Green Hydrogen Bridging The Energy Trans
Green Hydrogen Bridging The Energy Trans
Green Hydrogen Bridging The Energy Trans
OCTOBER 2020
AUTHORS
SWETHA RAVIKUMAR BHAGWAT
MARIA OLCZAK
ACKNOWLEDGEMENTS
This report has been produced by the Florence School of Regulation (FSR) for the Africa-EU Energy
Partnership (AEEP) as an introductory background paper to initiate discussions on transcontinental green
hydrogen opportunities between Africa and Europe. FSR experts involved in the execution of this report are
Swetha Ravi Kumar Bhagwat, Maria Olczak, Pradyumna Bhagwat, Andris Piebalgs and Ilaria Conti.
The report was developed by combining a literature review and an exclusive webinar including additional
experts. The work was enriched by peer series in consultation with the AEEP steering committee and reviews
graciously provided by the Department for Infrastructure and Energy at the African Union Commission
(AUC), by DG DEVCO, DG ENER, DG GROW at the European Commission, by the German Federal
Ministry of Economic Cooperation and Development (BMZ), by the Ministry of Electricity and Renewable
Energy of the Arab Republic of Egypt, by the Common Market for Eastern and Southern Africa (COMESA),
by the EU Technical Assistance Facility (EU TAF) and by FCH Joint Undertaking. The Secretariat of the
Africa-EU Energy Partnership coordinated the webinar as well as the review process.
Thomas Roos (Council for Scientific and Industrial Research South Africa) and Tobias Bischof-Niemz
(Enertrag AG) contributed to the webinar on 20th of May 2020, during which additional expert perspectives
were gained.
The following persons are thanked for their valuable inputs during the review process: Georgios Grapsas
(DEVCO), Olgerts Viksne (DEVCO), Cecile Leemans (ENER), Aleksander Vigne (ENER), Stephan Fox (EU
Delegation to AU), Atef Marzouk (AUC), Daniel d’Hoop, Michel Caubet and Federico Villatico (EU TAF),
Daniel Werner (GET.pro), Laura Gutierrez (GET.transform), Peter Kinuthia, Johan van den Berg and
Maximilian Heil (AEEP Secretariat).
2
© European University Institute, 2020. This text may be downloaded only for personal research purposes. Any
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Florence School of Regulation. If cited or quoted, reference should be made to the full name(s) of the author(s),
editor(s), the title, the year and the publisher. This publication was produced with the financial support of the
European Union. Views expressed in this publication reflect the opinion of the individual authors and do not
necessarily reflect the views of the European Union or the European University Institute.
© September 2020
European University Institute The Secretariat of the Africa-EU Energy
Badia Fiesolana I – 50014 Partnership (AEEP) is implemented by and
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giz.de
3
Table of Contents
EXECUTIVE SUMMARY ............................................................................................................................. 5
INTRODUCTION ........................................................................................................................................... 9
THE SOCIO-ECONOMIC TRANSITION IN AFRICA OPENS NEW OPPORTUNITIES .............................................. 10
OLD AND NEW CHALLENGES ........................................................................................................................ 11
WHY GREEN HYDROGEN? ............................................................................................................................ 12
TOWARDS A COMPREHENSIVE STRATEGY WITH AFRICA ............................................................................ 13
THE ROLE OF GREEN HYDROGEN IN THE ENERGY TRANSITION ........................................... 14
HYDROGEN TODAY ...................................................................................................................................... 15
HYDROGEN GOING FORWARD ..................................................................................................................... 15
POWER-TO-X PATHWAYS ............................................................................................................................. 17
HYDROGEN PRODUCTION AND SUPPLY ....................................................................................................... 18
EU-AFRICA HYDROGEN PARTNERSHIP ....................................................................................................... 21
HYDROGEN FOR AFRICA .............................................................................................................................. 21
BRIDGING THE EUROPEAN UNION AND THE AFRICAN UNION WITH GREEN HYDROGEN
.......................................................................................................................................................................... 23
IS GREEN HYDROGEN A WAY FORWARD FOR BOTH EUROPE AND AFRICA?................................................. 23
4
Executive Summary
In 2015, the Paris Climate Agreement and the UN Sustainable Development Goals (SDGs) propelled the world
into fast track mode towards achieving the sustainability goals. Three decades from now, the global energy
landscape will look completely different to today. With the standard of living improving, there is a greater use
of devices and services powered by a diversity of energy sources. Superimposed on this diversity, there is a
growing universal effort to achieve a rapid decarbonisation of the economy while making sure that no one is
left behind, as is addressed in SDG 7. Trying to achieve the decarbonisation goals on time means that, along
with the energy sectors, the use of energy in end-use sectors (transport, buildings and industry) must be
included. We need to widen the range of options being used, including attaining a fully networked system
providing security of energy supply and system flexibility, and the active engagement of consumers, which
goes beyond the current sector-specific approach. In this manner, an integrated approach is evolving with a
1
‘cross-sector nexus’ or ‘sector coupling.’
However, if the Paris Agreement objectives are to be met, countries need to raise their ambitions to ensure
they are on track. The launch of the European Green Deal is a step in that direction, with a focus not just on
Europe but also on external cooperation with neighbouring regions. This presents new development
opportunities for regions with high renewable energy potential, such as Africa. The production and trade of
green hydrogen – a versatile energy vector – could become a significant opportunity for economic and social
benefits for Africa to develop African society. It shows potential to assist with the post Covid-19 economic
recovery in Africa in the short term and to enable both Africa and Europe to complete their respective clean
energy transitions in the long term.
1
Refer to ANNEX 1 for definitions.
5
highlights the African Union as partner to cooperate on research and innovation to regulatory policy, physical
interconnections and technological development.
Uses: Currently, most of the demand for hydrogen comes from the chemical industry to produce ammonia for
fertilisers, followed by refining for hydrocracking and the desulphurisation of fuels. The hydrogen employed
can be replaced with green hydrogen. Future applications of green hydrogen could include its use to produce
and store electricity and perhaps serve as an alternative to diesel generators. In the transport sector, it can be
used as fuel for cars, heavy duty vehicles, aviation and shipping. It can be a source of heat for industry,
especially in hard to abate and electrify sectors such as steel, cement, aluminium production and residential
heating.
The special case of Africa: Many Europe-Africa joint projects are under way, for example Germany and
Morocco have announced the development of green hydrogen power-to-x projects, while companies such as
Enertrag in Germany aims to deploy 20 fuel cell buses using green hydrogen and Tiger Power in Belgium is
setting up hybrid solar-hydrogen minigrids in Uganda.
Demand: IRENA and the Hydrogen Council estimate the share of hydrogen in the total global final energy
consumption in 2050 will be in the range 6-18%. Increasing the role of renewables, particularly variable
renewables, in the power sector offers an opportunity to use the excess electricity from renewables to produce
green hydrogen via electrolysis, i.e. the power-to-x (P2X) pathway. Sector coupling via P2X pathways allows
not only direct applications of hydrogen but also applications in the production of synthetic fuels, such as
ammonia, methane, methanol etc., which can be used in other end-use sectors. The P2X demand potential for
2050 is estimated at 20,000 TWh, translating into 8,000 GW of P2X capacity.
