Global energy systems are undergoing a structural transformation driven by the urgency of climate change mitigation, long-term sustainability concerns, and the need to reduce dependence on fossil fuels. The Paris Agreement and subsequent national commitments to carbon neutrality by mid-century have reinforced the necessity of deep and rapid reductions in greenhouse gas emissions across all sectors of the economy. Although renewable electricity generation—particularly solar photovoltaics and wind power—has expanded significantly over the past decade, the electrification of final energy demand faces intrinsic limitations in sectors characterized by high-temperature industrial processes, energy-dense fuels, and long-duration storage requirements [1].
Green hydrogen has emerged as a pivotal solution within this evolving energy paradigm. Unlike grey hydrogen, produced from fossil fuels with significant carbon dioxide emissions, or blue hydrogen, which relies on carbon capture and storage with unresolved long-term risks, green hydrogen is generated through the electrolysis of water using renewable electricity, resulting in near-zero lifecycle emissions [2]. Its importance lies not only in its low-carbon profile but also in its versatility: hydrogen can serve as a fuel, an energy carrier, a storage medium, and a chemical feedstock.
From a systemic perspective, green hydrogen enables sector coupling by linking electricity generation with industry, transport, and chemical production. It also provides a mechanism for absorbing surplus renewable electricity, thereby reducing curtailment and enhancing grid flexibility [3]. Consequently, hydrogen is increasingly perceived not as a standalone energy source, but as an integrative component of future low-carbon energy systems.
This article aims to provide a holistic and interdisciplinary analysis of green hydrogen development, bridging global market dynamics, regional opportunities in the MENA region, and national strategic considerations in Algeria. Particular attention is given to the water–energy nexus, techno-economic competitiveness, and the geopolitical dimensions of hydrogen trade, in line with the scope and objectives of EcoMENA.
Conceptual Framework of Green Hydrogen Production
1. Hydrogen classification and production pathways
Hydrogen is commonly classified into three categories, according to its production pathway and associated carbon intensity. Grey hydrogen, which currently accounts for more than 95% of global hydrogen production, is derived from fossil fuels via steam methane reforming and is associated with significant CO₂ emissions. Blue hydrogen incorporates carbon capture, utilization, and storage (CCUS), reducing but not eliminating emissions while raising concerns related to methane leakage and long-term storage integrity [4]. In contrast, green hydrogen is produced via water electrolysis powered entirely by renewable energy sources, ensuring minimal greenhouse gas emissions over its lifecycle.
2. Electrolysis technologies
Water electrolysis constitutes the technological backbone of green hydrogen production. Three main electrolysis technologies are currently relevant. Alkaline electrolysis is the most mature and widely deployed, benefiting from relatively low capital costs and long operational lifetimes. Proton exchange membrane (PEM) electrolysis offers higher current densities and greater operational flexibility, making it well-suited for integration with variable renewable energy sources, albeit at higher costs due to the use of precious metal catalysts. Solid oxide electrolysis cells (SOECs), operating at high temperatures, promise superior efficiency but remain at the demonstration stage [5].
Figure 1. Green hydrogen production via renewable-powered electrolysis.
Schematic representation of green hydrogen production through water electrolysis supplied by renewable electricity (solar and wind). The system illustrates electricity generation, electrolysis, hydrogen (H₂) production, oxygen (O₂) co-production, and downstream valorization pathways including storage and Power-to-X conversion.
Source: Adapted from IEA [1] and IRENA [3].
3. The water–energy nexus
While green hydrogen is often portrayed as a clean energy solution, its dependence on water resources introduces critical sustainability considerations. Electrolysis requires high-purity water, typically obtained through desalination or advanced water treatment processes. In water-scarce regions such as the MENA region, integrating hydrogen production with seawater desalination and wastewater reuse is essential to avoid exacerbating water stress [6]. The water–energy nexus therefore becomes a central dimension of green hydrogen strategies.
Global Green Hydrogen Market Dynamics
1. Demand outlook
Global interest in green hydrogen has intensified rapidly, supported by ambitious climate policies and industrial decarbonization targets. According to the International Energy Agency, global hydrogen demand could exceed 500 million tonnes per year by 2050, compared to approximately 95 million tonnes today [1]. While early demand growth is expected in refining and ammonia production, long-term expansion will be driven by steelmaking, synthetic fuels, maritime transport, aviation, and seasonal energy storage.
2. Cost trajectories and competitiveness
The economic viability of green hydrogen is strongly influenced by the cost of renewable electricity, electrolyzer capital expenditures, and financing conditions. Recent studies indicate that the levelized cost of hydrogen (LCOH) could decline by 30–70% by 2040, particularly in regions with abundant low-cost solar and wind resources [7]. This trend is reshaping global energy trade prospects, with renewable-rich regions emerging as potential exporters of hydrogen and hydrogen-derived products.
3. Geopolitical implications
The rise of green hydrogen introduces a new dimension to global energy geopolitics. Traditional fossil fuel exporters are increasingly seeking to reposition themselves as suppliers of low-carbon energy carriers, while importing regions aim to diversify energy sources and reduce exposure to volatile fossil fuel markets [8]. Cross-border hydrogen corridors and long-term off-take agreements are becoming central elements of emerging energy diplomacy.
