Type of Publication : Report
Date of publication: May 2025
Site of the publication: The Africa Green Hydrogen Alliance (AGHA) | Green Hydrogen Organisation
Authors: The Africa Green Hydrogen Alliance (AGHA)
West Africa (and the continent as a whole) is often highlighted as being at the forefront of a carbon‑neutral future, thanks to its solar and wind energy potential. However, green hydrogen—another sustainable resource that often remains under the radar in conversations concerning climate change—is identified by the African Green Hydrogen Alliance as a necessary tool for reducing global emissions. The Alliance specifically emphasizes the importance of this energy source in the transportation sector and Africa’s role in this transition. According to the report, achieving carbon neutrality will require the production of hydrogen to combat the structural dependence on carbon‑intensive emissions that characterize the aviation industry and global transportation more broadly. Because hydrogen functions as a fuel, it has the capacity to replace gasoline while emitting only a fraction of the emissions—a capability that remains out of reach for most renewable energy sources. However, while highlighting the potential of this sustainable energy for Africa, the authors note that there is still a lack of investment in the industry, with most development remaining at an early stage. For this reason, the report underscores the importance of collaboration among African nations regarding the production and transportation of hydrogen on the global stage. Despite the existing challenges and the coordination required, this set of facts represents an opportunity for an energy‑independent future on a continent that has long struggled with external energy dependence. Pourquoi avons-nous choisi ce document ? L’Afrique de l’Ouest (et le continent dans son ensemble) est souvent présentée comme étant à l’avant-garde d’un avenir neutre en carbone, grâce à son potentiel en énergie solaire et éolienne. Cependant, l’hydrogène vert — une autre ressource durable qui passe souvent inaperçue dans les débats sur le changement climatique — est identifié par l’Alliance africaine pour l’hydrogène vert comme un outil indispensable à la réduction des émissions mondiales. L’Alliance souligne tout particulièrement l’importance de cette source d’énergie dans le secteur des transports et le rôle de l’Afrique dans cette transition. Selon le rapport, atteindre la neutralité carbone nécessitera la production d’hydrogène pour lutter contre la dépendance structurelle aux émissions à forte intensité de carbone qui caractérise l’industrie aéronautique et, plus largement, le secteur mondial des transports. L’hydrogène, en tant que carburant, a la capacité de remplacer l’essence tout en n’émettant qu’une fraction des émissions — une capacité qui reste hors de portée pour la plupart des sources d’énergie renouvelables. Cependant, tout en soulignant le potentiel de cette énergie durable pour l’Afrique, les auteurs notent que les investissements dans ce secteur font encore défaut, la plupart des projets de développement en étant encore à un stade précoce. C’est pourquoi le rapport insiste sur l’importance d’une collaboration entre les pays africains en matière de production et de transport d’hydrogène à l’échelle mondiale. Malgré les défis existants et la coordination nécessaire, cet ensemble de faits représente une opportunité pour un avenir énergétique indépendant sur un continent qui a longtemps souffert d’une dépendance énergétique vis-à-vis de l’extérieur.Why do we choose this document?
