In 2023, Egypt adopted its National Green Hydrogen Strategy. Through this plan, the country aims to capture between 5% and 8% of the global hydrogen market by 2040, targeting an annual production of around 5.6 million tonnes of green hydrogen by that year. A central pillar of Egypt’s strategy is the export of hydrogen derivatives, particularly green ammonia, which represents a major avenue for integration into global energy markets.
Enabling policy and investments conditions in Egypt
Egypt is advancing its Green Hydrogen Strategy through a combination of institutional, policy, and investment measures. The Egyptian government established the National Council for Green Hydrogen and its Derivatives tasked with overseeing the design and implementation of related policies. In order to attract investors, Egypt has introduced a package of incentives, including income tax reductions, VAT exemptions on imported equipment, and simplified licensing and approval procedures. For example, the Green Hydrogen Incentives Law No. 2 of 2024, for instance, provides significant tax incentives for new green hydrogen and derivatives projects in Egypt, including tax credits of 33-55% and tax exemptions. In addition, green hydrogen projects benefit from the so-called golden licence system, which offers single-window approvals from the Cabinet to simplify the administrative process for constructing and operating green hydrogen projects
Green Hydrogen Endeavors
These reforms have already paved the way for flagship projects such as Scatec’s green hydrogen facility in Ain Sokhna, which targets industrial and export markets, and a €7 billion green ammonia complex at Ras Shokeir. The latter project will be developed in three phases, with total investments estimated at €7 billion, fully financed by the private sector. When completed, it is expected to generate up to one million tons of green ammonia annually, positioning Egypt as a leading hub in the global clean energy market. The first phase, scheduled to launch in 2029, will be implemented by a partnership between EDF Renewables (France) and the Egyptian-Emirati company Zero Waste. This stage includes a €2 billion in direct investment to produce 300,000 tons of green ammonia per year. To support the project, a vast area of 368 square kilometers has been allocated for solar and wind energy generation, alongside 1.2 million square meters designated for the production plant itself.
Egypt’s Potential
Egypt holds significant opportunities to expand its green hydrogen production and export: Egypt is at a crossroads with a strategic location bordering both Africa and Asia, with the vital maritime route of Suez Canal, makes it well-placed to export green hydrogen/ammonia to Europe and Asia. Egypt benefits from an abundance of renewable energy resources available at highly competitive prices, with recent solar projects in Aswan delivering electricity at around 2–3 US cents per kWh and wind projects averaging about 2.4 cents per kWh. These costs place Egypt close to Saudi Arabia, where the Dumat Al-Jandal wind farm produces power at roughly 1.99 cents per kWh and the Sakaka solar project achieved about 2.34 cents per kWh. The United Arab Emirates has set some of the world’s lowest solar tariffs, most notably the Al Dhafra Solar Project at 1.35 cents per kWh. By contrast, Morocco’s Noor Midelt I hybrid CSP-PV project is significantly higher at around 7 cents per kWh. Taken together, these figures highlight that while the UAE currently leads in ultra-low solar costs, Egypt remains highly competitive, especially compared to Morocco, and is well-positioned to leverage its abundant solar and wind resources for low-cost green hydrogen production.
Egypt’s strategic collaboration and partnerships in the green hydrogen sector
Egypt is accelerating its green hydrogen ambitions through strong international partnerships that bring in advanced technology, financing, and access to export markets. For example, Scatec, the Norwegian company specialised in renewable energy, in collaboration with Fertiglobe, the Sovereign Fund of Egypt, and Orascom Construction, is developing the first integrated green hydrogen plant in Africa consisting of 100 MW electrolysers. The project will be powered by about 270 MW of solar and wind power capacity to produce renewable hydrogen to be used as feedstock for the production of up to 90,000 tons of green ammonia per year in Fertiglobe’s existing ammonia plants in Ain Sokhna, Egypt.
Another example of Egypt’s strategic partnerships in the development of green hydrogen is the agreement between Masdar and Hassan Allam Utilities to build a green hydrogen production plant to produce 100,000 tonnes of e-methanol per year for bunkering in the Suez Canal in the first phase, that is expected to be operational in 2026. In the following stages, the electrolysis capacity in the Suez Canal Economic Zone and on the Mediterranean could be increased to 4 GW by 2030, allowing for the production of 2.3 million tonnes of green ammonia for export and the supply of green hydrogen to local industries.
Way forward
Egypt’s growing portfolio of green hydrogen initiatives underscores the country’s ambition to position itself at the forefront of the global energy transition. However, transforming this potential into tangible outcomes requires navigating several critical challenges. Securing diversified financing beyond loan-based financing remains crucial, particularly if the capital-intensive green hydrogen projects are to scale from pilot phases to commercial production. Furthermore, according to a recent report that was issued by the Green Hydrogen Organisation (GH2) in 2025, Egypt has expanded renewable land allocations to over 41,000 sq km – enough for 180 gigawatts (GW) – the current grid can handle only around 36GW today while storage capacity is limited to 60GWh. Therefore, Egypt needs to upgrade its national power grid, build more solar and wind farms to power the hydrogen production facilities, provide sufficient water supply for the desalination plants, and increase investment for the manufacturing of electrolyzes, while working to localize their development in Egypt.
In addition, given that 95 percent of hydrogen production plans in Egypt are geared for exports leaving domestic industry largely untapped. Therefore, it is crucial to ensure that the benefits of green hydrogen projects extend beyond foreign partners to local communities—for instance, by linking hydrogen hubs to job creation, workforce training, and integration with domestic industries such as fertilizers, steel, and chemicals. Without embedding hydrogen into local industrial value chains, the country risks remaining merely a transit corridor, rather than developing a robust, domestic green hydrogen ecosystem.
