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Morocco offers new incentives for green hydrogen investors

Leila Benali, Morocco's minister of energy transition and sustainable development at the 6th United Nations Environment Assembly. She says the country is aiming for 7GW of renewable energy by 2030 James Wakibia/SOPA Images/Sipa via Reuters Connect
Leila Benali, Morocco's minister of energy transition and sustainable development at the 6th United Nations Environment Assembly. She says the country is aiming for 7GW of renewable energy by 2030
  • Projects get exemption from taxes
  • 1m hectares of land set aside
  • 100 investors already interested

Morocco has launched new incentives to attract investors in green hydrogen projects.

The Rabat government has allotted 1 million hectares (almost 3,900 square miles) of land for new projects as part of its “hydrogen offer,” the office of Morocco’s prime minister, Aziz Akhannouch, said in a statement.

The first phase involves making 300,000 hectares of land, divided into plots of 10,000 to 30,000 hectares, available to foreign and domestic investors wishing to produce green gas and its derivatives for export and domestic markets.

The offer applies to integrated projects covering electricity generation from renewable energies and electrolysis, converting green hydrogen into ammonia, methanol and synthetic fuel.

The new incentives also include exemptions from import duty and VAT.

Morocco has adopted an aggressive renewables strategy and has been working on a national hydrogen initiative since 2022.

“Green hydrogen is expected to be a crucial energy carrier and one of the main enablers of the energy transition and sustainable growth,” said the government, adding that it could be a turning point for the Moroccan economy.

The government said that a hundred national and international investors have already expressed interest in the projects.

The Moroccan green hydrogen map shows the country expects a demand of up to 30 terrawatt hours by 2030 and 307 TWh by 2050, which would require 2 gigawatts of renewable energy.  

The country will need $760 billion by 2050, for developments including infrastructure such as pipelines, ports, desalination plants, storage, and grid connections.

Leila Benali, Morocco’s energy transition minister, said last December that the country has been investing heavily to generate at least 7GW of its electricity from renewables by 2030.

Hydrogen gap

Thierry Lepercq, the Paris-based founder of HyDeal, a developer of mass-scale green hydrogen projects, said that Morocco was becoming a prime candidate to help address the so-called “European hydrogen gap”. 

This is partly a result of its proximity to the region and its free trade agreement with the European Union.

“The EU has recognised that North Africa, with its unique combination of outstanding renewable energy resources and immediate proximity to Europe is key to its supply of competitive green hydrogen at scale,” Lepercq said.

Studies by the state-owned National Office of Hydrocarbons and Mines on the Morocco-Europe pipeline were also progressing, he said.

Morocco’s government plans to develop so-called “industrial acceleration zones” for the ecosystem around green hydrogen.

Cornelius Matthes, CEO of Dii Desert Energy, an independent green energy think tank, said the majority of green hydrogen projects in Morocco were related to the production of green ammonia. Exports would be developed over the longer term.

The state-owned OCP Group holds 70 percent of global phosphate reserves and imports around 2 million tons a year of grey ammonia. Its objective is to become self-sustainable in terms of green ammonia by 2032.

Mathes said: “This creates an obvious business case to replace it via domestically produced green ammonia.” 

The hydrogen rainbow

  • Green hydrogen is produced on a carbon-neutral basis through water electrolysis. 
  • Turquoise hydrogen is created when natural gas is broken down into hydrogen and solid carbon with the help of methane pyrolysis.
  • Blue hydrogen is generated from the steam reduction of natural gas. 
  • Grey hydrogen is obtained by steam reforming fossil fuels such as natural gas or coal. 
  • Sometimes other colours are ascribed to hydrogen, based on how it is produced. For red, pink and violet hydrogen, the electrolysers are driven by nuclear power. 
  • Yellow hydrogen is hydrogen produced from a mixture of renewable energies and fossil fuels. 
  • White hydrogen is a waste product of other chemical processes, while the use of coal as a fuel produces brown hydrogen.

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