African energy interests are often underrepresented on their own continent. To achieve genuine energy independence—and fully benefit from a rapidly expanding market—West Africa must strengthen internal cooperation to ensure equitable access in the face of dominant global powers. Conversely, without collective alignment, the integration of the technologies required to establish such a system will remain insufficient to unlock its full potential. Due to the absence of a coordinated strategy, investments in this sector remain scattered, despite the existence of operational hydrogen plants, notably in Namibia and Egypt. These facilities rely on diverse minerals such as lanthanum, yttrium, and iridium, which are extracted across the continent, further entrenching the demand for international collaboration. For this reason, the report suggests that each African region should specialize in a specific stage of the production process in order to maximize the economic and strategic benefits of this opportunity. Moreover, thanks to its proximity to global markets, West Africa is well positioned to reap significant gains from an industry that remains largely untapped. However, the region’s lack of appropriate technologies and structural investment serves as a reminder to WATHI‑area countries of the need to develop and finance the infrastructure required to foster energy innovation. Ultimately, with targeted investment in hydrogen, the African continent has the potential to secure a strong position in the global energy market. Yet without the sustained commitment this requires, Africa risks missing out on an extraordinary source of wealth. Quels enseignements peut-on en tirer pour les pays de la zone WATHI ? Les intérêts énergétiques africains sont souvent sous-représentés sur leur propre continent. Pour parvenir à une véritable indépendance énergétique — et tirer pleinement parti d’un marché en pleine expansion —, l’Afrique de l’Ouest doit renforcer sa coopération interne afin de garantir un accès équitable face aux puissances mondiales dominantes. À l’inverse, sans alignement collectif, l’intégration des technologies nécessaires à la mise en place d’un tel système restera insuffisante pour libérer tout son potentiel. En l’absence d’une stratégie coordonnée, les investissements dans ce secteur restent dispersés, malgré l’existence d’usines d’hydrogène opérationnelles, notamment en Namibie et en Égypte. Ces installations s’appuient sur divers minéraux tels que le lanthane, l’yttrium et l’iridium, qui sont extraits à travers le continent, ce qui renforce encore la nécessité d’une collaboration internationale. C’est pourquoi le rapport suggère que chaque région africaine se spécialise dans une étape spécifique du processus de production afin de maximiser les avantages économiques et stratégiques de cette opportunité. De plus, grâce à sa proximité avec les marchés mondiaux, l’Afrique de l’Ouest est bien placée pour tirer des bénéfices significatifs d’un secteur qui reste largement inexploité. Cependant, le manque de technologies adaptées et d’investissements structurels dans la région rappelle aux pays de la zone WATHI la nécessité de développer et de financer les infrastructures requises pour favoriser l’innovation énergétique. En fin de compte, grâce à des investissements ciblés dans l’hydrogène, le continent africain a le potentiel de se forger une position solide sur le marché mondial de l’énergie. Mais sans l’engagement durable que cela requiert, l’Afrique risque de passer à côté d’une source extraordinaire de richesse.What lessons for the countries of the WATHI Zone?
Extracts from pages: 27, 28, 29, 30, 31, 33, 35, 36, 37, 47, 48, 50, 52, 56, 64, 65, 67
Introduction
Due to its abundant RE resources, Africa is poised to become a leader in the global GH2 market. The continent’s vast potential for producing affordable and sustainable GH2 positions it as a key player in the global energy transition, while simultaneously addressing local energy challenges. GH2 potential, however, is country-specific and depends on local resources and policies. Different regions and countries in Africa are therefore expected to roll out GH2 at varying speeds and scales. Countries such as South Africa, Morocco, and Egypt are already spearheading large-scale projects aimed at producing and exporting GH2 to international markets. However, the potential for GH2 in Africa extends beyond export opportunities and could also drive substantial industrial growth across the continent, especially in energy-intensive sectors like steel, cement, and ammonia production. The potential thus exists in nearly all countries to create a GH2 industry through niche projects that can eventually be scaled and diversified.
The transition to GH2 offers the added benefit of generating new jobs, stimulating economic growth, and enhancing energy security while reducing reliance on fossil fuels. The development of GH2 infrastructure could foster greater regional cooperation, improve energy access, and align with Africa‘s broader climate resilience goals, positioning the continent as a global leader in sustainable energy and driving both environmental and economic transformation.
Limitations
This report draws exclusively on secondary data and publicly available sources, including official government publications, international agency reports, academic research, and reputable databases. While efforts were made to gather the most accurate and up-to-date information, the availability, granularity, and reliability of data vary widely across countries. Some nations provide robust, detailed, and regularly updated documentation (e.g., national strategies, policy roadmaps, and market readiness assessments), while others offer only limited or outdated information. In certain instances, key documents were inaccessible due to restrictions or lack of publication. As a result, the analysis presented herein should not be regarded as definitive or exhaustive. Instead, it represents a well-informed and conscientious attempt to synthesize and interpret the current landscape of GH2 sector in Africa based on the best data available at the time of writing.
Global Market Overview
The GH2 market is expanding rapidly, driven by the global shift to clean energy, rising investments in electrolysis projects, and supportive policies. Demand for GH2 and blue hydrogen (BH2) is growing across continents and industries such as transportation, heavy industry, and power generation, with substantial market expansion expected over the next decade. Stakeholders are increasingly advancing electrolysis technology, storage, and distribution, further solidifying GH2’s critical role in the energy transition.
