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One year to the day after signing an MoU (memorandum of understanding) with Germany to develop green hydrogen in Morocco, the kingdom initialed an agreement with the International Renewable Energy Agency (Irena) on 10 June, to study ways of involving the private sector in this new field. This is proof that it wants to continue betting on green hydrogen, despite a diplomatic spat with Germany in the spring.
In May 2021, in the wake of its MoU with Berlin, the Research Institute for Solar Energy and New Energies (Iresen) launched GreenH2 in Benguerir. The platform brings together researchers, public authorities and industry players such as the French company Engie; Germany’s Siemens Energy; the Moroccan companies Nareva and OCP; as well as the Maghreb’s Oxygène, which has a production capacity of 1,200 cubic metres per day (m3/d), and Air Liquide.
The latter two share 80% of the very modest Moroccan hydrogen market, which is said to be ‘grey’ rather than ‘green’. This hydrogen is obtained thanks to electricity from the national grid, 79% of which is still produced from fossil fuels. The term ‘green hydrogen’ is used when the energy source is renewable.
Margarine and turbines
“The hydrogen sold in the country, mainly by the Afriquia (Maghreb Oxygen) and Air Liquide groups, is intended for the food industry, to produce margarine for example, and for industry, to cool turbines,” says Adil Gaoui, president of the Association Marocaine pour l’Hydrogène et le Développement Durable (AMHYD), which groups together companies in the sector under the employers’ association (CGEM).
Grey hydrogen is used by the Taqa Morocco, Onee, Safiec and Siemens thermal power stations, notably for cooling the rotors and magnetic circuits. It is also used as a carrier in the electronics industry and as fuel in laboratories. Local SMEs, which supply hospitals with oxygen and also manufacture hydrogen, produce the Moroccan market’s remaining 20%.
The kingdom is far from being the only country on the continent that wants to lead in this sector, as Mauritania signed a project in this field last May, and Algeria also has great ambitions.
Furthermore, on an international level, Germany has announced a €9bn development plan while France and Spain want to devote €7bn and €1.5bn respectively, to the sector. Australia, Japan, China and South Korea are also investing in ‘green’ hydrogen production, while Saudi Arabia plans to build a colossal ‘green’ ammonia production unit for $4.2bn. Chile, a country with an energy profile similar to Morocco’s, also adopted renewable energies very early on and is hoping to export hydrogen to developed countries.
Faced with this fierce competition, the kingdom is “one of the best places in the world to produce hydrogen, thanks to its large renewable energy deposits and the possibility of combining wind and solar power to limit intermittency,” says Tarik Hamane, executive director of the development division of Masen, the Moroccan Agency for Sustainable Energy.
Two projects with an industrial focus
“Since electrical energy accounts for around 70% of green hydrogen’s production costs, these can be reduced to a minimum in Morocco,” he says. “The country is also close to the European market, with port infrastructures that make it possible to consider exporting hydrogen derivatives, as well as a connection to the Maghreb-Europe gas pipeline and close economic and institutional links with the other side of the Mediterranean.”
Thus, two industrial projects, in which German players play a central role, are being developed. The first is led by the fertiliser giant OCP, which imports between 1.5 and 2m tonnes of ammonia, a hydrogen derivative used in phosphate fertilisers, every year.
Launched in 2018 with the help of Fraunhofer, a German institute specialising in applied science research, and Jesa, a joint venture between OCP and the Australian group Worley, the project aims to develop a plant that produces ‘green’ ammonia from ‘green’ hydrogen. For the time being, it consists of a pilot plant that has a production capacity of 4 tonnes of hydrogen per day, which will be developed to industrial level if it proves successful.
“After a conceptual study phase, the project is now in the final tendering phase” of its implementation, says OCP, specifying that it will be operated – once completed – by Mohammed-VI Polytechnic University and the Green Energy Park (a research platform developed by Iresen) in Benguerir.
The second project, which is supported by Masen, has a production target of around 10,000 tonnes of hydrogen per year. It was conceived within the framework of the MoU with Germany and is expected to be financed by the German development bank KfW. “We have already carried out the first technical studies and [we] are currently recruiting consultants for the detailed studies to prepare the specifics regarding the calls for tender, which should be launched in 2022.”
“Several sites are being considered and the production start-up is planned for 2025, in accordance with the provisional schedule,” says Hamane. This is useful because ever since diplomatic relations were suspended between Morocco and Germany in March 2021, Masen and Iresen’s experimental projects have continued, even though they haven’t been in contact with the German partners. However, KfW told the German press in May that it could not say “to what extent this would lead to delays in the project’s implementation.”
This is bad news for Germany, which was counting on Morocco to achieve its 2045 energy neutrality plan. “Within the context of the energy transition, Berlin is at the forefront of adapting its industrial fabric before it is rendered obsolete,” says El Hassan Benabderrazik, former secretary-general of the ministry of general affairs and the ministry of agriculture.
