Egypt’s parliament has recently ratified a comprehensive set of incentives aimed at propelling the nation into the forefront of the burgeoning green hydrogen export market.
This move signifies Egypt’s strategic ambition to capitalize on its advantageous geographical position and leverage renewable energy resources to drive economic growth.
The incentives package unveiled by the Egyptian government is designed to attract substantial investment in the renewable hydrogen sector by offering a range of financial benefits and administrative facilitations. Key incentives include:
- Financial Concessions: Eligible projects stand to benefit from tax rebates ranging from 33% to 55% on income generated, along with exemptions from VAT on inputs, export VAT, real estate taxes, and other fees.
- Administrative Streamlining: The approval process for renewable hydrogen projects will be simplified, with a single certificate issued by the Egyptian government. Moreover, producers will have the flexibility to employ foreign workers for up to 30% of their workforce.
- Land and Storage Rights: Projects will enjoy a 25% discount on usufructuary rights and a 20% discount on storage rights, further enhancing their financial viability.
Renewable hydrogen production relies on advanced electrolysis technology, utilizing renewable energy sources such as solar and wind to split water molecules into hydrogen and oxygen. Egypt’s abundant solar irradiance and wind resources make it well-suited for large-scale green hydrogen production, positioning the nation as a potential powerhouse in the global market.
Egypt’s strategic location and ambitious incentives put it in a prime position to meet the rising global demand for green hydrogen. With the European Union’s RePowerEU initiative targeting 10 million tonnes of hydrogen imports by 2030, Egypt’s proximity to European markets offers a competitive edge. However, the nation faces stiff competition from other hydrogen-producing countries, particularly Oman, which introduced similar incentive schemes in 2022.
As Egypt embarks on its green hydrogen journey, navigating challenges and seizing opportunities will be paramount. Collaborative efforts between government, industry stakeholders, and international partners will be crucial for driving innovation, overcoming obstacles, and establishing Egypt as a key player in the global green hydrogen market.