The transition to GH2 offers the added benefit of generating new jobs, stimulating economic growth, and enhancing energy security while reducing reliance on fossil fuels. The development of GH2 infrastructure could foster greater regional cooperation, improve energy access, and align with Africa‘s broader climate resilience goals, positioning the continent as a global leader in sustainable energy and driving both environmental and economic transformation
Hydrogen Demand: Past, present and projections
Global hydrogen demand has steadily risen over the past two decades, increasing from approximately 60 Mt in 2000 to 90 Mt in 2020, reflecting a compound annual growth rate of 2% (IEA, 2021). This growth has been primarily driven by demand from the refining, chemical, and industrial sectors, where hydrogen is used for processes such as ammonia production, methanol synthesis, and hydrocracking in oil refineries. Since 2021, demand has accelerated significantly, reaching 94 Mt in 2021, 95 Mt in 2022, and over 97 Mt in 2023.
Nearly all supplied hydrogen is still produced using carbon-intensive methods, such as steam reforming of natural gas and coal gasification, without carbon capture and storage (CCS). A significant portion comes from by-products generated in facilities primarily designed for other industrial processes. In contrast, GH2 and BH2 account for less than 1 Mt, representing less than 1% of global hydrogen consumption. Although GH2 still represents a small share of global hydrogen consumption, its demand is expanding rapidly. This growth is driven by the increasing recognition of hydrogen’s role in the global energy transition, alongside rising investments in hydrogen-based technologies. Sectors like transportation and industrial decarbonisation are seeing heightened interest, supported by government policies, financial incentives, and commitments to net-zero emissions.
Various projections highlight the crucial role of GH2 (and BH2) in achieving an NZE target by 2050, though estimates vary significantly across different scenarios (see Figure 3).
As depicted in Figure 3, all projections point to the complete phase-out of grey hydrogen (GrH2) production by 2050. In its place, GH2 is anticipated to emerge as the dominant production method, driven by the increasing emphasis on sustainable and low-carbon energy sources. Blue hydrogen is expected to play a critical role during this transition, acting as a bridging technology to support the shift toward GH2. This transition is likely to be facilitated by advancements in technology, government policies, and market investments, all of which will help accelerate the adoption of GH2 while reducing reliance on GrH2.
Key Players and Drivers
The GH2 industry is rapidly expanding due to the global drive to decarbonise economies and shift towards cleaner energy. Four key player groups are shaping this transition: industries aiming to cut carbon emissions, electrolyser manufacturers scaling production to meet demand, financial institutions funding infrastructure projects, and public institutions (e.g., governments, regional organisations, and commissions) implementing supportive policies and regulations.
Industries heavily reliant on fossil fuels, such as steel, chemicals, refining, transportation, and power generation, are increasingly turning to GH2 to reduce their carbon footprint. This triggers technological innovation and large-scale adoption, as companies seek cost-effective and efficient hydrogen solutions. In response, electrolyser manufacturers are scaling production, focusing on cost reductions and improved efficiency. At the same time, financial institutions invest in infrastructure, facilitate public-private partnerships, and provide funding to accelerate deployment. Public institutions support the sector through policies, regulations, and incentives to ensure GH2’s long-term viability as a key component of the clean energy transition.
Global policies and strategies for GH2
Since 2018, countries and regions across the globe have been introducing policies, strategies and roadmaps to guide and drive the growth and adoption of GH2, establishing mechanisms to support its production, storage, and utilisation. As of May 2024, at least 74 countries were actively engaged in strategic planning for the green and blue hydrogen sector. This includes 46 national and supranational strategies, along with eight published hydrogen roadmaps, while at least 20 more countries were in the process of developing or releasing similar plans (IRENA, 2024).
As countries and regions strive to procure the necessary GH2 to meet their targets, many will face challenges in producing sufficient GH2 due to limitations in domestic land availability and/or RE resources. As a result, these regions will need to import GH2 from areas with abundant RE resources, high availability factors, and ample land for large-scale production. Africa is particularly well-positioned to meet this demand, offering significant potential as a major exporter of GH2, which could boost its economy and create hundreds of thousands of jobs. African Green Hydrogen Report Africa’s competitive advantage lies in its abundant RE resources, including solar, wind, and hydroelectric power, which provide a strong foundation for large-scale GH2 production. Additionally, its proximity to key international markets, such as Europe and Asia, further strengthens its appeal as a supplier.
