Algeria is seeking to strengthen its position in the clean energy market by making hydrogen a pillar of its diversification strategy, with an eye on exports to Europe. The country has a vast expanse of sun-drenched land, which is needed for hydrogen production, while its northern Mediterranean coast sits adjacent to southern Europe.
The production process uses renewable electricity, such as that produced from solar panels, to split water molecules into hydrogen and oxygen through electrolysis. The cheaper and more abundant the electricity, the more competitive green hydrogen projects become.
Algeria’s desert regions get around 3,500 hours of sunshine per year. Many regions also have wind energy potential, with an estimated production capacity of around 35,000 megawatts (MW). However, turning potential into production will require a realistic approach, with several structural challenges ahead and a need for substantial, sustainable financing.
The largest African country, and the tenth largest country in the world, Algeria could have a big role to play in the renewable energy market, given its geographical advantages. Key to the role of hydrogen will be the 3,300km SoutH2 Corridor project, a dedicated hydrogen pipeline network designed to take renewable ‘green’ hydrogen from North Africa to Europe.
“Algeria is not merely a potential supplier,” says Mohamed Ghazli, an Algerian international expert on the energy transition based in Germany. “It is the closest and safest option for Europe through the SoutH2 Corridor project.” The corridor will link production areas in Algeria and Tunisia with Italy, Austria, and Germany. Its backers aim to provide import capacity of more than 4 million tonnes (Mt) of green hydrogen annually, relying heavily on repurposed existing infrastructure, with operations scheduled to begin in the early 2030s.
The European Union has included components of the corridor among its Projects of Common Interest initiative. This capacity would represent around 40% of the green hydrogen imports targeted under the EU’s clean energy plan for 2030. REPowerEU aims for the bloc to produce 10Mt a year and import a further 10Mt from outside the EU by 2030. By 2050, the European Commission wants renewable hydrogen to meet around 10% of the EU’s energy needs.
A big structural shift is needed to reduce net greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels, paving the way for climate neutrality by 2050. This will require an accelerated transition towards renewable energy sources, clean low-emission technologies, and reduced dependence on fossil fuels.
The Commission plans to increase electrolyser capacity to 40GW and annual production to 10Mt within the EU by 2030. To narrow the cost gap and stimulate investment, the Commission established the European Hydrogen Bank in 2022 to mobilise the money needed to support the renewable hydrogen market. Europe has also been developing dedicated pipeline networks to transport the fuel from production hubs to major centres of consumption.
