In regard to the electricity grid, the concept of a dedicated ‘Green Energy Corridor’ for hydrogen projects has been proposed as a way to meet the ‘additionality’ and temporal and geographical consistency requirements under European standards. However, while this model may provide investors with greater regulatory certainty, it carries the risk of establishing isolated networks devoted to serving exports, without regard to the national system and local demand needs. This division could undermine efforts to reduce the overall system-level carbon footprint and could increase the national grid’s reliance on fossil fuels, particularly if the most productive renewable sites are depleted to serve export corridors, instead of enhancing domestic electricity supply.
Egypt’s energy policies are clearly influenced by European market conditions. Pursuing alignment with European green certification requirements, ‘additionality’ regulations, and monitoring, reporting, and verification (MRV) systems, Egypt is in the process of adopting an energy sector model in which wind and solar sites are directly connected to electrolysis units in Egypt’s Free Economic Zones with preferential contracts and tariffs. As indicated in the preceding paragraph, this institutional arrangement leads to the creation of energy ‘enclaves’ or ‘oases’, i.e. projects that are tailored to meeting European compliance standards and minimising investment risks but are only very weakly integrated into the national energy system. This pattern will remain in place unless operational and legal frameworks are introduced to ensure grid connectivity and the allocation of defined local consumption quotas for industrial use and for the national electricity system.
In terms of the applications of hydrogen in Egypt, it can be stated that it offers a complement to direct electrification, rather than being a substitute for it.
For this reason, its use should be prioritised in sectors that are hard to electrify, such as maritime shipping and fertiliser production. Hydrogen has high potential as a fuel for maritime transport, and this is the most commercially viable short-term use case for Egyptian hydrogen, given Egypt’s strategic location along the Suez Canal corridor. By contrast, blue hydrogen pathways are less compatible with Egypt’s context due to the country’s limited natural gas resources and the high cost of carbon capture and storage. It is thus recommended to adopt a transitional approach which entails blending limited amounts of hydrogen into natural gas networks and enabling conventional power plants to operate on hydrogen when feasible, in order to create local demand and absorb early production.
Turning to the issues of sustainability, equity, and benefit-sharing, the current prioritisation of an export-oriented approach to hydrogen risks reproducing existing imbalances in the distribution of land and water resources, and could exacerbate the risk of environmental degradation, unless binding mechanisms to ensure local value-sharing are established. Better still, priorities should be reoriented: moving from an export-led model towards one centred on domestic transformation.
Also linked to sustainability and equity concerns is the fact that the export-oriented hydrogen model currentlybeing pursued will direct the output of Egypt’s most productive wind and solar sites towards export routes. This will intensify competition over high-quality land and diminish the overall carbon reduction impact if the national grid continues to rely on fossil fuels to meet domestic demand. Against this backdrop, sustainability assessments relating to the country’s hydrogen strategy should extend beyond individual projects and account for cumulative national impacts. It is also necessary to ensure transparency and public access to data on emissions, water, and land use – which are key conditions for social acceptance and the long-term continuity of investments.
Based on the study’s analysis, it is recommended to adopt an approach that ensures complementarity between the local energy production and exporting systems , rather than isolating them at the local level. This requires a clear sequencing of priorities, beginning with electrification and increasing energy efficiency in order to reduce reliance on gas, alongside the accelerated strengthening of the national grid – which should be treated as shared infrastructure that should not face competition from isolated parallel systems – so that exports can serve as a supportive element within a broader domestic energy transition, rather than creating additional competition for resources.
Furthermore, there is a need for a more comprehensive vision of Egypt’s energy transition: one that is grounded in the principles of climate justice. This includes negotiating compliance rules, financing arrangements, and green certification standards with European partners to ensure equitable burden-sharing and commitments that are aligned with the capacity of the local economy. A further ambition should be to build mutual understanding and practical coordination among North African countries on these issues, with the aim of enhancing their collective negotiation power, harmonising green compliance standards within a regional framework, preventing a race to the bottom in offering incentives, and opening shared pathways for infrastructure, manufacturing, and value-chain development in hydrogen and its derivatives.
