Algeria

Green Hydrogen Vision

Algeria has set its sights on becoming a key player in the global green hydrogen market as part of its broader energy transition strategy. With vast renewable energy resources, including solar and wind, Algeria envisions using green hydrogen as a clean and sustainable energy source to diversify its energy mix, reduce carbon emissions, and decrease its reliance on fossil fuel exports. The country aims to produce green hydrogen for domestic consumption and export, positioning itself as a regional leader in renewable energy. Algeria’s green hydrogen vision is closely aligned with its efforts to modernise its energy sector, create new industries, and attract foreign investment. Algeria seeks to contribute to global climate goals by embracing green hydrogen while enhancing its energy security and fostering long-term economic growth. 

National Strategy

The 2023 National strategy focuses on developing a renewable (green) and clean (blue) hydrogen sector to drive Algeria’s energy transition, enhance energy security, and support climate change commitments. Key goals include: 

1. Becoming a regional and international leader in hydrogen production and export by 2040. 
2. Producing and exporting 30-40 TWh of hydrogen and derivatives to meet 10% of Europe's needs. 
3. Establishing a robust industrial and regulatory framework to foster hydrogen production, storage, transport, and use. 

Capacity Targets

• Production Capacity: By 2040, Algeria aims to produce 40 TWh of hydrogen, with 10 TWh for national use. 

• Renewable Energy Integration: The strategy emphasizes 70% solar photovoltaic and 30% wind for hydrogen production, with a focus on decentralized and centralized production systems. 

• Electrolyser Technology: Prioritization of PEM electrolysers for their adaptability and efficiency, targeting over 1 million tons of hydrogen production by 2040. 

Impact Targets

• Economic Impact: Generate $10 billion in annual revenues through hydrogen exports by 2040. 

• Environmental Benefits: Contribute to global climate goals by decarbonising industries such as transport, refining, and chemicals. 

• Energy Security: Reduce reliance on fossil fuels domestically and diversify the energy mix. 

• Industrial Development: Create new jobs and industries, promoting local manufacturing of hydrogen-related technologies and equipment. 

Policy and Project Spotlight

1. In February 2024, Germany and Algeria planned to enhance their cooperation in producing green hydrogen. The objective is to assist Algeria in developing hydrogen infrastructure and production capabilities. Both nations will establish a bilateral hydrogen task force within their energy partnership framework to facilitate this. Additionally, a hydrogen pilot plant is set to be constructed. To formalize these efforts, Federal Minister for Economic Affairs and Climate Action, Dr Robert Habeck, alongside Algerian Minister of Energy and Mining Mohamed Arkab, signed a joint declaration of intent in Algiers. 
2. In October 2024, Cepsa and Sonatrach signed a memorandum to conduct a feasibility study for developing an integrated project for green hydrogen production in Algeria, targeting the European market. The signing ceremony at the Oran Convention Center was presided over by Energy and Mines Minister Mr. Mohamed ARKAB, with the presence of officials, the Spanish Consul General, and CEOs of SONATRACH, SONELGAZ, and CEPSA. This MOU outlines a two-phase green hydrogen project: the first phase will assess feasibility and profitability, while the second will focus on project development. 

Financing

• Investment Needs: Estimated at $24.8 billion by 2040 for hydrogen production infrastructure, excluding storage costs. 

• Incentives: Fiscal and parafiscal advantages under the new 2022 investment code, alongside international green financing opportunities. 

• Public-Private Partnerships: Emphasis on leveraging partnerships with foreign investors and technology providers. 

Government green hydrogen lead 

Ministry of Energy and Mines