Morocco’s Potential as Europe’s Hydrogen Supplier Faces Challenges

Morocco has been touted as a potential major supplier of low-cost green hydrogen to Europe, leveraging its abundant solar and wind resources in the south as well as its proximity to Spain for a pipeline connection. However, uncertainty around demand, export infrastructure, and incentive policies on both sides appears to be slowing progress.

According to a recent report by Hydrogen Insight, Morocco aims to produce 4TWh of hydrogen for domestic use and 10TWh for export annually by 2030. The country’s national hydrogen strategy, unveiled in 2021, seeks to capitalize on Morocco’s renewable energy potential to produce inexpensive green hydrogen for both local and export markets.

The European Union, which has set a target to import 10 million tonnes of renewable hydrogen per year by 2030, sees North Africa as a hub for production and has signed agreements with Morocco to cooperate on regulatory frameworks and finance production and export infrastructure.

At the COP28 climate summit last December, the EU pledged €50 million to support Morocco’s broader decarbonization efforts, which include but are not limited to hydrogen.

Proponents argue Morocco could deliver hydrogen to Europe more cheaply than production in most parts of Europe because of its world-class solar and wind resources. Its proximity to Spain also enables a pipeline connection, seen as the cheapest transport method compared to shipping hydrogen long distances.

However, analysts have debated whether Morocco’s production cost advantage would be sufficient to offset the high cost of building an underwater hydrogen pipeline to Spain. So far, no formal agreements have been made between the countries on such a project.

While export projects face uncertainties, Morocco benefits from potential domestic green hydrogen demand from large fertilizer producer OCP Group. OCP plans to invest $8.5 billion in green hydrogen and ammonia production to hedge against fossil gas price volatility affecting its operations. The plants would allow OCP to make zero-carbon fertilizer products.

Still, most of the proposed export-oriented projects in Morocco remain in early planning stages. French developer HDF Energy and Moroccan firm Falcon Capital announced an 8GW green hydrogen project last November, while Abu Dhabi’s TAQA reportedly considers a 6GW facility. But development is on hold until Morocco finalizes details of its hydrogen incentive program.

Morocco has proposed an ambitious 5,600 km hydrogen pipeline to link 11 West African nations, including Mauritania. The pipeline would run parallel to the planned $25 billion Nigeria-Morocco natural gas pipeline, which is set to begin construction this year.

The goal of the Nigeria-Morocco gas pipeline is to replace supplies that were cut off when Algeria redirected exports away from Morocco in 2021. Algeria had previously sent gas to Morocco via the Maghreb pipeline but is now transporting it to Spain and Portugal through the Medgaz pipeline instead.

A growing list of developers have already proposed gigawatt-scale green hydrogen projects in Morocco. TotalEnergies’ subsidiary Total Eren, now fully owned by the oil major, has acquired 170,000 hectares of land from the Moroccan government in the Guelmim-Oued Noun region. TotalEnergies plans a MAD 100 billion ($9.9 billion) renewable energy project there, drawing on 10GW of wind and solar capacity.

The Guelmim-Oued Noun region has also been proposed as the site for a major renewable ammonia facility by developer CWP Global. The proposed project would involve building up to 15GW of wind and solar capacity to power production of green ammonia in the southwestern city of Tan-Tan.

To realize its hydrogen ambitions, Morocco likely needs to see stronger signals from Europe on long-term policy support and demand guarantees. Clear incentives from Morocco’s government could also accelerate development. While the country has strong potential, an unclear path to bankability seems to be slowing progress for now.