Egypt approves H2 Industries' $3bn waste-to-hydrogen plant

Egypt’s Suez Canal Economic Zone has given H2 Industries preliminary approval for a $3 billion waste-to-hydrogen plant in East Port Said.

“The exciting part of the project is that it is the first big-scale, waste-to-hydrogen plant for a huge amount of hydrogen,” Michael Stusch, executive chairman and chief executive of H2 Industries, told The National.

The one-gigawatt hydrogen centre will be fed with four million tonnes of organic waste and non-recyclable plastic a year secured at the northern Mediterranean entrance to the Suez Canal.

It will produce 300,000 tonnes of green hydrogen annually.

Egypt has been ramping up its green hydrogen ambitions in recent months, especially as it is set to host the Cop27 climate summit in Sharm El Sheikh in November.

Hydrogen is projected to account for 12 per cent of global energy use and 10 per cent of carbon dioxide emissions reductions by 2050, driven by climate change urgency and countries’ commitments to net zero, according to the International Renewable Energy Agency.

Current annual hydrogen sales represent a market value of about $174bn, which already exceeds the value of annual trade in liquefied natural gas, and could grow to $600bn by 2050.

The current barriers to scaling up hydrogen are the steep costs of production, transport, conversion and storage, compared with high-carbon fuels.

Hydrogen comes in various forms, including blue, green and grey. Blue and grey hydrogen are derived from natural gas while green hydrogen is produced using renewable sources.

A cost reduction in green hydrogen, which is created from the electrolysis of water using renewable energy, can help to boost energy transition, according to Wood Mackenzie.

Egypt recently announced plans for a green ammonia plant with a capacity of 50 megawatts to 100 megawatts in the Red Sea town Ain Sokhna.

The plant will be developed by Norwegian green energy company Scatec, Abu Dhabi-Dutch joint venture fertiliser producer Fertiglobe, Orascom Construction and The Sovereign Fund of Egypt.

Mr Stusch said the waste-to-hydrogen plant is currently at the feasibility study stage, which should take about one and a half months, and is subject to final approval from the General Authority of the Suez Canal Economic Zone (SCZone).

The SCZone said in a statement that it is in “discussions with various companies working in the green hydrogen industry to set up clean energy projects” including H2 Industries.

If the project is approved, H2 Industries intends to start work immediately over three phases, with the final phase completed within five years.

“We really want to deliver the first green hydrogen [from the plant] at the end of 2025, beginning of 2026,” Mr Stusch said.

The project will be financed by partners, who will be shareholders in a special purpose vehicle, a legal entity created for a limited purpose.

H2 Industries, a global hydrogen generation and energy storage solutions company based in New York, was founded by Mr Stusch in 2010 and operates in 11 countries.

It specialises in developing technology that generates, stores and helps to transport green hydrogen using liquid organic hydrogen carriers (LOHCs).

“We have been developing hydrogen storage for 11 years. Until the last two years, nobody wants to hear about it,” Mr Stusch said. “Now, everybody wants to have green hydrogen as soon as possible.”

Converting waste is a fairly new way to produce hydrogen at about half the levelised cost of current hydrogen production technology, according to H2 Industries.

“It is much less expensive than producing hydrogen with electrolysis and also less expensive than producing grey hydrogen or blue hydrogen,” Mr Stusch said.

Green hydrogen is the only type produced in a climate-neutral manner through electrolysis. Blue hydrogen has a significantly lower carbon dioxide impact on the environment than grey hydrogen.

“The Suez Canal is, of course, also the perfect location where we can build up the first hydrogen hub in the form of LOHC for synthetic fuels because every tanker passes through the canal,” Mr Stusch said.

The plant has the added benefit of helping to solve the waste problem, as well as creating local jobs. H2 Industries has reached out to several countries interested in the concept in the last six months.

“Some countries are quicker, some countries are not that quick, and Egypt was very quick in responding,” Mr Stusch said.

“We need more of these projects as soon as possible because we need green hydrogen to stop climate change.”