- Egypt, Morocco and Oman are well positioned to develop green fertiliser industries by combining strong renewable energy resources with existing ammonia and fertiliser production assets.
- Green hydrogen could significantly reduce emissions from fertiliser production, while helping countries strengthen food and energy security and develop new industrial value chains.
- Export markets, concessional finance, credible certification and mechanisms such as H2Global will be critical to getting green fertiliser projects to final investment decision.
Green fertiliser production is emerging as a potential driver of industrial decarbonisation in the Middle East and North Africa, with Egypt and Morocco among the countries best positioned to develop new production capacity using renewable energy and green hydrogen.
A new brief from the Green Hydrogen Organisation examines the potential for green fertilisers to reduce emissions from food production while strengthening industrial value chains across the region. It identifies Egypt, Morocco and Oman as early movers because of their strong solar and wind resources, existing ammonia and fertiliser facilities and access to major European, African and Asian markets.
The report argues that existing industrial infrastructure provides an opportunity to retrofit facilities rather than develop entirely new production systems. This could reduce project risk while creating a platform for wider green industrial development.
The case for decarbonising fertiliser production is significant. Fertilisers were responsible for about 1.231 Gt of CO2 equivalent emissions in 2022, representing approximately 2.4% of global emissions. Around 80% to 85% of production related emissions are concentrated in ammonia synthesis, making green hydrogen a major opportunity to reduce emissions across the fertiliser value chain.
Image credit: Green Hydrogen Organisation – GH2
Fossil gas can account for as much as 90% of ammonia production costs, while more than 95% of fertiliser ammonia is produced using fossil feedstocks. This leaves fertiliser producers exposed to fluctuations in gas prices, geopolitical disruption and carbon costs.
The report notes that domestic markets are unlikely to support a significant green premium because fertiliser prices are closely linked to food security and political considerations. Export markets are therefore expected to play a central role in the early development of green fertiliser projects.
European carbon regulation, including the Carbon Border Adjustment Mechanism, together with demand side mechanisms such as H2Global, could help create the conditions needed to support investment in lower emissions fertiliser production.
The report also highlights the importance of credible certification. Many projects described as green continue to rely partly on fossil based ammonia, creating a risk of greenwashing and potentially limiting access to premium international markets.
Financing remains one of the major barriers. High capital costs, fragmented concessional finance and relatively short fertiliser contracting periods can make it difficult for developers to secure the long term commitments required for major infrastructure investment.
The report recommends coordinated blended finance and demand aggregation to help projects reach final investment decision and establish bankable long term offtake arrangements.
Recent disruptions to gas markets and international shipping routes have also highlighted the vulnerability of fossil dependent fertiliser supply chains. Disruptions around the Strait of Hormuz and Red Sea have increased the importance of alternative production locations and export routes.
Mediterranean facing infrastructure, including Egypt’s Suez Canal Economic Zone and Morocco’s Atlantic ports, could therefore provide strategic platforms for green fertiliser exports while supporting broader industrial development.
The potential was highlighted during a recent visit by Kenya’s Special Envoy for Climate Change, H.E. Ambassador Ali Mohamed, and his delegation to Egypt’s Suez Canal Economic Zone.
Facilitated by the Green Hydrogen Organisation through the Africa Green Hydrogen Alliance, the delegation visited the Sokhna industrial area, including a fertiliser facility and the port, to examine Egypt’s experience and explore opportunities for greater cooperation between Kenya and Egypt in green manufacturing, renewable energy and green fuels.
The Suez Canal Economic Zone highlighted its efforts to develop local value chains for solar and wind technologies while supporting green fuel production. These initiatives include green hydrogen and green ammonia projects within the economic zone.
One green ammonia project has secured a supply agreement through the H2Global auction mechanism, supported by approximately €397 million in financing.
The cooperation between Egypt and Kenya demonstrates how African countries can use renewable energy resources to develop new industrial capacity rather than focusing solely on electricity generation and fuel exports.
For Egypt, Morocco and other countries with strong renewable resources and established industrial infrastructure, green fertilisers could become an important component of wider green industrialisation strategies.
The report concludes that green fertilisers should be treated as strategic industrial infrastructure rather than solely as an agricultural issue. Retrofitting existing fertiliser plants could provide one of the fastest and lower risk routes to green industrial development in MENA, provided projects are supported by concessional finance, credible certification and coordinated demand mechanisms.
Link to the full report HERE
Author: Bryan Groenendaal