The special case of Africa: Besides serving the global demand for green hydrogen, the continent could benefit
from an early adoption of hydrogen for various applications across end-use sectors. It could benefit from
Africa’s lack of old generation technologies and set up large scale renewables to produce green hydrogen and
harness the RE potential (~1,590,000 TWh/year) of the continent. A recent initiative launched by the German
Federal Ministry of Education and Research (BMBF) and African partners in the sub-Saharan region (SADC
and ECOWAS countries) called H2 Atlas-Africa aims to explore the potential of green hydrogen production
from the enormous renewable energy sources in the sub-regions.
In addition to socio-economic benefits such as jobs (300-700 for every 1GWe P2X), tax revenue, emission
reduction etc., green hydrogen could aid in addressing SDG7 challenges indirectly in the short run, first by
increasing the electrification rate in green hydrogen production regions and second by acting as an alternative
fuel to replace diesel generators and conventional cooking options. In the very long term, decentralised green
hydrogen-based communities could be explored. However, for the time being this option is not yet cost
competitive.
Technology: Currently, the most established method to produce green hydrogen is through electrolysis. This
process uses an electrolyser, a device which splits water into hydrogen and oxygen using electricity. According
to the Hydrogen Council, the decreasing cost of renewable energy and a growth in electrolysis capacity (55
times by 2025) are stimulating investments in green hydrogen production.
The special case of Africa: Water, a key resource in the production of green hydrogen is a critical
consideration for Africa. For every litre of water one cubic metre of hydrogen can be produced. Given that
water is not abundantly available in all parts of Africa, this allows for synergy (energy-water nexus) with
desalination initiatives, with green hydrogen plants acting as anchor off-takers for desalination plants.
Cost: According to IRENA, the current cost of producing (grey) hydrogen1 ranges from 1.5 to 2.5 USD/kg.
On the other hand, the cost of producing green hydrogen ranges from 2.5 to 7 USD/kg. However, in the best-
case wind scenario coupled with a low-cost electrolyser, green hydrogen competes with grey hydrogen at
approximately 1.5 USD/kg. In about 3.5 years, estimates show that green hydrogen produced using solar and
6
wind will range from 1 to 2 USD/kg. As the scale of production increases from MW to GW, costs are expected
to further decrease.
The special case of Africa: Taking the example of Morocco, a recent study found that the cost of producing
green hydrogen based on 2019 renewable electricity prices at 80% electrolyser efficiency with a CAPEX of
347 USD/kW is about 1.16 USD/kg.
Transport: In small quantities, hydrogen can be transported through existing natural gas pipelines, and stored
in salt caverns to match seasonal changes in demand. It can also be transformed into synthetic fuels such as
ammonia and shipped like LNG. As depicted in the example below, depending on the location of the exporting
country, the share of transport costs in the total price is relatively low.
The special case of Africa: If green hydrogen is transported from North Africa to Europe via a dedicated
pipeline the transportation cost would be approximately 0.22 USD/kg. In addition, a local green hydrogen
economy can be built alongside the existing infrastructure routes of roads, railways and seaports for use in
and across regions. In mapping done by the African Hydrogen Partnership, six potential landing zones have
been identified, namely Morocco, Egypt, Nigeria-Ghana, Ethiopia-Djibouti, Tanzania-Rwanda-Kenya and
South Africa.
BRIDGING THE EUROPEAN UNION AND THE AFRICAN UNION VIA GREEN HYDROGEN
The European Green Deal is the new growth strategy of the European Union. It is led by Commission President
Ursula von der Leyen and aims to transform the EU into the first carbon-neutral continent, create a more equal
society and boost the EU economy through green technology and innovation. The post-Covid-19 economic
recovery plan will provide an important stimulus accelerating the green transition in the EU and in its close
neighbourhood.
The European Green Deal will play a substantial role in strengthening EU global leadership, especially in key
areas such as energy, environment protection and climate change. In addition, a partnership for the green
transition and energy access has been identified as one of the pillars in the 2020 European Commission and
European External Action Service’s joint communication ‘Towards a comprehensive strategy with Africa’
with the deployment of new renewable energy sources and hydrogen as key components. During her first State
of the Union speech, President Ursula von der Leyen highlighted the importance of the partnership with Africa,
which in the words of the head of the EU executive “will be a key partner in building the world we want to
live in”2. In particular,President von der Leyen emphasised three areas of further cooperation: climate,
digitalisation and trade. In fact, von der Leyen’s first visit outside the European Union as President of the
European Commission was to the African Union headquarters in December 2019 signalling strong links with
Africa with the aim of building a prosperous and stable European-African partnership.
Africa’s Agenda 2063, which was adopted in May 2013, sets the overarching objective of transforming the
continent into “the global powerhouse of the future.” With the African Union gearing up to fulfil its Agenda
2063, to develop a prosperous Africa based on inclusive growth and sustainable development, the time is ripe
for exploring synergies between Africa and Europe not just in meeting the 2030 UN SDG goals but for feeding
into the EU and Africa’s long-term energy transition strategies. Africa could also leap frog ahead by integrating
international best practices. The establishment of an African-European green hydrogen market could
strengthen cooperation between the two continents while enabling them both to complete their energy
transitions in the long term. Green hydrogen could move forward four dimensions of the transition to low-
carbon energy systems: economic, social, clean and global ones. The table below presents the benefits from
2
State of the Union address 2020, Building the world we want to live in: a Union of vitality in a world of fragility,
delivered on 16 September, 2016 2020. Available at: https://ec.europa.eu/info/sites/info/files/soteu_2020_en.pdf
(accessed 18/09/2020).
7
the development of a hydrogen market involving cooperation between the European Union and the African
Union in more detail.
DIMENSION AFRICAN UNION EUROPEAN UNION
ECONOMIC • Direct and indirect (taxation, • Reduced H2 production costs through
TRANSITION permits) revenue from H2 exports, scaling up, allowing EU electrolyser
which can be invested to provide producers to innovate and reduce their
access to modern energy. costs.
• Investment in new electricity, gas • New business opportunities (data flow
and hydrogen infrastructure to link management system, digitalisation)
production and consumption • Efficient use of resources and energy
regions. through sector coupling and circular
• Africa's Blue Economy - economy strategies
development of Africa's shipping
industry
SOCIAL • A chance for women and young • Skilling and reskilling programmes can
TRANSITION people to engage in the energy create new opportunities for the
transition and make their voices population living in coal and carbon-
heard intensive regions
• Creation of new and transparent • An opportunity to share pan-European
institutions and a governance expertise with the creation of an EU gas
structure to supervise the market and the internal gas market
development of the hydrogen market
• Creation of new jobs and reskilling opportunities
• An increase in renewable energy and green hydrogen use in Africa and Europe
would contribute to global greenhouse gas mitigation and achievement of the Paris
Agreement objectives
GLOBAL • Cooperation between Africa and Europe can increase the global standing of both the
TRANSITION AU and the EU
• Cooperation on energy can increase cooperation between the two blocks at other
international fora such as the UN-led climate change negotiations, especially with
regard to the ongoing negotiations on Article 6 of the Paris Agreement on
international market and non-market mechanisms
Table Benefits for the EU and AU to cooperate for the development of hydrogen market
8
While green hydrogen offers many opportunities for both Unions, existing barriers need to be addressed to
kick-start the growth of the green hydrogen market. However, we can already identify the opportunities and
low-hanging fruit to scale up clean hydrogen production:
1. Using green hydrogen for aviation, shipping and the production of ammonia.
2. Sandboxing to implement P2X pathways across sectors, which will in turn help harness large RE
power plants and grow the local renewable market.
3. Moving from MW- to GW-scale production of green hydrogen to bring down the cost.
4. A focus on industrial ports, which are major hydrogen demand centres since many refineries and
chemical industry plants are located in coastal areas.
