A new study led by the Technical University of Munich has found that the production of green hydrogen in Africa for export to Europe is likely to be significantly more expensive than previously assumed. The research, which examined around 10,000 potential sites in Africa, suggests that only two percent of them could become competitive by 2030 and even then, only with price and off-take guarantees from European governments.
Previous models had often estimated the costs of production facilities in African countries without considering socio-political risks, such as transportation options and legal certainty. At current interest rates, the price of a kilogram of hydrogen without guarantees would be around five euros, while with guarantees, it would be around three euros, the study found. For comparison, prices at an auction by the European Hydrogen Bank in 2024 were sometimes below three euros.
Around 200 sites in Algeria, Kenya, Mauritania, Morocco, Namibia and the Sudan have the potential to become competitive, the researchers said. They emphasized the need for stable agreements to enable a long-term industrial and development policy in Africa.
“It’s also a question of fairness” said Stephanie Hirmer, a professor of Climate Compatible Growth at the University of Oxford. “If the current hype is not underpinned by sensible political measures, we risk projects that, in the end, are neither cost-effective nor create value for the local population.