At the same time, financial institutions invest in infrastructure, facilitate public-private partnerships, and provide funding to accelerate deployment. Public institutions support the sector through policies, regulations, and incentives to ensure GH2’s long-term viability as a key component of the clean energy transition
Africa’s RE potential
Africa is home to some of the world’s richest RE resources, with abundant sunlight across the continent. In addition, specific regions like East Africa’s Rift Valley have strong geothermal energy potential, while coastal areas and the Horn of Africa are ideal for wind power. The figure below illustrates the theoretical generation potential of different onshore RE technologies for Africa as a whole and by region.
Based on current estimates, Africa’s RE potential is projected to be more than 1,000 times larger than its estimated electricity demand in 2040. This highlights an immense surplus of RE resources, positioning the continent to meet its future energy needs and emerge as a major exporter of clean energy, making it a key player in the global energy transition.
Status of GH2 projects in Africa
By October 2024, over 110 GH2-related projects were reported across Africa (IEA, 2024). However, despite these ambitious projections, Africa’s hydrogen sector remains in its early stages, with most projects still in the concept and feasibility study phases.
The distribution of hydrogen projects across Africa is influenced by several factors, including RE potential, proximity to major markets, and industrial demand. Countries with abundant solar and wind resources, like Mauritania, are attracting significant interest, while those with established renewable infrastructure, such as Egypt and Morocco, are seeing a growing number of hydrogen projects.
Value chain creation
Developing a robust GH2 value chain in Africa presents economic and environmental opportunities and could drive economic growth through job creation, infrastructure development, and export opportunities. Additionally, from an environmental perspective, GH2 offers a pathway to decarbonising industries, reducing reliance on fossil fuels, and enhancing energy security. However, challenges remain in ensuring cost competitiveness and developing policy frameworks to support market growth.
The GH2 value chain encompasses several interconnected stages. Industrial decarbonisation, energy sector integration, and transport applications depend on reliable supply chains from upstream and midstream investments. The availability of low-cost RE and water resources directly influences the scalability of GH2 production. Thereafter, effective compression, liquefaction, and conversion into carriers (e.g., ammonia and methanol) are essential for ensuring hydrogen reaches end users safely and efficiently. Infrastructure investments in pipelines, ports, and storage are critical enablers for domestic adoption and export market access.
The distribution of hydrogen projects across Africa is influenced by several factors, including RE potential, proximity to major markets, and industrial demand. Countries with abundant solar and wind resources, like Mauritania, are attracting significant interest, while those with established renewable infrastructure, such as Egypt and Morocco, are seeing a growing number of hydrogen projects
Upstream: GH2 production
The upstream segment of the GH2 value chain involves the production of hydrogen through electrolysis, powered by RE sources. While Africa has abundant RE potential, grid constraints and water scarcity pose challenges for scaling GH2 production (GIZ, 2023c). The key segments of this value chain are illustrated in the figure below:
Midstream: Conversion, storage and transportation
Current Demand Profiles
Key Insights
- Industrial Focus: Across Africa, current hydrogen demand is concentrated in industrial applications, particularly fertiliser production, oil refining, and chemical industries. South Africa and Egypt have the most established industrial hydrogen usage, while countries like Namibia and Mauritania have minimal current demand.
- Import Dependencies: Several countries, including Morocco, Kenya, and Tunisia, currently depend heavily on imports of hydrogen-based products, particularly ammonia for fertiliser production. This import dependence creates a strong economic case for domestic GH2 production to enhance self-sufficiency.
- Production Methods: Existing hydrogen production is almost exclusively “grey” hydrogen derived from fossil fuels through processes like steam methane reforming, creating significant carbon emissions. The transition to GH2 production represents a major opportunity for emissions reduction.
- Regional Variations: North African countries (Egypt, Morocco, Algeria) generally have more established hydrogen consumption patterns due to their larger industrial bases, while sub-Saharan countries often have more limited current hydrogen applications. This baseline demand profile provides a foundation for understanding the potential transition pathways to GH2 across different African contexts. Countries with existing industrial hydrogen demand have natural starting points for GH2 substitution, while those with limited current demand may focus on developing new applications aligned with their economic development priorities.