5. Using the existing natural gas infrastructure by blending methane and hydrogen to decrease transport
costs.
6. Expanding infrastructure for transporting hydrogen through the expansion of fleets, freight corridors
and pipelines.
7. Establishing international hydrogen shipping routes based on experience with the establishment of the
global LNG market.
• Build on existing initiatives and institutions aimed at trade and scientific cooperation between the two
unions. The Africa-EU Energy Partnership (AEEP) can initiate discussion on the establishment of a
Green Hydrogen partnership between Europe and Africa, including exporting hydrogen to Europe.
This can complement other initiatives such as the African Hydrogen Partnership (AHP), the
Programme for Infrastructure Development in Africa (PIDA) and the Africa Renewable Energy
Initiative (AREI), among others.
• While building cooperation between the two unions, ensure alignment with the SDGs, particularly on
social impacts, job creation, environmental integrity, water management and similar standards that are
used by the International Finance Corporation (IFC). Discussions at the technical and political levels
should continue in parallel.
• Once agreement is reached at the technical level, a joint EU-Africa hydrogen partnership strategy
specifying a few priority areas should be developed. A concrete strategy roadmap can include issues
such as scaling up technology, creating a market for green hydrogen for local use and trade, setting
international standards from the very beginning to enable the growth of the green hydrogen market,
facilitating investment, meeting needs in both exporting and importing countries, and capacity
building activities to help execute the strategy. This roadmap can be endorsed by interested countries
in Europe and Africa that are prospective supply and demand centres.
• Use the post-Covid-19 momentum to increase public engagement and discussion on the benefits of
green hydrogen to enable public acceptance of infrastructure projects.
• Use new financing opportunities, such as the post-Covid-19 recovery fund already discussed at the
EU level and market and non-market mechanisms under Article 6 of the Paris Agreement, which are
under discussion in the framework of the UN-led climate change negotiation process. Creating a green
hydrogen certificate system and guarantees of origin could support international cooperation.
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INTRODUCTION
The coming three decades could turn out to be decisive for Africa and Europe. The energy transition to a clean
energy system offers new development opportunities for regions with high renewable energy potential. The
generation and export of green hydrogen could be a significant stimulus for the African economy providing a
stable source of storable energy and revenue in the long run. The European Union could partner Africa in this
transition. In order to achieve the European Green Deal objective of reaching carbon neutrality by 2050, the
EU would need to substantially increase its share of renewable electricity from the current 32%3 and look for
alternatives to fossil fuels in sectors where electrification is technically not possible or costly, such as heavy-
duty transport and steel production. The use of green hydrogen enables such deep decarbonisation. Therefore,
it is one of the key elements in the European Green Deal and the recently announced post-Covid-19 economic
recovery plan for Europe. The launch of the European Hydrogen strategy manifests the long-term use of
hydrogen as a versatile energy sector in the European power system, while the State of the Union address
confirms that hydrogen projects will be funded through the Next Generation EU4 in order to create new
European Hydrogen Valleys “to modernise our industries, power our vehicles and bring new life to rural
areas”5
The aggregate African economy grew at a pace of 3.4% in 2019 and pre-Covid-19 forecasts expected the
growth rate to surpass 4% in 2021.8 Increasingly stable socio-economic development is driving energy
demand, which is growing twice as fast as the global average. The ever-expanding middle class in Africa will
consume more and more energy for cooling, transport and food production. This growing energy demand is
partly satisfied with an increase in renewable energy production, and renewable power capacity increased from
28 GW in 2010 to almost 50 GW in 2018.9
3
Eurostat, Share of energy from renewable sources in gross electricity consumption, 2004-2018 (%). Available at: <
https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=File:Share_of_energy_from_renewable_sources_in_gross_electricity_consumption,_2004-
2018_(%25).png > (accessed 04/06/2020).
4
Next Generation EU is a recovery instrument worth €750 billion proposed by the EU Commission in May 2020 in order
to support the economic recovery in the EU following the Covid19 pandemic. It consists of three pillars: 1) supporting
EU Member States to recover, 2) kick-starting the economy and helping private investment, 3) learning the lessons from
the crisis. For more information see: < https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-
response/recovery-plan-europe/pillars-next-generation-eu_en> (accessed 18/09/2020).
5
State of the Union address 2020, op. cit., p. 11.
6
IEA (2019) Africa Energy Outlook 2019. World Energy Outlook Special Report.
7
See: <https://www.worldometers.info/world-population/africa-population/> (accessed 25/04/2020).
8
African Development Bank Group (2020) African Economic Outlook 2020. Developing Africa’s Workforce for the
Future. Abidjan, 2020.
9
IEA (2019) Africa Energy Outlook 2019. World Energy Outlook Special Report.
10
Africa is not yet using its full renewable energy potential. It has been estimated that the total renewable
potential in Africa is far greater than is needed to cover current and future needs. According to the IEA,
electricity demand in Africa today is 700 TWh and is estimated to range from 1600-2300 TWh in 20403. The
International Renewable Energy Agency (IRENA) has estimated the theoretical potential of that Africa’s solar
PV and concentrating solar power (CSP) theoretical potential are 660 000 TWh a year and 470 000 TWh a
year respectively.10 East Africa and southern Africa have the highest potential. Similarly, wind energy could
produce as much as 460 000 TWh of electricity a year with Algeria, Egypt, Somalia, South Africa and Sudan
among the countries with the most promising conditions. Areas off the coasts of Madagascar, Mozambique,
Tanzania, Angola and South Africa offer promising prospects for offshore wind production. The same applies
to hydropower, which is currently the main source of renewable energy in Africa with 35 GW of installed
capacity and with Angola, Ethiopia, DR Congo, Zambia, South Africa, Sudan, Mozambique and Nigeria each
having at least 2 GW of installed capacity, and geothermal energy mostly in East Africa.11
Figure 1 Global Solar Atlas, Source: The World Bank Group, ESMAP, Solargis (2020)
Figure 2 Global Wind Atlas, Source: The World Bank Group, ESMAP, DTU, Vortex (2020)
10
IRENA (International Renewable Energy Agency (2014), Estimating the Renewable Energy Potential in Africa,
IRENA-KTH working paper, IRENA, Abu Dhabi.
11
IEA (2019) Africa Energy Outlook 2019. World Energy Outlook Special Report.
11
A recent initiative launched by the German Federal Ministry of Education and Research (BMBF) and African
partners in the sub-Saharan region (SADC and ECOWAS countries) called H2 Atlas-Africa aims to explore
the potential for green hydrogen production from the enormous renewable energy sources in the sub-regions.
Regardless of efforts in recent years, the progress reported remains very slow. Access to clean cooking
increased from 15% in 2015 to 17% in 2018. Providing access to electricity remains a challenge, especially
for sub-Saharan Africa. Almost 50% of those without access to electricity live in Nigeria, DR Congo, Ethiopia,
Tanzania and Uganda. Lack of access to modern energy not only the business activities and economic
development and increases pollution but also increases gender inequalities in society preventing many women
from taking up business activities. Another issue linked to lack of access to clean cooking facilities is exposure
to household air pollution, which aggravates vulnerability to respiratory illnesses such as Covid-19 and
pneumonia.12
While Africa’s contribution to global greenhouse gas (GHG) emissions is relatively small, it remains one of
the regions most vulnerable to climate change. Despite 17?% of the global population in 2017, Africa
accounted for only 3.7% of global GHG emissions, which is almost equalled by the GHG emissions from just
the international aviation and shipping industry.13 An Intergovernmental Panel on Climate Change (IPCC)
report highlights that parts of the populations of Africa and Asia, which already struggle with poverty, will be
disproportionately affected by global warming.14
Food insecurity, inflated food prices, losses of income, lost livelihood opportunities, negative health impacts,
population displacements and sluggish economic development are just some of the risks expected to have the
greatest impact. The IPCC report estimates that these negative effects will have the greatest impact on the most
vulnerable groups in society – poor urban dwellers in African cities, the children and the elderly, people with
agricultural and coastal dependent livelihoods and those living in small island developing states (SIDS).15 Both
components of climate action – mitigation and adaptation to climate change – are indispensable to support the
socio-economic growth of Africa in the coming years.