Balancing the trade balance
To decarbonise its fuel consumption, the country plans to import green hydrogen on a massive scale, particularly from Morocco. According to two studies carried out by the German research institute Frenhaufer, the kingdom could cover between 2% and 4% of the world’s green hydrogen fuel needs by 2030.
The prospect of developing a new industrial sector and massively exporting fuel – a product potentially as strategic as oil – is very attractive to Morocco. Ever since it opened up to the world market, the kingdom has continued to seek and develop economic sectors that could make it reach the status of an emerging country and enable it to restore the balance of trade.
“Morocco is striving to keep up with the various technological changes linked to the global energy transition, taking into account its qualifications as well as its economic and social characteristics,” Aziz Rabbah, the minister of energy, mines and the environment, said at the beginning of 2021.
The illusion of green growth?
Despite its attractions, this plan – to produce green hydrogen on a massive scale to meet global demand – raises many questions, particularly ecological ones. “If Morocco wanted to meet 4% of global hydrogen demand, it would have to quadruple its current electricity consumption and cover 2,000km2 of desert with solar panels – a massive undertaking,” says Julian Carrey, a professor at the Institut National des Sciences Appliquées in Toulouse, deploring this example of “crazy projects led by Northern countries” that give “the illusion of green growth.”
Another major pitfall is that exporting green hydrogen considerably reduces the fuel’s ecological value. “Today, the production stage alone experiences a loss of 30%. If we add compression, conversion into methane or methanol, storage, transport, and the construction of compression and decompression plants, the losses increase considerably, and with them greenhouse gas emissions,” says Carrey.
Even though Morocco is aware of these limitations, it still wants to believe in the sector’s potential for export, while at the same time preserving a local market. “Developing hydrogen fuel should benefit the country’s industrialisation while also providing a possible outlet to create fuel cell, ammonia and biofuel factories,” says Tarik Hamane, executive director of Masen’s development division.
Gaoui, who is worried that Moroccan companies will be excluded from the industrial development that is about to take place, agrees with him. “The Moroccan-German MoU is attractive because it allows Morocco to get involved in the sector; but we expect the state to do for hydrogen what it has done for the car industry,” says Gaoui.
Do not repeat the Solar Plan’s mistakes
For the time being, Morocco seems to want to have it both ways. “We will probably be able to respond to global demand and be willing to pay for a premium product so that we can benefit from the green label, as well as to local demand, through OCP, the airlines and shipping companies,” says Tarek Hamane.
Therefore, if the Moroccan authorities dictate the direction of its hydrogen market, then it will not be necessary, unlike when it comes to producing electricity from renewable sources, for the state to assume all the responsibility. This is extremely fortunate because, although Morocco has exceeded its objectives in terms of wind power, it has so far failed to implement its Solar Plan. With hydrogen, it is clearly relying on the private sector.
“We are in the process of identifying customers,” says Gaoui, president of the Association Marocaine pour l’Hydrogène et le Développement Durable (AMHYD). “The Germans are not the only ones interested, we are also meeting with the Portuguese, Spanish, Dutch and Japanese.”
A market with exponential potential
Worldwide, hydrogen is decidedly ‘grey’. It is mainly produced by reforming natural gas, a process in which water vapour decomposes methane, and to a lesser extent by the electrolysis of water, as is the case in Morocco. However, it is also formed unintentionally while refining liquid hydrocarbons or producing coke, for example. Although the hydrocarbon industry produces 95% of the 74m tonnes of hydrogen put on the market each year, it also happens to be the main consumer of hydrogen, which is used in refining, to remove sulphur from hydrocarbons.
Morocco is seeking to position itself as an African pioneer in this niche…
The fertiliser industry alone, through the production of ammonia, consumes 31m tonnes each year. Hydrogen is also used in the production of methanol (12m tonnes) and steel (4m tonnes) from iron ore. Currently, three industrial giants – the US company Air Products, France’s Air Liquide and Germany’s Linde – are exploiting the chemical properties of hydrogen rather than its fuel properties. Some 85m tonnes (including methanol) are consumed each year worldwide, a figure that is expected to rise to 108 million by 2030, according to the latest report by the International Energy Agency (IEA).
These estimates do not include the production of hydrogen for use as fuel. With the advent of global warming, the need to reduce greenhouse gas emissions has become all the more obvious. Therefore, manufacturers have seized on this opportunity to replace oil with ‘green’ hydrogen, by using renewable energies; they believe that this revolution will lead to an exponentially growing market. In fact, according to BloombergNEF, it will be worth $700bn by 2050.
If the one billion cars, 190 million trucks and 25 million buses currently on the road in the world – not to mention the millions of ships in international transport – were to run on ‘green’ hydrogen, demand would reach 300m tonnes per year, according to the IEA. As such, Morocco is seeking to position itself as an African pioneer in this niche, through its solar plan and by deploying wind power.
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