All major energy transition pathways identify green hydrogen as the most credible solution available today for decarbonizing heavy industry and transport sectors.
Few highlight the significant technical and market potential of green hydrogen and derivatives’ production across the African continent, which enable an historic economic and climate leadership opportunity.
Delivering on that potential will require unprecedented international collaboration to address major barriers.
The Africa Green Hydrogen Alliance was soft launched at COP26, connecting existing initiatives and leadership efforts, with the potential to generate new industry awareness, opportunities and action.
Global confidence has grown rapidly on the role of green hydrogen in securing a clean energy revolution that achieves both the UN Sustainable Development Goals and the objective of the Paris Agreement.
The United Nations’ Marrakech Partnership’s Energy Pathway foresees 500-800 gigawatts (GW) of green hydrogen electrolysis deployment by 2030, consistent with the International Energy Agency’s (IEA) recent Net Zero 2050 scenario. Production at this scale can decarbonize key sectors like steel, shipping, power, and chemicals (i.e. fertilizers) that are challenging to electrify with renewables directly. Critically, many experts have long expected green hydrogen costs to decline rapidly, potentially becoming cost-competitive with emissions-abated fossil fuels this decade. The most rapid path to this outcome will leverage the most advantageous locations worldwide, where exceptional renewables create new value pools for global carbon abatement.
Today, industry assessments of scalability and cost reduction increasingly support this bold trajectory. The Green Hydrogen Catapult was launched in 2020 by seven leading energy and industry companies with a target to deliver 25 GW globally and costs below USD 2/kg by 2026—a possible tipping point for global industrial development. The Hydrogen Council estimates that a US$200 billion investable pipeline of green hydrogen projects are currently under development. BNEF currently estimates that annual demand for ~8GW of green hydrogen electrolysis capacity and its supply will arise by 2025.
This private sector momentum is underpinned by emerging policy leadership in Europe, China, India, and North America. Funding support ranging between USD 10-20 billion per year, alongside carbon pricing and regulation, will spur more rapid deep decarbonization than commonly anticipated as costs continue to decline and demand expands further.
Green hydrogen unlocks the world’s first zero carbon industrial opportunity by enabling renewable energy sources to be converted into transportable and useful chemicals and value-added products. Many countries across Africa are well-suited to access this with large tranches of non-arable land and strong renewable energy potential. New opportunities for near-zero carbon industry and employment are within reach—if not yet in hand.
Export markets offer breakthrough opportunities for developing this new sector, today. Effective public and private sector collaboration will be necessary to rapidly mobilize investment and project development to produce green hydrogen in quantities needed to meet 2030 decarbonization targets. Meanwhile, mass-scale production can open up renewable energy and green hydrogen supply chains at significant scale to further broader economic growth and electrification. For example, installation of four global scale green hydrogen projects would more than double the renewable energy capacity installed across Africa as of 2020.
At the same time, could this export-oriented development unlock structural changes in local, carbon-intensive heavy industries to address challenging environmental and health effects?
Deliberate efforts to adopt green hydrogen in hard-to-electrify end-uses would benefit from large-scale supply chains and expertise established for export markets. Additional and significant financial support for broader adoption would be necessary, and may be reasonable: On the narrow economics, green hydrogen may approach cost competitiveness with natural gas by the early 2030s in India and Brazil, according to BNEF, as well as many countries in Africa. This is a natural extension of renewable energy cost declines, which have made it the most cost-competitive source of electricity in many emerging economies, where it saved USD 32 billion across 534 GW in 2020, according to the International Renewable Energy Agency.
However, accessing these opportunities from today even as the green hydrogen supply chain matures will require significant financial support from developed countries or targeted domestic fiscal policies. Examples of this include Germany’s support for sector development on the continent, and India’s forthcoming mandate for green hydrogen adoption in refining and fertilizer production.
Grasping the opportunities posed by a new African green hydrogen industry will require a concerted effort from a diverse set of stakeholders. These include government ministries, project developers and financiers, international organisations and financial institutions, think tanks and technical experts and academic institutions.
Visionary private sector partners and other international collaborators can offer expertise, capacity and access to capital. At the same time, they can work with host governments and local and regional institutions to strengthen permitting processes and project structures that deliver on national and regional priorities for sustainable development and economic growth. Transparency and shared efforts to deliver each stakeholders’ needs will be essential to build broader trust and capabilities required for rapid, large-scale industry development.
A broad base of mission-aligned public and private sector partners interested in pre-competitive collaboration can send a strong signal to policymakers in developed countries of broad intention to work towards equitable, lasting industrial development outcomes with adoption of green hydrogen.
Please find below a list of members of the Alliance:
Kenya, Ministry of Energy
Mauritania, Ministry of Petroleum, Energy & Mines
Namibia, Green Hydrogen Commission
South Africa, Industrial Development Corporation
Together with the Spanish government, the Green Hydrogen Organisation (GH2) is hosting the Green Hydrogen Global Assembly & Exhibition at the Barcelona International Convention Centre on May 17-18 2022.
The assembly is not a commercial conference. It is an unprecedented gathering of stakeholders from government, the private sector and civil society aimed at galvanising global action to accelerate the uptake of green hydrogen.