Via EnergyCentral, a report on the politics of North Africa’s green hydrogen industry in Morocco, Algeria, and Mauritania:

Europe’s growing interest in securing green hydrogen from North Africa is part of a strategic effort to enhance its energy security. The promise of green hydrogen projects in Morocco, Algeria, and Mauritania is substantial, offering economic growth and job opportunities. However, numerous factors limit these countries’ ability to develop robust local green hydrogen sectors, while political disputes—particularly around Western Sahara—complicate regional collaboration. European actors can play an important role in advancing green hydrogen’s development in the region, but must tread carefully to secure local buy-in and avoid exacerbating tensions within or between these countries.

Challenges for North African exporters

Potential North African exporters face challenges including securing buyers, establishing export infrastructure, and ensuring local acceptance. All three countries lack certainty about European demand, including agreements with offtakers which are needed to enable investment. This problem is most acute in Mauritania, where hydrogen will likely be developed primarily as an export in the short to medium term. Alongside ambitions to export green hydrogen, Morocco’s is proceeding with plans to use green ammonia in fertilizer production, given its strong potential for local hydrogen offtake. Algeria, which has long relied on fossil fuel exports, has traced a less ambitious timeline. It is considering the development of green hydrogen exports to Europe and is exploring its use to decarbonize existing export products like fertilizers, cement, and steel. When it comes to infrastructure, Algeria and to a lesser extent Morocco could benefit from existing pipelines and short distances to the European market. However, if Morocco’s gas demand triples by 2040 as projected, gas imports could preclude the use of existing infrastructure for hydrogen exports. Mauritania has no pipelines that can be repurposed and proposed offshore pipelines come with geopolitical risks. Shipping infrastructure is therefore more attractive for Mauritania but would require significant investments in both ports and basic infrastructure like roads.

All three countries are water-scarce (and becoming more so) and will therefore likely need to use either desalinated water or treated wastewater to avoid exacerbating water stress and social conflicts around water. However, desalination risks adversely impacting marine ecosystems, which are crucial for coastal livelihoods and economies, especially in Mauritania. Moreover, to ensure the long-term success of hydrogen development in the region, local communities must see tangible benefits. Previous experiences with large-scale projects, like Morocco’s Noor CSP plant, have yielded only mixed results in this regard.

Regional politics inhibit cooperation

Cooperation on hydrogen between Algeria, Mauritania, and Morocco is minimal due to regional tensions fuelled by historical rivalry between Morocco and Algeria, which is exacerbated by the conflict over the Western Sahara region. The rivalry is extending into green hydrogen, with both Morocco and Algeria aspiring to be regional hydrogen leaders and viewing the other as a competitor. Morocco is assertive in its leadership ambitions, maintaining a significant partnership with the International Renewable Energy Agency (IRENA) and spearheading the launch of the African Green Hydrogen Alliance. Algeria remains more isolated, emphasizing its sovereignty and selectively engaging on hydrogen as a potential new source of export revenues. Mauritania, neutral in regional politics, maintains a careful balance between Morocco and Algeria. It also does not engage substantively on hydrogen with its southern neighbours who have embarked on collaboration within the context of ECOWAS. For Mauritania, exports to Europe via pipeline are challenging due to territorial questions related to the Western Sahara conflict. Shipped exports would allow it to avoid these issues, making this more likely in the current geopolitical context.

The importance of European partners

Morocco, Algeria, and Mauritania exhibit distinct approaches to international partnership, shaped by their resources, geopolitical relations, and national identities. Algeria’s cautious strategy keeps hydrogen projects primarily under the control of state-owned enterprises (SOEs), limiting international engagement to safeguard sovereignty. Any partners engaging with Algeria will do so through its SOEs. However, its interest in European import prospects has driven engagement with international partners on hydrogen, including bilateral cooperation with Germany, Italy, and China. Mauritania is engaging actively with G7 allies and development banks on energy and hydrogen policy. This reflects both its need for technical and financial assistance and its strategic importance for G7 countries who are keen to maintain Mauritania’s status of an “island of stability” in the increasingly insecure Sahel region. Morocco has the highest level of international engagement from all three countries, but the Moroccan government is also increasingly asserting itself as a player in its own right. It is developing its new hydrogen policy (“Offre Maroc”) with minimal international influence, befitting its growing self-confidence as a regional leader and concern about over-dependence on foreign investment and debts.