The MENA Region as an Emerging Green Hydrogen Hub
1. Structural advantages
The Middle East and North Africa region is widely regarded as one of the most promising global hubs for green hydrogen production. This positioning is driven by exceptional renewable energy resources, particularly solar and wind, combined with vast land availability and strategic geographic proximity to European markets. Average solar irradiation levels in large parts of the region exceed 2,000 kWh/m²/year, enabling high-capacity-factor renewable systems [9].
2. National strategies
Several MENA countries have adopted national hydrogen strategies as part of broader energy transition and economic diversification agendas. Saudi Arabia, Egypt, Morocco, Oman, and the United Arab Emirates have launched large-scale projects targeting green hydrogen and ammonia exports, reflecting a regional shift toward low-carbon energy leadership [11].
Algeria’s Green Hydrogen Strategy
1. Renewable energy potential
Algeria possesses one of the largest renewable energy potentials in the Mediterranean basin. Vast Saharan regions exhibit solar irradiation levels exceeding 2,200 kWh/m²/year, complemented by favorable wind conditions in selected areas [13]. These resources provide the foundation for producing renewable electricity at very low costs, a critical determinant of green hydrogen competitiveness.
2. Water and desalination integration
Water availability represents a critical constraint in arid environments. Algeria’s strategy emphasizes integrating hydrogen production with seawater desalination and wastewater reuse. The expansion of desalination capacity along the Algerian coast provides a scalable source of high-purity water for electrolysis while minimizing pressure on freshwater resources [6].
3. Industrial legacy and infrastructure
Algeria’s long-standing experience in natural gas production, hydrogen handling, and pipeline infrastructure constitutes a strategic asset for hydrogen development. Existing energy partnerships with Europe offer a strong foundation for future hydrogen export agreements [16].
4. Euro-Mediterranean hydrogen corridors
Projects such as the SoutH2 Corridor aim to connect North African hydrogen production with European demand centers, aligning with the European Union’s REPowerEU strategy [17].
Figure 2. Algeria’s strategic positioning in the MENA–Europe green hydrogen value chain.Conceptual illustration highlighting Algeria’s renewable resource base, desalination–hydrogen integration, existing gas infrastructure, and emerging hydrogen corridors linking North Africa to Europe.
Source: Adapted from European Commission [17] and IRENA [9].
Power-to-X Pathways and Decarbonization Potential
The economic viability of green hydrogen is closely linked to downstream valorization through Power-to-X pathways. Green ammonia, e-methanol, and synthetic fuels enable large-scale storage, transport, and decarbonization of hard-to-abate sectors such as aviation and maritime transport [18,19].
Challenges and Risks
Despite its strong potential, green hydrogen deployment faces several challenges, including high upfront capital costs, financing constraints, infrastructure adaptation, safety concerns, technology transfer, and market uncertainty. Addressing these barriers requires coherent regulatory frameworks, public–private partnerships, and long-term off-take agreements [20].
Policy Implications and Strategic Recommendations
To fully realize its green hydrogen potential, Algeria should accelerate renewable deployment, strengthen integrated water–energy planning, and deepen international cooperation. Aligning national strategies with European decarbonization objectives and investing in human capital will be critical for long-term success [21].
Conclusion
Green hydrogen represents a strategic opportunity for reshaping global energy systems and achieving deep decarbonization. For Algeria, it offers a pathway to diversify the energy economy, maintain geopolitical relevance, and contribute to regional and global climate objectives. By leveraging its renewable resources, industrial expertise, and strategic location, Algeria can emerge as a key actor in the evolving Euro-Mediterranean green hydrogen landscape.
References
[1] International Energy Agency (IEA). Global Hydrogen Review. Paris: IEA; 2023.
[2] Hydrogen Council. Hydrogen Insights 2024. Brussels; 2024.
[3] International Renewable Energy Agency (IRENA). Green Hydrogen: A Guide to Policy Making. Abu Dhabi; 2023.
[4] Sadik-Zada ER. Blue versus green hydrogen. Energy Policy. 2023.
[5] International Journal of Hydrogen Energy. Electrolysis technologies review. 2024.
[6] IEA. The Water–Energy Nexus in Hydrogen Production. 2023.
[7] Chahtou A et al. LCOH in MENA countries. IJHE. 2024.
[8] World Energy Council. Hydrogen and Energy Geopolitics. 2024.
[9] IRENA. Hydrogen in the MENA Region. 2024.
[10] European Commission. Hydrogen Infrastructure and Corridors. 2023.
[11] Nature Energy. Hydrogen and global transition. 2023.
[12] OECD. Hydrogen Policy Frameworks. 2023.
[13] Global Solar Atlas. World Bank / IRENA; 2023.
[14] Sonatrach. Hydrogen Outlook. 2024.
[15] Algerian Ministry of Water Resources. Desalination Program Report. 2023.
[16] European Commission. REPowerEU Hydrogen Strategy. 2023.
[17] International Fertilizer Association. Green Ammonia Outlook. 2024.
[18] Energy Conversion and Management. E-fuels for aviation. 2023.
[19] World Bank. Financing Green Hydrogen. 2024.
[20] IRENA. Cost Reduction Pathways. 2023.
[21] International Journal of Hydrogen Energy. Power-to-X systems. 2024.
