Algeria is moving forward with its plan to strengthen its position in European and Euro-Mediterranean energy markets through the South H2 Corridor project. This strategic initiative aims to transport green hydrogen produced in Algeria through Tunisia and the Mediterranean Sea to Italy, Austria, and Germany. The project has garnered significant interest from major European companies.
The project was a key topic of discussion during a ministerial meeting held in Algiers, which resulted in the signing of the Algiers Ministerial Declaration. This declaration highlights the project's strategic importance as a catalyst for regional and Euro-Mediterranean integration in the field of green energy. The meeting was attended by representatives from the countries involved.
The South H2 Corridor project plans to transport 4 million tons of green hydrogen from Algeria to three European countries annually. This represents about 10% of the expected European demand for clean fuel by 2040. The project utilizes existing natural gas pipelines, which will be updated and adapted for this purpose.
The project's development began in October 2024, when Algeria's Sonatrach and Sonelgaz signed a memorandum of understanding with German and Italian companies to conduct feasibility studies. Since then, cooperation on the project has intensified, with Sonatrach signing another memorandum of understanding with a German company in June 2026.
Algeria's President, Abdelmadjid Tebboune, visited Germany in July, resulting in the signing of agreements between Sonatrach and German companies, including Robert Bosch and Siemens Energy. These agreements focus on cooperation in the energy transition, including the production of electrolyzers and green hydrogen.
A recent international study published in the Applied Energy journal highlighted Algeria's significant potential for green hydrogen production. The study cited Algeria's substantial solar resources, large exploitable areas, and existing energy infrastructure as key advantages. The study concluded that Algeria can become a major player in the global green hydrogen economy.
Algeria's competitive production costs for green hydrogen, ranging from $1.2 to $2 per kilogram, compared to $5-6 in Europe, make it an attractive partner for European countries. To achieve its goals, Algeria is finalizing the legal and institutional framework for hydrogen activities to attract more investment.
Key points
- The South H2 Corridor project aims to export 4 million tons of green hydrogen to Europe annually.
- Algeria has the potential to produce and export around 10 million tons of green hydrogen annually.
- The project's development is expected to enhance Algeria's position in the European energy market.