Germany emerges as an important partner across all three countries, with different engagement depending on national contexts. In both Morocco and Algeria, its longstanding energy cooperation has provided a starting point for further cooperation. In Morocco, Germany has been influential in the development of the national hydrogen roadmap and is funding a first electrolysis project. Germany has been instrumental in Algeria by providing studies on Algeria’s hydrogen export potential and has shown interest in funding electrolysis as well. In Mauritania, Germany funds the G7 CONNEX Initiative, which is implemented by GIZ and supports the Mauritanian government in its negotiations with hydrogen developers. The EU is also an important partner in all three countries, engaging at the political level and for dialogue on hydrogen standards. Meanwhile the EIB has increased its engagement and is exploring possible financing of the sector. In June 2022, the EIB and Mauritanian President Ghazouani signed a joint declaration with the intent to cooperate on renewable energy and green hydrogen as part of the EU’s Global Gateway project.

Overall, international development banks are most involved in Mauritania and least in Algeria, which is wary of accepting external financing. European hydrocarbon firms are important partners in Algeria. In Morocco and Mauritania, both hydrocarbon players and renewable energy developers are forming consortia for hydrogen projects. However, in Mauritania this is largely international firms while in Morocco there are more local developers and offtakers.

Geopolitical considerations

Hydrogen trade between Europe and North Africa will impact and be impacted by geopolitical issues, in particular the Western Sahara question. Although European countries and the EU do not plan on devoting public funding to hydrogen projects in Western Sahara, the Moroccan government has provided large tracts of land for hydrogen developers in the Western Sahara and is enabling private hydrogen developments in this territory. In addition, projects like the Hydeal consortium’s proposed green hydrogen pipeline, which would bypass Western Sahara, could still provoke controversy or upset the delicate balance Mauritania aims to strike between Algeria and Morocco. Shipped hydrogen would sidestep this controversy and help Mauritania avoid further increasing its economic reliance on Morocco. European support for hydrogen may also impact the political balance in North Africa and beyond, as Algeria and Morocco vie for influence on the continent. Morocco aims to position itself as a gateway to Africa, while Algeria is an important security player. Supporting countries in their efforts to become hydrogen leaders can lend them further regional stature and influence and therefore indirectly affect regional politics. If international companies are involved in hydrogen projects in Western Sahara or purchase hydrogen from the region, this would likely be perceived as granting additional legitimacy to Morocco’s claim to the territory. This in turn would raise tensions with Algeria.

In addition, projects in Morocco and Algeria hinge on partnership with governments and major SOEs, making them highly vulnerable to local political dynamics. Situations where political leaders’ interests diverge substantially from local communities’ have considerable potential to jeopardize projects. Projects will require large tracts of land in regions where the population is often marginalized and the government may not directly redistribute revenues from land sales or energy production to locals, generating the potential for popular backlash against the state and its international partners. Sensitivity to such arrangements is heightened by the legacy of European colonialism in the region, including a history of resource extraction in collaboration with local elites, to the detriment of local populations.

Another concern is the comparative weakness of the local environmental ministries, which may not be empowered to sufficiently assess or address projects’ environmental impacts. As regulatory scrutiny of companies’ international supply chains is increasing through German and EU legislation on due diligence, these factors could pose additional risks to European partners active in North Africa. As this regulatory scrutiny will extend to SOEs like Sonatrach or OCP, there is also the potential for political friction between Europe and partner countries if this appears critical of government.

The potential for further cooperation

Navigating these geopolitical questions will be complicated, but there are also complementarities between the goals of potential exporters and European importers, which could offer mutual benefits and strengthened relations. Algeria’s interest in hydrogen exports and selling decarbonized products to the EU has enabled close exchange with Germany and an increased openness to foreign investment with promise for further cooperation. Morocco’s ambitions for green technology and local development may complement European hopes to diversify critical manufacturing of clean energy components and develop support for its climate and energy agenda in the region. Mauritania’s hopes for green hydrogen to deliver economic development as well as crucial energy and water infrastructure could strengthen local stability in a region in turmoil. European efforts to facilitate hydrogen developments could counterbalance Russian and Chinese engagement in the region. A key to success will be to develop approaches that deliver tangible economic benefits and domestic jobs. To do so, European governments should support private investments while ensuring sustainable models of infrastructure development that avoid negative impacts on local populations.