The recent Covid-19 crisis, which has contributed to decreased demand for fossil fuels and partly to the
collapse of oil prices, shows that high dependency on fossil fuels for public revenue and workplace creation is
12
R. Puliti, Energy access takes center stage in fighting COVID-19 (Coronavirus) and powering recovery in Africa, The
World Bank Group, 22 April 2020. Available at: <https://www.worldbank.org/en/news/opinion/2020/04/22/energy-
access-critical-to-overcoming-covid-19-in-africa> (accessed 04/06/2020).
13
See: < https://ourworldindata.org/co2-and-other-greenhouse-gas-emissions> (accessed 25/04/2020).
14
IPCC, 2018: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above
pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global
response to the threat of climate change, sustainable development, and efforts to eradicate poverty [Masson-Delmotte,
V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S.
Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield
(eds.)]. In Press.
15
Ibid., p. 58.
12
becoming more and more risky. Therefore, reliance on development models based on exporting oil, natural
gas or coal could turn out to be unsustainable. Now more than ever, there is a need to think strategically about
future investments, to improve the transparency of resource revenue management and to reform and diversify
economies from fossil fuels. One of the potential ways forward is the transition towards a hydrogen economy.
Hydrogen is a well-established gas used mostly in the chemical sector for ammonia production and refining
for hydrocracking and the desulphurisation of fuels. Today, around 120 million tonnes of hydrogen are
produced every year, which is equivalent to 14.4 exajoules (EJ), about 4% of global final energy and non-
energy use.16 Almost all hydrogen (95%) is produced from fossil fuels, either through steam methane reforming
(SMR) of natural gas or coal gasification, mainly in China. The remaining 5% is a result of chlorine production
through electrolysis. At present, the production of hydrogen from renewable sources is negligible. The global
value of the hydrogen feedstock market has been estimated at USD 115 bln.17
However, green hydrogen is gaining unprecedented political and business momentum. In contrast to previous
waves of hydrogen hype in the 1970s, 1990s and the early 2000s, this time could be different.18 This is because
both the cost of electricity from renewable sources and the cost of electrolysers have decreased considerably
and have a potential to diminish even further19, while at the same time the sense of urgency to mitigate GHG
emissions has increased. The 2015 Paris Agreement established a flexible but sustainable governance
framework based on national climate pledges – nationally determined contributions (NDCs) to be regularly
adjusted upwards in 5-year cycles. As a result, more and more countries are committing to reach carbon
neutrality by 2050 or earlier while ensuring their economies continue to develop.20
Green hydrogen could be instrumental in reaching these challenging climate targets. It is a versatile energy
vector, relatively easy to store and transport, and it can be produced with low or zero GHG emissions.21 As it
is a clean-burning molecule, it has many advantages and can complement electricity22. Hydrogen and its
associated products can be used as fuel for transport – especially heavy-duty vehicles, aviation and shipping –
and can be used for power production. It can be a source of heat for industry, especially in hard-to-abate and
electrify sectors such as steel, cement and aluminium production, and for residential heating. Finally, it can be
used as a feedstock for the production of fertilisers, plastics and fuel refining. In small quantities, hydrogen
could be transported through existing natural gas pipelines and stored in salt caverns to match seasonal changes
in demand and it can be transformed into ammonia and shipped like LNG. In fact, hydrogen could contribute
to the decarbonisation of many challenging sectors: transport, industry and natural gas infrastructure.
16
IRENA (2018), Hydrogen from renewable power: Technology outlook for the energy transition,
International Renewable Energy Agency, Abu Dhabi. P. 13.
17
https://www.marketsandmarkets.com/PressReleases/hydrogen.asp (accessed 24/04/2020).
18
Florence School of Regulation online workshop on renewable hydrogen, 22 April 2020. A recording is available at:
<https://www.youtube.com/watch?v=4RvUofxXOQw> (accessed 25/04/2020).
19
Based on cost assessments of IEA, IRENA and BNEF. Electrolyser costs to decline from €900/kW to €450/KW or
less in the period after 2030, and €180/kW after 2040.
20
For more information see: <https://unfccc.int/nationally-determined-contributions-ndcs> (accessed 24/05/2020).
21
Bloomberg New Energy Finance, Hydrogen Economy Outlook. 30 March 2020. P. 4.
22
No molecules, no energy transition. Opinion piece by Ronnie Belmans, Professor at KU Leuven, Belgium, Florence
School of Regulation blog post, 2019. Available at: < https://fsr.eui.eu/no-molecules-no-energy-transition/> (accessed
18/09/2020).
13
The revenue generated through the export of green hydrogen could be substantial and income which could be
used to intensify the provision of access to modern energy, both in terms of clean cooking facilities and access
to electricity.
The reshape of the Joint Africa-Europe strategy is currently discussed and will be adopted during the upcoming
triennial AU-EU Summit (Brussels, October 2020)24
Apart from stepping up efforts to tackle climate change, the proposed strategy foresees an important role for
investment supporting innovative technologies, such as hydrogen production, and strengthening scientific
capacity in Africa “by providing access and local adaptation to technologies” while trade exchange should
stimulate “the adoption of innovative and sustainable business models.”25 Moreover, the strategy highlights
the need to maintain sustainable and fair value chains in line with circular economy principles. However, the
proposed strategy paper falls short of setting concrete actions and targets. These should be high on the agenda
at the upcoming EU-AU summit in autumn 2020.26
In fact, there is a high potential for greater cooperation between Europe and Africa in the coming decades, and
the two regions could become more interdependent. Green hydrogen offers new opportunities for the energy
transition in Africa and Europe. However, to make this potential materialise, a concrete plan supported by
political agreement, investment and technology transfer on both sides is needed.
23
Joint Communication to the European Parliament and the Council, Towards a Comprehensive Strategy with Africa.
Brussels, 09.03.2020 JOIN (2020) 4 final.
24
European Parliament Legislative Train Schedule: Towards a comprehensive strategy with Africa. Available at:
<https://www.europarl.europa.eu/legislative-train/theme-international-trade-inta/file-towards-a-comprehensive-
strategy-with-africa> (accessed 04/06/2020).
25
Joint Communication to the European Parliament and the Council, Towards a Comprehensive Strategy with Africa.
Brussels, 09.03.2020 JOIN(2020) 4 final, p. 4.
26
Joint Communique 10th African Union Commission – European Commission Meeting. Addis Ababa, 29 February
2020.
14
The Role of Green Hydrogen in the Energy Transition
Green hydrogen can serve as the sustainable next generation energy carrier as it can be produced using
renewable energy, which can be stored and transported over long distances. Green hydrogen has the
potential to complement other energy carriers such as electricity and to help with deep decarbonisation
of energy-intensive sectors such as energy, transport, buildings and industry.
