Demand-driven Analysis for the Potential Green Hydrogen Market in Africa

Abstract

Global hydrogen demand reached 95 million tonnes (Mt) in 2023, with the chemical industry consuming 66% of the total hydrogen production annually. Africa consumes nearly 3 million tonnes of hydrogen annually, with 70% used in the chemical industry for nitrogen fertilizers. Most of the hydrogen production is based on fossil fuels, with 96% from natural gas, oil, and coal. This production contributes to 630 million tonnes of direct CO2 emissions, threatening the environment and requiring new alternatives. Green hydrogen is considered a critical energy alternative and a vital pillar in the energy transition. Building a green hydrogen value chain requires international partnerships, economic and trade relations, political ties, and investments due to the unbalanced renewable energy and technical potential of hydrogen production. Africa is at the core of geopolitical attention due to its large renewable energy potential for the green hydrogen economy, with a theoretical capacity of approximately 900 million tonnes per annum of hydrogen. Nevertheless, more than 90% of African green hydrogen projects are focused on exports. A few roadmaps developed and announced projects targeted the African domestic market. Therefore, this study aims to identify potential market opportunities for green hydrogen in Africa to support the domestic market in decarbonization and sustainable development. A qualitative, quantitative, and comparative analysis was conducted from a bibliographic research method and a survey. The results presented that the global hydrogen project proposals worldwide increased from 359 in 2021 to 1046 in 2023, Africa counting around 52 project proposals focused on exports, with the remainder targeting domestic demand within the transport, chemical, and fertilizer sectors. The demand for hydrogen in Africa is expected to reach 20 Mt by 2050. There is an increase in hydrogen demand. And, because Africa has one of the highest and fastest-growing populations and economic growth in the world. It both will demand energy and be able to supply it. However, currently, there are only six of the many African countries that are developing green hydrogen roadmaps. Therefore, sectors such as fertilizer, power generation, transport, and mobility are some of the most expected hydrogen applications to unlock the hydrogen market in Africa, in particular West Africa. Building a green hydrogen economy in Africa requires a clear and sustainable policy that secures hydrogen development and implementation. This study recommended three policy pathways to unlock the green hydrogen market in Africa particularlyWest Africa: (i) Formulate a Regulatory and institutional framework; (ii) Build strategic partnerships; and (iii) Foster regional policy market integration.