Egypt: This $4bn plant will turn waste into hydrogen

By Sherif Tarek
Posted on Wednesday, 15 June 2022 13:35

Egyptian youth volunteers collect waste and plastic as part of a campaign to clean up the Nile River, in Cairo
Egyptian youth volunteers collect waste and plastic as part of a campaign to clean up the Nile River sponsored by Egypt's environment ministry in cooperation with VeryNile and Greenish, in Cairo, Egypt February 10, 2019. REUTERS/Amr Abdallah Dalsh

Energy company H2-Industries is behind construction of Egypt’s first – and one of the world’s largest – waste-to-hydrogen facilities. Its development will be an important step towards generating green hydrogen in the North African nation, says CEO and executive chairman, H2-Industries Michael Stusch to The Africa Report.

“We plan to implement the entire project in three phases,” Stusch says.

“Phase 1, representing 20% of the total size of the future power plant, will take approximately 24 months from start [of construction] to the first production of green hydrogen,” he says.

Production of the two other phases is scheduled to start within the following two years, according to Stusch. “Further expansions are possible, depending on waste being made available,” he says.

On 1 June, H2-Industries signed a memorandum of understanding (MoU) with the Suez Canal Economic Zone (SCZONE), where the project will be built alongside other green-hydrogen plants set to be developed by multiple companies.

The MoU for the waste-to-hydrogen project, whose estimated cost is $4bn, is not binding until H2-Industries finishes feasibility studies, however.

The New York-headquartered firm is expected to pen a final contract for the plant during the climate change conference COP27, which takes place in Egypt’s Sharm El-Sheikh on the Red Sea in November. An idea around a date for construction to begin should follow soon after that.

Clean energy

Egypt has been keen on shifting to clean energy in recent years, with a target to increase the power it generates through environmentally friendly sources by 2035 to 42%, or more than double the current share.

The third-largest Arab economy’s interest in green hydrogen production started to hit the headlines last year, amid an increasing global demand for the carbon-free fuel.

A host of companies have inked MoUs to build green-hydrogen plants in Egypt over the past months, including Norwegian company Scatec, Danish shipping firm Maersk, France’s EDF Renewables, Belgium’s DEME, and Emirati renewable energy company Masdar.

No bottleneck

“In the case of H2-Industries’ waste-to-hydrogen power plants, production of hydrogen is not dependent on the availability of solar and wind parks, or the availability of electrolysis equipment – both seem to be a bottleneck in a more rapid ramp-up of the global hydrogen economy,” Stusch says.

“The limiting factor here is the availability of waste… With the right commitment and support, enormous amounts of waste can be converted into clean hydrogen, without any delay,” he says.

Egypt is set to have the first waste-to-hydrogen plant of this size in the world

The targeted production capacity of the plant is 300,000 tons per annum, through converting 4m tons of organic waste and non-recyclable plastic.

“Egypt is set to have the first waste-to-hydrogen plant of this size in the world,” Stusch says.

Export opportunities

The production of green hydrogen will open a myriad of export opportunities that Egypt direly needs, with the third-most populous African country seeking to shrink its current account deficit, which stood at 4.6% in 2021 and is forecast to widen significantly this year due to the Ukraine war ramifications.

“Potential off-takers for emission-free hydrogen ‘made in Egypt’ certainly are governments in Europe and Asia,” Stusch says.

“In addition, private companies operating in the German and US aviation industry, in the European utilities sector, European traders of gases and fuels, as well as in the European cement, glass and steel production industry and various government entities [are] currently redeveloping their energy supply strategy.”

Attributes

What could give H2-Industries the upper hand in exporting green hydrogen in Egypt is the technology its facility will be using, Stusch explains.

“Because H2-Industries’ waste-to-hydrogen power plant will be using LOHC [Liquid Organic Hydrogen Carrier] as a storage and transportation medium [in contrary to gaseous hydrogen in pipelines, ammonia, liquidised hydrogen, etc.], our hydrogen can be stored and shipped safely and economically to off-takers anywhere in the world using existing infrastructure,” he says.

“[…] the Suez Canal Economic Zone is the perfect location for our project: geographically in the centre between Europe, Africa and Asia, providing modern infrastructure, access to waste, water and skilled human resources, as well [as] a supportive and committed administration.”

Domestic use?

Egypt could, at least theoretically, use green hydrogen to supply its industry and transport sectors with clean and affordable fuels, but such a transition might well be no doddle.

“For a nation or an industrial sector to be able to move away from fossil energy to CO2-emission free energy, it takes a complete transition of the economy,” Stusch says.

How quickly a nation or an industry can manage this energy transition, depends on much more than just generation capacities and availability of hydrogen.

“In most cases, hydrogen cannot simply replace other forms of fuel. Industrial processes and equipment have to be changed, supply chains, fuel distribution and transportation systems have to be changed and energy generation capacities have to be built, just to touch on a few points.

“How quickly a nation or an industry can manage this energy transition, depends on much more than just generation capacities and availability of hydrogen.”

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