HYDROGEN TODAY
Hydrogen (H2) is the most abundantly available chemical substance in the universe.27 It is not an energy source
but an energy carrier which can be produced and stored. Energy stored in the hydrogen molecule can be reused
directly by either (i) combusting it, with one kilo of H2 releasing three times more energy than a kilo of gasoline
or (ii) by using a fuel cell which converts the chemical energy of hydrogen and oxygen into electricity.
Hydrogen can be produced in several ways depending on the type of energy source used. It can be classified
into three categories, namely grey, blue and green hydrogen, as is shown in the table below.28 29
Every year around 120 million tonnes of hydrogen are produced, of which 96% is produced using natural gas
and coal.21 The largest share of hydrogen demand is from the chemical sector to produce ammonia for fertilisers
(50%), followed by refining for hydrocracking and desulphurisation of fuels (35%) and a small share in other
sectors such as metal production, glass, electronics, food processing and methanol production.30 31
27
Boyd, Padi (19 July 2014). "What is the chemical composition of stars?".?" NASA. Archived from the original on 15
January 2015.
28
How Many Shades of Green? An FSR Proposal for a Taxonomy of ‘Renewable’ Gases, I Conti, 2020.
29
New Hydrogen Economy -– Hope Or Hype? World Energy Council, 2019.
30
Chemical Economics Handbook, IHS Markit, 2018.
31
IEA Hydrogen. (2017). “Global Trends and Outlook for Hydrogen.” IEA Hydrogen Technology
Collaboration Programme.
15
HYDROGEN GOING FORWARD
Hydrogen can play a crucial role in mitigating emissions in the coming decades. Particularly green hydrogen
can serve as the missing link in the energy transition journey for end use applications in otherwise hard to
decarbonise sectors such as transport, buildings and industry. As hydrogen can be used both as a feedstock and
as an energy vector, it can help with the long-term decarbonisation of energy-intensive sectors and help
integrate large amounts of variable renewable energy to offer system flexibility in the power sector.
Transportable hydrogen can be produced for direct or indirect use.32 Importantly, hydrogen has the potential
to complement other energy carriers and to contribute to sector coupling between the energy sector and
industry, building and transport (see the figure below). IRENA’s Renewable Energy Roadmap (REmap)
estimates the share of hydrogen in total final energy consumption in 2050 at 6% 31, while the Hydrogen
Council33 suggests that an 18% share can be achieved by 2050.
Figure 3 Sector coupling using green hydrogen, Source: Hydrogen from renewable power: Technology outlook for the energy transition, IRENA
(2018)
In an expert survey conducted by the World Energy Council, the potential new applications for hydrogen in
the future are dominated by its use in the mobility sector (46.9%), storage (18.3%), power (13%), heat (12.5%)
and industry energy use (9.3%). For hydrogen to play an important role in decarbonisation, the ecosystem
should deploy large-scale projects involving the entire supply chain and with the help of local and national
governments and supporting polices. Listed below are some of the green hydrogen applications by sector (at
various levels of maturity) and their key advantages and challenges.29
32
IRENA (2018), Hydrogen from renewable power: Technology outlook for the energy transition.
33
Hydrogen Council (2020) Path to hydrogen competitiveness: A cost perspective.
16
• Maritime applications • Long lifespan of fuel • Costs of vehicles
2.3% cells
• Buses 1.4%
Power • Residential & building • Fuel cells are flexible • Technology
13% CHP 7% and scalable unpreparedness and scale
• Portable power 4.6% • Seasonal storage of of required investment
• Stationary power 1.6% energy • Lack of hydrogen
• Longer term: delivery network
replacing natural gas • Current price of
with hydrogen for hydrogen
power generation
Heat • Decarbonise industrial • Decarbonisation of • Possible retrofitting of
12.5% heat 6.5% heat appliances
• Building heating 6% • Possibility of flexible • Backing from
scale-up in output and governments is essential
infrastructure • Need for cost-effective
• Enabling other green hydrogen and CCS
hydrogen applications at scale for blue hydrogen
by contributing to
reduction in the cost
of hydrogen
Industry • Green ammonia 7% • Existing hydrogen • Absence of market for
Energy • Low carbon steel 2.3% expertise and green products
Use 9.3% infrastructure • Significant CAPEX
• Large scale green commitments
hydrogen production • Large amounts of new
could boost other dedicated renewables
sectors required to produce green
hydrogen via electrolysis
Table 2 Future applications of green hydrogen by sector, Source: World Energy Council
POWER-TO-X PATHWAYS
The transition to using hydrogen to reach decarbonisation goals would entail addressing two challenges, first
creating a demand for low carbon hydrogen and its products as listed in the previous section and second
switching to green hydrogen. The increasing role of renewables, particularly variable renewables, in the power
sector offers an opportunity to use excess renewables to produce green hydrogen via electrolysis i.e. the power-
to-x (P2X) pathway. Furthermore, P2X allows not only direct applications of hydrogen but also the production
of synthetic fuels such as ammonia, methane and methanol which can be used in other sectors (transport and
chemicals), replacing the use of conventional fossil fuels.34 The figure below depicts different power-to-X
pathways such as power to hydrogen, power to fuels that produce methane and methanol, and power to
ammonia.
34
International aspects of a power-to-x roadmap, Weltenergierat Deutschland, 2018
17
Figure 4 Power-to-x pathways using hydrogen and synthetic fuels, Source: International aspects of a power-to-x roadmap, Weltenergierat
Deutschland, 2018
The potential of P2X demand is estimated at between 10,000 TWh and 41,000 TWh in the long term. For
2050, it is estimated at 20,000 TWh, translating into 8,000 GW of P2X capacity, of which 75% would be for
electrolysis and the remaining 25% for second stage synthetic fuels.29 33
18
Figure 5 Cost of hydrogen production using renewables and fossil fuel as of today, Source: IRENA analysis 27
The current cost of producing (grey) hydrogen ranges from 1.5 to 2.5 USD/kg. On the other hand. the cost of
producing green hydrogen ranges from 2.5 to 7 USD/kg. However, in the best- case wind scenario coupled
with low cost electrolysers, green hydrogen competes with grey hydrogen at approximately 1.5 USD/kg. In
about 3-5 years, with declining prices of solar and wind, the cost of green hydrogen will be competitive with
that being produced from fossil fuel when it is produced in the best RE locations.
Another important factor influencing hydrogen production costs is the utilisation (i.e. load factor) of
electrolyser plants. Many studies are under way on the degree of utilisation needed to make them cost
competitive and there is so far no consensus on the suitable utilisation range 35. Accordingly, this would also
influence the decision if excess renewable energy may be used for producing green hydrogen.
Figure 6 Cost of hydrogen production using solar and wind vs fossil fuel, Source: IRENA analysis 27
35
Agora Verkehrswende, Agora Energiewende and Frontier Economics (2018): The Future Cost of Electricity-Based
Synthetic Fuels.
19
A Hydrogen Council study maps the best sources of low carbon hydrogen in different regions of the world,
based on which the supply chain for local and global demand can be developed.
The total cost of delivering hydrogen includes both production and logistics costs. The hydrogen infrastructure
would include production points, transportation, transmission, fuelling stations and distribution. A hydrogen
infrastructure currently already exists, but for hydrogen as a feedstock rather than an energy carrier. Another
key driver for hydrogen is the use of the existing gas infrastructure for transportation. 10-20% of hydrogen
could be blended into natural gas without significant technical challenges.36 In this way, the existing gas
infrastructure could be used without the need for new infrastructure.
