The EU plans to rely more on Algerian gas and green hydrogen as it continues to wean off its dependence on Russia fossil fuels, the bloc’s energy commissioner Dan Jørgensen said on Thursday (12 February).
Following meetings with Algeria’s mining and energy ministers Mohamed Arkab and Mourad Adjal, Jørgensen told reporters in Algiers that the EU had a “very big interest” in Algeria’s gas supply, and that the North African country had “huge potential for renewables”.
“It is clear that we will need more hydrogen,” he added.
The talks were part of an annual EU-Algeria High Level Energy Dialogue that has gained importance since Russia’s full invasion of Ukraine prompted the EU to end its purchase of Russian gas.
Algeria’s natural gas accounts for about 20 percent of it budget revenues and 40 percent of export earnings. According to fossil fuels major BP, the country owns the 1oth-largest proved natural gas reserves in the world.
At the heart of EU-Algeria energy relations is the Southern Gas Corridor: a major EU natural gas supply diversification project, which is expected to deliver only 10 bcm/y to the EU by 2020.
Work is also underway on renewable energy and electricity transmission schemes worth up to €400m, as well on Eni’s Algeria-Tunisia gas pipeline that would also serve the EU.
While Spain and Portugal would be the main customers for Algerian gas, Germany is the main EU investor in green hydrogen.
That includes the TaqatHy+ programme, co-financed by the EU and Germany to the tune of €15m and €13m respectively, which aims to support the development of renewable energy projects, the integration of renewable energy into electricity grids, and the development of a green hydrogen economy.
“Algeria is a strategic and reliable partner for the EU’s natural gas supply,” said the commission in a statement on Thursday.
US oil majors have also been engaged in several years of on-off talks with Algiers to pump new investment into its fossil fuels, backed in recent months by president Donald Trump’s enthusiasm for financing new oil and gas projects.
Weaker EU-Algeria ties
But despite Europe’s dash for gas, political relations between the EU and Algeria are weaker than with other governments in North Africa.
Unlike the rest of the region, president Abdelmadjid Tebboune’s government does not have a ‘cash for migrant control’ agreement with Brussels.
The EU Commission also raised an arbitration case last July against what it describes as Algeria’s protectionism in many sectors of its economy.
Though the EU and Algeria signed an Association Agreement in 2002 offering reciprocal free trade in goods, the total value of EU exports to Algeria has fallen steadily by 31 percent between 2014 to 2024.
Algeria is also the main backer of the Polisario Front, the independence movement in Western Sahara.
At the end of January, EU foreign ministers formally backed a proposal by Algeria’s neighbour and rival, Morocco, that would give Western Sahara autonomy but under the sovereignty of Morocco.
