Algeria’s national oil company Sonatrach and construction firm Tosyali have signed a Memorandum of Understanding (MoU) to explore green hydrogen production from renewable energy sources.
The agreement, signed by Sonatrach CEO Rachid Hachichi and Tosyali Chairman Fuat Tosyali signals a collaborative effort to assess the feasibility of green hydrogen production in Algeria. The initiative aims to use green hydrogen to manufacture green steel at Tosyali’s steel plant.
Algeria has set ambitious targets for its renewable energy sector, aiming to boost power generation to 15,000 MW and achieve 30% of its total energy mix from renewables by 2035. Sonatrach’s development of a 50MW green hydrogen pilot plant in Arzew is a step towards these goals.
The MoU’s feasibility study will play a crucial role in determining the practicalities of green hydrogen production in Algeria. While the collaboration between Sonatrach and Tosyali is a positive move, it is essential to scrutinize the viability of this venture. The global green hydrogen market is highly competitive, with established players like Europe, Australia, and the Middle East already making significant advancements.
Countries like Germany and Japan have made substantial investments in green hydrogen infrastructure, supported by clear regulatory frameworks and substantial government incentives. For instance, Germany’s National Hydrogen Strategy aims to invest €9 billion in green hydrogen projects, including the development of 5 GW of electrolyzer capacity by 2030. In contrast, Algeria’s efforts, while commendable, are still in nascent stages and require robust policy support and financial commitment to match such benchmarks.
For Algeria to achieve its renewable energy and green hydrogen goals, there must be a strong policy and regulatory framework. This includes incentives for renewable energy projects, streamlined permitting processes, and support for research and development. Learning from countries that have successfully integrated green hydrogen into their energy mix can provide valuable insights for Algeria.