Depending on the demand, the hydrogen supply chain can range from decentralised to regional, central or
intercontinental, or a combination. The cost of supplying hydrogen will depend on several factors such as local
renewable electricity prices, resource availability (water, land and RE potential), the cost of finance,
technological options for P2X pathways, the establishment of supply chains and the ability to create local
demand and/or global trade deals to attract investments.
36
IRENA (2019), Hydrogen: A renewable energy perspective.
20
EU-AFRICA HYDROGEN PARTNERSHIP
Internationally, the countries leading hydrogen market development are Japan, Germany, the United Kingdom,
Norway, Chile, Australia, Morocco, Saudi Arabia and China. The EU is keen to achieve its 2050
decarbonisation goals with an estimated 24% of hydrogen (~ 2,250 TWh) in the total energy demand. This
would result in 560Mt annual CO2 abatement, 820 bln. euro annual revenue generation, a 15% reduction in
local emissions and 5.4 million jobs.37 Due to its size and population density, the EU’s hydrogen demand
cannot all be met locally and therefore energy partnerships with regions with potential RE to procure green
hydrogen would be needed to meet the EU decarbonisation goals.38 A fully developed EU infrastructure to
import synthetic fuels already exists with a capacity of 1,800 GW, compared to that of 14 GW for electricity,
which presents a good case for considering hydrogen imports.35 56
Given the comparative advantage and the priority given by the European Commission in the new
comprehensive strategy with Africa (stressed in the EU Green Deal) to cooperating with the African Union,
the two continents are poised to explore a mutually beneficial hydrogen ecosystem. Already 13% of the natural
gas and 10% of the crude oil consumed in Europe are imported from North Africa, translating into 60% of oil
and 80% of gas exports from North Africa.39 Factoring in the resource potential and proximity and leveraging
existing trade relations, North African countries could be the early adopters in the AU to supply green hydrogen
to Europe. IRENA’s renewable energy roadmap for Africa 2030 indicates a feasible expansion capacity of
70GW of wind and 50GW of concentrated solar power and PV in North Africa. This region has the advantage
over other parts of Africa which are also trying to address a lack of energy access.40
Green hydrogen is not yet cost-competitive, as can be seen from Figure 6. However, if the market were to
grow globally the cost of green hydrogen production at a good location would be less than 1 Euro/Kg. Taking
the case of Morocco and the bidding price of an 850 MW wind farm in January 2019, the cost of producing
green hydrogen there at an electrolyser efficiency of 80% and a CAPEX of USD 347/kW, the cost would be
about 1.16 USD/kg41. Given that RE prices will drop in the coming years, combined with improved electrolyser
efficiency and lower CAPEX, come 2050, the cost of green hydrogen production will be well below 1.16
USD/kg.38 On the delivery front, the existing gas pipeline from Algeria and Libya to Europe via Italy and
Spain can be a leverage. It transports 63.5 bcm a year, translating into a capacity of more than 60 GW.42 As
the market matures, existing pipelines can be converted and new pipelines to transport green hydrogen from
North Africa to Europe can be built. If a dedicated transportation corridor 2500 km long consisting of 2
pipelines of 48 inches diameter each would cost 19.14 billion USD. The cost of hydrogen transport using these
pipelines would be 0.0058 USD/kWh or 0.22 USD/Kg, which is a reasonable proportion of the total cost of
delivering hydrogen to Europe.38
37
Fuel Cells and Hydrogen 2 Joint Undertaking, 2019.
38
Hydrogen: The Bridge between Africa and Europe, September 2019.
39
Eurostatimports. “EU import of energy products - recent developments.” May 2019.
40
IRENA, “Africa 2030; Roadmap for a renewable energy future.” 2015.
41
Conversions made using the exchange rate of 1 EUR = 1.16 USD as on 24/07/2020
42
Timmerberg, Sebastian, and Martin Kaltschmitt. “Hydrogen from renewables: Supply from North Africa to Central
Europe as blend in existing pipelines - Potentials and costs.” Applied Energy 237, 2019: 795-809.
21
green hydrogen and harness the RE potential of the continent. Some of the economic and social benefits include
a reduced dependency on the US dollar, the creation of job hubs and tax revenue, and an increased
electrification rate. From an environmental perspective, the benefits are reduced CO2 emissions by adopting
cleaner modes of transportation, cleaner air, soil and water, less deforestation, reduced climate displacement
and the preservation of wildlife. In addition, a local hydrogen economy can be built alongside the existing
infrastructure routes of roads, railways and seaports for use within and across regions. Based on mapping done
by the African Hydrogen Partnership, six potential landing zones have been identified: Morocco, Egypt,
Nigeria-Ghana, Ethiopia-Djibouti, Tanzania-Rwanda-Kenya and South Africa (see Figure 9 below). For every
1GWe of installed capacity for P2X the potential jobs created could range from 300 to 700.43 One of the key
resources for the production of hydrogen is water and for every litre of water one cubic metre of hydrogen can
be produced.33. Figure 10 below shows a water resource map of Africa. Given that water is not abundantly
available in all parts of Africa, this allows for synergy (energy-water nexus) with desalination initiatives, with
green hydrogen plants acting as anchor off-takers for desalination plants.
Figure 8 (left) Hydrogen infrastructure development Figure 10 (right) Water aquifers map of Africa, Source: CGIAR
potential in Africa, Source: African Hydrogen Partnership Water, Land and Ecosystems
Based on their experience in Europe, energy companies such as Enertrag are already exploring opportunities
to produce green hydrogen in Africa. According to their analyses, one of the potential countries in the south
of the continent is South Africa, which already has vast experience in creating approximately 8 billion litres a
year of synthetic fuels. This existing infrastructure could be repurposed to produce green hydrogen. Some of
the low-hanging fruits would be producing clean fuel for aviation and shipping and for producing ammonia,
with Africa capturing 20-25% of the global market share. For example, if South Africa were to satisfy 10% of
the global aviation demand, it would need to set up approximately 120 GW of electrolysers powered by 150
GW wind and 150 GW solar. Overall, African countries can tap into supplying the low hanging fruits and
generate a green value of approximately USD 927 billion a year. As a first step, Enertrag’s South African
subsidiary is planning on deploying 20 fuel cell buses using green hydrogen.44
43
Institut de Recherche en Energie Solaire et Energies Nouvelles, Ministry of Energy, Mines and Environment ,
Morocco, 2020.
44
Data based on studies undertaken by Enertrag AG, presented at thea roundtable webinar organizedorganised by
AEEP.
22
BRIDGING THE EUROPEAN UNION AND THE AFRICAN UNION
WITH GREEN HYDROGEN
Hydrogen could aid both the European Union and the African Union to achieve objectives specified in
the European Green Deal and Agenda 2063. This section will conclude with a list of selected sectors and
areas which, based on this analysis, could be perceived as low-hanging fruits.
At the beginning of July 2020, the European Commission published the EU Strategy for Energy System
Integration46 and a Hydrogen Strategy.47 The two documents set up a framework for a climate-neutral Europe.
The former strategy is based on three pillars: (1) a more ‘circular’ and energy efficient system; (2) direct
electrification of end-use sectors; and (3) in sectors where electrification is expensive or difficult, the
promotion of clean fuels, such as biogas, sustainable biofuels and renewable hydrogen.
The EU Hydrogen Strategy specifies how to boost the hydrogen economy in the EU between 2020 and 2050.
