to account for up to 8% of the global hydrogen market by 2040 (Green Scenario) annual production of hydrogen in Egypt in that year would be in excess of 9 million tonnes (with 5.6 million tonnes for export). In the Central Scenario, total annual hydrogen production in 2040 is reported as in excess of 5.5 million tonnes (with 3.75 million tonnes for export). Electrolyser capacity in 2040 in the Central Scenario is reported at 48 GW.

The National Council for Green Hydrogen, established in 2023, is to oversee the implementation of the strategy.

Supporting measures

In August 2022, the State Information Service reported that the Egyptian Government signed seven Memorandums of Understanding (MoUs) to establish industrial complexes to produce green hydrogen in the Ain Sokhna Industrial Zone. The pacts were signed between a number of governmental entities, including the New and Renewable Energy Authority (NREA), the General Authority for Suez Canal Economic Zone (SCZONE), the Egyptian Electricity Transmission Company (EETC) and the Sovereign Fund of Egypt, and seven companies and international consortiums involved in the production of new and renewable energy.

In November 2022, during COP27, the EU and Egyptian Governments signed a bilateral Memorandum of Understanding (MoU) on a strategic partnership on renewable hydrogen. The MoU signature followed the Joint Statement issued earlier by the EU and Egyptian Presidents at COP27. The strategic partnership is seen as serving as a central block in building an EU-Mediterranean Renewable Hydrogen Partnership. The MoU is intended to serve as a framework to support long-term conditions for the development of a renewable hydrogen industry and trade across the EU and Egypt, including infrastructure and financing.

In November 2022, during COP27, media reports indicate the Egyptian Government signed several framework agreements with international companies to construct green hydrogen and ammonia facilities in the Suez Canal Economic Zone.

In December 2023, the State Information Service reported that the Energy and Environment Committee of the House of Representatives had approved a government-drafted bill that provides for tax and non-tax incentives for green hydrogen projects and its derivatives. In January 2024, the State Information Service reported that Parliament had approved the draft law. Media reports provided specifics on the law noting, amongst other things, various tax incentives to green hydrogen projects and their expansions, including an investment cash incentive the “Green Hydrogen Incentive,” ranging from 33% to 55% of the value of the tax paid when declaring income from the project’s direct activities or expansions, depending on relevant circumstances. Other incentives reported include exemptions from value-added tax for equipment, tools, machines, devices, raw materials, and supplies, except passenger cars. The value-added tax for exports of green hydrogen and derivatives projects is reported as set at “zero percent”.

In February 2024, the State Information Service reported that the Egyptian Government signed seven cooperation agreements with international companies to develop green hydrogen and renewable energy projects in the Suez Canal Economic Zone.

In June 2024, media reports indicated that the Egyptian government has designated about 41,700 square kilometres to the New and Renewable Energy Authority (NREA) to facilitate renewable energy projects aimed at producing hydrogen.  The reporting included comments from NREA’s Chairman that the allocation of project sites for hydrogen production were covering 27 Memoranda of Understanding signed with various investors.

 

Reviewed: September 2024