According to a recent report commissioned by CEO and the Transnational Institute, the EU’s ambition to dramatically boost renewable hydrogen imports from North Africa is neither cost-nor energy-efficient nor instead diverts renewable power away from local needs and climate objectives.
Renewable hydrogen might be up to 11 times more expensive than natural gas, according to a report conducted by energy expert Michael Barnard, and that’s before storage and transportation expenses are added in.
Big Oil and Gas can slip hydrogen from natural gas via the back door thanks to the EU’s unrealistic import targets, using green hydrogen as a front to keep drilling and selling their core product.
The European Commission’s 2020 hydrogen policy places a strong emphasis on importing “green” renewable-based hydrogen from the region (North Africa and Ukraine). According to the RePowerEU communiqué, the EU has raised its import ambitions to 10 million tonnes per year by 2030, after the recent invasion of Ukraine and the need to minimize reliance on Russian gas.
This research looks at three North African nations that have been more interested in hydrogen in recent years, thanks in part to the EU and its firms. To assist satisfy this expected need, Morocco, Algeria, and Egypt are all intending to create green hydrogen and hydrogen-based goods and send them to the EU through boats and pipelines. But are such ideas practical, how much would they cost, and would they be the most efficient use of renewables in those countries?
Given the high manufacturing and transportation expenses, there are serious doubts over whether green hydrogen can ever be exported at sufficiently favorable prices:
Using intermittent renewables to power electrolyzers will increase expenses, but connecting to the grid to prevent this will increase costs and CO2e emissions even more. It would also jeopardize the EU’s green hydrogen requirements.
Green hydrogen requires three times the energy to liquefy than natural gas, yet a tanker carrying the same amount of energy would only transport 27% of the energy. Furthermore, 0.2 percent of the hydrogen would boil away every day as it was transported.
The pipes and the electrical equipment within them are damaged when hydrogen is transported by pipeline. The density of hydrogen would need a threefold increase in energy consumption, as well as the expense of pumping it via pipes. There will be a lot of fugitive emissions as well.
Green hydrogen might be 11 times more expensive per unit of energy than natural gas, even before storage and delivery, at rates before the winter energy crisis and the invasion of Ukraine. Hydrogen is expensive to freight and transport through the pipeline, which is why the vast majority of it is now produced at the point of use. Will Europe, really, be willing to pay that large price difference?
North African governments and businesses should be suspicious of claims of vast export markets for green hydrogen, which is expensive to produce and ship, and the synthetic fuels created from it.
Hydrogen projects in oil-and-gas-producing Algeria and Egypt are not just based on renewable power (‘green’), but also on gas with carbon capture and storage (‘blue’). Blue hydrogen is still twice as expensive as untreated (‘grey’) hydrogen, and it has a considerable CO2e emissions concern, particularly if the collected CO2 is utilized for improved oil recovery.
Because all three nations studied have big fertilizer industries and create or import considerable amounts of grey ammonia, greening this domestic usage might have a short-term climate benefit before moving to less fertilizer-intensive farming methods.
Interconnectors with neighboring nations – and eventually the EU – might assist balance networks, while renewable electricity generated in these countries could be better leveraged to supplant domestic fossil fuel power output and fulfill local energy demands.
It makes little sense for Morocco, Algeria, or Egypt to utilize renewable power to produce hydrogen and hydrogen-based goods, then export them to Europe at a considerable energy loss in order for the EU to reduce climate emissions. And, if so, would European customers be willing to foot the bill? The EU’s hydrogen policy, particularly its green import objectives, may need to be revisited, as well as the practicality and expense of fulfilling them.
Morocco
- For its national fertilizer sector, Morocco wants to replace ammonia imports with domestic green production.
- Other claimed uses of green hydrogen, aside from reducing excessive ammonia emissions, do not hold up to inspection.
Algeria
- Algeria intends to progressively transition its EU exports from natural gas to green and blue hydrogen, with European partners showing interest.
- Even before distribution, Eni’s green hydrogen solar project is expected to cost 11 times more per unit of energy than natural gas.
- Eni is also considering blue hydrogen, which will cost more than twice as much as grey hydrogen (unabated) and be five times as expensive as natural gas per unit of energy, with considerable methane emissions.
Egypt
- Green hydrogen is viewed as a critical road to economic progress. The EBRD is assisting, and Egypt is already giving budgetary assistance.
- Maersk is working on producing hydrogen-based marine fuels to replace harmful bunker fuel, but they’re up against several obstacles:
- Green methanol is poisonous, has half the energy density of bunker fuel, and might be five times as expensive.
- Green ammonia is highly hazardous, and spills on a ship might be fatal. It will also cost nearly four times as much as marine gasoline.
- Around the Suez Canal Economic Zone, several European firms are active in green and blue hydrogen export projects.