In the first phase (2020-2024) the EU will support the installation of at least 6 GW of renewable hydrogen
electrolysers. The electrolyser capacity will increase to at least 40 GW in the second phase (2025-2030) and
electrolysers are expected to be widely deployed in hard-to-decarbonise sectors by 2050. According to the
Strategy, production of green hydrogen will reach 1 Mt in 2024 and 10 Mt in 2030.
Scaling up hydrogen production will require substantial investment. The European Commission has already
identified some of the major instruments which could support this transformation, on the one hand, and provide
a post-Covid-19 stimulus to the EU economy, on the other: the recovery instrument Next Generation EU,
which has been recently confirmed in the State of the Union address by President Ursula von der Leyen: “I
want Next Generation EU to create new European Hydrogen Valleys to modernise our industries, power
our vehicles and bring new life to rural areas”48. Other instruments include:the Connecting Europe Facility
(CEF) for Energy and for Transport; and the EU Emissions Trading System Innovation Fund. The Commission
is also planning to adjust the regulatory framework by introducing common standards, terminology and a
certification scheme, and by reviewing the TEN-E regulation, the energy taxation directive and the gas market
45
Communication from the Commission To the European Parliament, the European Council, the European Economic
and Social Committee, the Committee of the Regions, The European Green Deal. Brussels, 11.12.2019. COM (2019)
640 final.
46
Communication from the Commission To the European Parliament, the European Council, the European Economic
and Social Committee, the Committee of the Regions, Powering a climate-neutral economy: An EU Strategy for Energy
System Integration, 08.07.2020. COM (2020) 299 final.
47
Communication from the Commission To the European Parliament, the European Council, the European Economic
and Social Committee, the Committee of the Regions, A hydrogen strategy for a climate-neutral Europe, 08.07.2020.
COM (2020) 301 final.
48
State of the Union address 2020, op. cit., p. 11.
23
regulatory framework. The European Clean Hydrogen Alliance, gathering various stakeholders from industry,
civil society, national and regional ministers and the European Investment Bank will help to deliver on the
Strategy by setting up an investment pipeline of generation projects and supporting the demand for hydrogen.49
The EU Strategy includes a fully-fledged external dimension. The European Commission expects closer
cooperation with countries in its eastern and southern neighbourhood in order to establish a full hydrogen value
chain and a potentially global hydrogen market. The EU Strategy outlines the potential of 40 GW electrolysers
in their Eastern and Southern Neighbourhood. Northern Africa is seen as the region with the highest potential
due to geographic proximity, it is a potential supplier of cost-competitive renewable hydrogen to the EU
requiring that the deployment of renewable power generation in these countries strongly accelerates. The EU
would like to cooperate with Africa on research and innovation to regulatory policy, physical interconnections
and technological development. The cooperation should manifest within the Africa Europe Green Energy
Initiative, where the EU would also like to set-up a cooperation process with the African Union. All the above
-mentioned elements are also present in the German National Hydrogen Strategy, which was published a few
days prior to the publication of the EU Hydrogen Strategy.50 Germany is the first EU member country to set
up a national strategy stimulating the production of green hydrogen.
Similarly to the EU, the German strategy sees a role for green hydrogen in the decarbonisation of hard-to-abate
sectors; a gradual expansion of installed electrolyser capacity from 5 gigawatts (GW) by 2030 to 10 GW by
2040 at the latest; financial support; a reform of the regulatory framework; and international cooperation. The
German government is planning to spend EUR 7 bln. to boost green hydrogen production in Germany and an
additional EUR 2 bln. to scale up large-scale electrolysis facilities in partner countries. The German
government expects that Germany’s future demand for hydrogen will be around 110 TWh in 2030, while
domestic production will be around 14 TWh, which means that almost 90% of the hydrogen consumed in
Germany in 2030 will be imported. During the presentation of the strategy, Germany announced to cooperate
with African countries such as Morocco to construct large-scale renewable hydrogen P2X projects.51
Similarly to the German National Hydrogen Strategy, the European Green Deal and the EU Hydrogen Strategy
include a strong external dimension aiming to promote global EU leadership through the development of
‘green deal diplomacy’ and bilateral and multilateral cooperation. Consequently, hydrogen is identified as one
of the elements in the partnership for a green transition and energy access under the proposed EU Strategy
towards Africa. An example of an energy access project is one pioneered by Tiger Power, a Belgian company
that is installing solar-hydrogen hybrid mini grids in three villages in Kyenjojo, Uganda in collaboration with
Uganda’s rural electrification agency.52
49
For more information, see: <https://ec.europa.eu> (accessed 22/07/2020).
50
Federal Ministry for Economic Affairs and Energy, The National Hydrogen Strategy, June 2020. Retrieved from:
<https://www.bmbf.de> (accessed 22/07/2020).
51
K. Beckman, Germany’s National Hydrogen Strategy: the second Energiewende, Natural Gas World, 20, July 2020.
Retrieved from: <https://www.naturalgasworld.com> (accessed 22/07/2020).
52
Alliance for Rural Electrification. 2018. “ARE Member Tiger Power Seals Deal to Run World’s First, Solar-
Hydrogen Powered Mini-grids in Uganda.” https://www.ruralelec.org/news-from-are/are-member-tiger-power-seals-
dealrun-worlds-first-solar-hydrogen-powered-mini-grids.
24
Figure 9 The European Green Deal, Source: European Green Deal Communication, 2019
Agenda 2063, which was adopted in May 2013, sets the overarching objective of transforming Africa into “the
global powerhouse of the future.”53 The socio-economic trends described in the first section of this report
constitute a robust fundament for Africa’s aspirations.
Agenda 2063 identifies seven major areas: 1) inclusive and sustainable development; 2) closer political
cooperation and integration building on the ideals of pan Africanism and the vision of African renaissance; 3)
an Africa of good governance, democracy, respect for human rights, justice and the rule of law; 4) a peaceful
and secure Africa; 5) Africa with a strong cultural identity, common heritage, values and ethics; 6) Africa
whose development is people driven, relying on the potential offered by African people, especially its women
and young people, and caring for children; and 7) an Africa as a strong, united, resilient and influential global
player and partner. These aspirations have been translated into concrete actions developed in a ten-year
implementation plan and a group of flagship projects, including the establishment of the African Continental
Free Trade Area (AfCFTA), establishment of the African Commodities Strategy, construction of the Inga Dam
with an installed capacity of 1,775 GW of power and the establishment of the Pan-African e-Network.
53
African Union Commission (2015), Agenda 2063: The Africa We Want (Popular version). Addis Ababa, 2015.
25
Figure 10 Agenda 2063’s seven aspirations, Source: The African Union
Both the European Green Deal, as well as Africa’s Agenda 2063 contribute to the seventeen UN Sustainable
Development Goals aiming to alleviate the challenges related to climate change, poverty, peace and justice,
inequality and environmental degradation.54 SDG7 refers to the provision of modern access to clean and
affordable energy, which should be attained by 2030, while SDG13 urges action to combat climate change and
its impacts.
For reaching Agenda 2030 cooperation between the European Union and the African Union is therefore in the
interest of both Unions. Green hydrogen could move forward four dimensions of the transition to a low-carbon
energy system: economic, social, clean and global. The benefits from the development of the hydrogen market
involving cooperation between the European Union and the African Union are presented in more detail in the
table below.
54
Available at: <https://www.un.org/sustainabledevelopment/sustainable-development-goals/> (accessed 21/05/2020).
