{"id":582006,"date":"2023-02-28T00:00:00","date_gmt":"2023-02-28T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/our-hydrogen-strategy-is-coming-soon-what-can-we-expect-from-it\/"},"modified":"2023-02-28T00:00:00","modified_gmt":"2023-02-28T00:00:00","slug":"our-hydrogen-strategy-is-coming-soon-what-can-we-expect-from-it","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/our-hydrogen-strategy-is-coming-soon-what-can-we-expect-from-it\/","title":{"rendered":"Our hydrogen strategy is coming soon. What can we expect from it?"},"content":{"rendered":"

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<\/span> <\/span>What do industry players want from our upcoming hydrogen strategy? <\/span>The government\u2019s <\/span>long-awaited hydrogen strategy should be released within weeks. We asked private-sector players and industry experts what they hope to see as they plan to establish green hydrogen plants in the local market. <\/span><\/p>\n

Hydrogen strategy? <\/span>The national hydrogen strategy <\/span>has been in the works<\/a><\/span> since 2021 and will provide a regulatory framework for the local production of green hydrogen, covering the whole value chain \u2014 supply, demand, and infrastructure. It\u2019s being formulated by the government with help from the <\/span>European Bank for Reconstruction and Development<\/a><\/span>. It was set to be <\/span>unveiled<\/a><\/span> during the COP27 climate summit in Sharm El Sheikh, but was delayed. Now we have it on good authority that the strategy is in its final stages and should be released before Ramadan. <\/span><\/p>\n

We have a lot of green hydrogen projects in the pipeline: <\/span>The state has inked <\/span>framework agreements<\/a><\/span> worth c. USD 83 bn for green hydrogen and ammonia plants, which would collectively produce up to 7.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year when fully operational. Prominent energy players involved in the projects include Masdar, Hassan Allam, Infinity, Fortescue Future Industries, Scatec, Fertiglobe, and Orascom Construction. <\/span><\/p>\n

The one thing on everyone\u2019s mind: Incentives. <\/span>The state needs to look into what kind of incentives and aid green hydrogen players need in order to help attract investment, energy consultant Ali Habib told Enterprise. \u201cI think our vision is not clear at the moment, especially with the current economic conditions. So we need policies and incentives to help attract investments,\u201d he added. Osama Fawzy, founder of hydrogen market intelligence platform <\/span>Hydrogen Intelligence<\/a><\/span>, says incentives could include \u201ctax breaks, custom breaks, [and giving] ammonia priority when it comes to port access.\u201d <\/span><\/p>\n

We need a green hydrogen regulatory body: <\/span>It\u2019s still unclear who will be responsible for green hydrogen production and the issuance of green hydrogen certificates in the country. Green hydrogen policy could be led by a number of bodies, including the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera), the Gas Regulatory Authority (GASREG), or an entirely new entity, Habib said.<\/span><\/p>\n

A one-stop hydrogen shop would help drum up investment: <\/span>\u201cI think what will help is to have some consolidation to make sure that all interests are aligned and create a one-stop-shop for hydrogen, so that interested investors would only need to talk to one entity that is empowered to be able to handle all the different aspects,\u201d Khalid Hamza, EBRD director and head of Egypt told us. The clarity provided by a one-stop shop would also increase the speed of project implementation, he added. <\/span><\/p>\n

Our first green hydrogen projects are already benefiting from efforts to streamline FDI: <\/span>A USD 5.5 bn green ammonia plant to be built by a firm named Egypt Green Ammonia Company, and the <\/span>100 MW green hydrogen plant<\/a><\/span> being developed by Scatec, Fertiglobe and Orascom Construction were among the first projects to <\/span>receive<\/a><\/span> the government\u2019s new <\/span>golden license<\/a><\/span>. The one-stop license aims to streamline the process of setting up new industrial and infrastructure projects. <\/span><\/p>\n

Infrastructure support should also be on the agenda: <\/span>\u201cA comprehensive hydrogen strategy should include infrastructure support for hydrogen players and a clear set of incentives to level the playing field and encourage investments,\u201d Fertiglobe\u2019s head of investments and projects, Tarek Hosny, told Enterprise. That could include common infrastructure for green hydrogen projects that would be shared among projects, helping companies save on costs. The first phase of Fertiglobe\u2019s green hydrogen plant with Scatec and Orascom Construction <\/span>began commissioning<\/a><\/span> in November and is expected to become fully operational by 2025, Hosny said. <\/span><\/p>\n

Companies could sell excess renewable energy: <\/span>\u201cIf a green hydrogen player is producing its own renewable energy, it should have the freedom to sell off and capitalize on whatever excess electricity it may have,\u201d Hosny said. <\/span>Net metering and feed-in tariffs<\/a><\/span> already allow households and businesses run on solar power to sell excess electricity generated back to the national grid.<\/span><\/p>\n

Time is of the essence: <\/span>\u201cI think Egypt has all the attributes to become one of the key hydrogen markets but competition is high, so speed is one of the key aspects to either making or breaking our ambitions,\u201d said the EBRD\u2019s Hamza. Fertiglobe\u2019s Hosny echoed his sentiments. \u201cTime is of the essence because now you have the whole world racing to set up green hydrogen and ammonia facilities,\u201d Hosny said, pointing to developments in the US, Canada, and Morocco. <\/span><\/p>\n

REMEMBER- <\/span>The Biden administration\u2019s landmark <\/span>Inflation Reduction Act<\/a><\/span> will offer US green hydrogen producers a USD 3.00 tax credit per kilo of hydrogen for their first 10 years of operation, pushing production costs in the US into sub-zero territory in the short term. <\/span><\/p>\n

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