26
DIMENSION AFRICAN UNION EUROPEAN UNION
ECONOMIC • Direct and indirect (taxation, • Reduction in H2 production costs
TRANSITION permits) revenue from H2 exports, through scaling up, allowing EU
which could be invested to provide electrolyser producers to innovate and
access to modern energy. reduce their costs.
• Investment in new electricity, gas • New business opportunities (data flow
and hydrogen infrastructure to link management system, digitalisation)
production and consumption • Efficient use of resources and energy
regions. through sector coupling and circular
• Africa’s Blue Economy – economy strategies
development of Africa’s shipping
industry
•
• Development of the hydrogen infrastructure and market could be a stimulus to
revive the economy after the Covid-19 crisis.
• R&D sector development
• Reduced dependence on fossil fuels related to oil price volatility
SOCIAL • A chance for women and young • Skilling and reskilling programmes
TRANSITION people to engage in the energy could create new opportunities for the
transition and make their voices populations living in coal- and carbon-
heard intensive regions
• Creation of new transparent • An opportunity to share pan-European
institutions and the governance expertise with the creation of the EU
structure to supervise the gas market and the internal gas market
development of the hydrogen
market
• Creation of new jobs and reskilling opportunities
• An increase in renewable energy and green hydrogen use in Africa and Europe
would contribute to global greenhouse gas mitigation and achievement of the
Paris Agreement objectives
GLOBAL • Cooperation between Africa and Europe could increase the global standing of the
TRANSITION AU and the EU
• Cooperation on energy could increase cooperation between these two blocs at
other international for a such as the UN-led climate change negotiations,
especially with regard to the ongoing negotiations on Article 6 of the Paris
Agreement on international market and non-market mechanisms
Table 3 Benefits for the EU and AU to cooperate for the development of hydrogen market
27
Several suggestions on scaling up the production of hydrogen have already been made in the literature. We
highlight some examples below. At the beginning of 2020, the Hydrogen Council presented a pathway to
hydrogen competitiveness and identified the following three types of needs.55
1. A need for investment to scale up the production of green hydrogen and consequently improve its cost-
competitiveness.
2. A need for policy alignment in order to establish a level playing field for clean and conventional
technologies.
3. A need for market creation through: reduced demand uncertainty; increased scale and utilisation
leading to a decrease in production costs; a focus on complementary solutions offering spill-over
effects, e.g. by developing hydrogen infrastructure close to industrial complexes and airports.
On the other hand, Frontier Economics has proposed a seven-step process towards the establishment of an
international Power-to-X (PtX) market56 involving the following:
The above-mentioned analyses demonstrate that the establishment of a regional hydrogen market will be a
complex and long-term process. However, we can already identify the short-term opportunities and low-
hanging fruits to scale up clean hydrogen production on the basis of an IEA report (2020):57
1. Focus on industrial ports, which are major hydrogen demand centres, since many refineries and
chemical industry plants are located in coastal areas.
2. Use the existing natural gas infrastructure by blending methane and hydrogen to decrease transport
costs.
3. Increase the use of hydrogen in transport by expanding fleets and freight corridors.
4. Establish international hydrogen shipping routes based on the experience with the global LNG market.
55
Hydrogen Council (2020), Path to hydrogen competitiveness. A cost perspective. 20 January 2020, pp. 66-72.
56
Frontier Economics (2018), International Aspects of a Power-to-X Roadmap. A report prepared for the World Energy
Council, Germany. 18 October 2018.
57
International Energy Agency (2020) The Future of Hydrogen, available at: <https://www.iea.org/reports/the-future-
of-hydrogen> (accessed 21/05/2020).
58
Hydrogen Technology: Workshop summary, I. Cekovic, I. Conti, C. Jones, A. Piebalgs, 2020.
28
are used by the International Finance Corporation (IFC). Discussions at the technical and political
levels should continue in parallel.
• Once there is agreement reached at the technical level, a joint EU-Africa hydrogen partnership strategy
specifying a few priority areas should be developed. A concrete strategy roadmap could include issues
such as scaling up technology, creating a market for green hydrogen for local use and trade, setting
international standards from the very beginning to enable the growth of the green hydrogen market,
facilitate investment, meet the needs in both exporting and importing countries and build the capacity
to help execute the strategy. This roadmap can be endorsed by interested countries in Europe and
Africa that are prospective supply and demand centres during the upcoming AU-EU Summit which
will take place in October 2020 in Brussels.
• Use the post-Covid-19 momentum to increase public engagement and discussion on the benefits of
green hydrogen to enable public acceptance of infrastructure projects.
• Use new financing opportunities in the EU. Under the Next Generation EU the European Commission
is planning to issue bonds on the financial markets on behalf of the EU, which will enable it to raise
€750 billion, the majority of it in the next 5 years (2020-2024). These extra funds will be channelled
to dedicated programs or will be borrowed to the Member States, which created an enormous
opportunity to invest in green hydrogen technology in the next few years59.
• Other financing opportunities may emerge from the discussions on market and non-market
mechanisms under Article 6 of the Paris Agreement within the framework of the UN-led climate
change negotiation process. Creating a green hydrogen certificate system and guarantees of origin
could support international cooperation.
59
Special meeting of the European Council (17, 18, 19, 20 and 21 July2020) – Conclusions. EUCO 10/20. Brussels, 21
July 2020.
29
ANNEX 1
DEFINITIONS
Green (clean, renewable) hydrogen – is hydrogen produced from renewable-based electricity through water
electrolysis. Green hydrogen can also be produced by reforming biogas (instead of natural gas) and through
biochemical conversion of biomass if the process is conducted in line with sustainability requirements.
Blue hydrogen (low-carbon hydrogen, fossil-based hydrogen with carbon capture) – is hydrogen from
fossil fuels (mainly through reforming natural gas or gasifying coal) with carbon capture. Thanks to carbon
capture, the greenhouse intensity of blue hydrogen is lower than that of hydrogen produced from fossil fuels,
but higher than that of green hydrogen.
Turquoise hydrogen (low-carbon hydrogen) – is hydrogen produced through pyrolysis. Pyrolysis is a high
temperature process during which hydrogen is separated from carbon. The carbon is then transformed into
solid products (charcoal, biochar) which can be used as feedstock.
Grey hydrogen (fossil-based hydrogen) – is hydrogen produced using fossil fuels as feedstock through, e.g.,
steam methane reforming of natural gas or coal gasification, which are currently the most common ways to
produce hydrogen.
Power-to-Gas – comprises two processes. Water is decomposed into hydrogen and oxygen with the use of an
electric current (electrolysis of water). The hydrogen can then be combined with carbon dioxide derived from
the decomposition of organic waste or industrial processes to produce synthetic natural gas (methanation).
Sector Coupling – energy engineering and an energy economy through connecting electricity, heat, mobility
and industrial processes and their infrastructures with the aim of decarbonisation, while simultaneously
increasing the flexibility of energy use in industry, commerce/trade, households and transport to achieve
profitability, sustainability and security of supply.
ANNEX 2
ACRONYMS
TWh Terawatt-hour
GWe Gigawatt electrical
GW Gigawatt
MW Megawatt
kW Kilowatt
kWh Kilowatt-hour
RE Renewable energy
AU African Union
EU European Union
PtX Power to X
P2G (PtG) Power-to-Gas
30
BIBLIOGRAPHY
- African Development Bank Group (2020), African Economic Outlook 2020. Developing Africa’s
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33
QM-02-20-822-EN-N
doi:10.2870/126402
ISBN:978-92-9084-931-5