Algeria is poised to strengthen its position in the European and Euro-Mediterranean energy markets with the South H2 Corridor project, a strategic initiative aimed at transporting green hydrogen produced in Algeria to Italy, Austria, and Germany. The project, which involves several European companies, seeks to leverage Algeria's renewable energy resources and existing gas infrastructure. The pipeline project was discussed at a ministerial meeting in Algiers, where parties signed the Algiers Ministerial Declaration, highlighting the project's importance for regional integration and cooperation in the green energy sector.
The South H2 Corridor project aims to transport 4 million tons of green hydrogen annually to European countries, equivalent to 10% of the expected European demand for clean fuel by 2040. The project involves updating and adapting existing natural gas pipelines for hydrogen transport. Algeria's national oil company, Sonatrach, and gas company, Sonelgaz, signed a memorandum of understanding with European companies in October 2024 to conduct feasibility studies for the project. Since then, cooperation has intensified, with Sonatrach signing another memorandum with German company, VNG, in June 2026.
Algeria's green hydrogen is considered among the most competitive globally, according to an international study published in the Applied Energy journal. The study highlighted Algeria's vast solar resources, large exploitable areas, and existing energy infrastructure, which enable the country to produce and export around 10 million tons of green hydrogen annually. This aligns with the European Union's goal to import renewable hydrogen by 2030. Algeria's production costs, ranging from $1.2 to $2 per kilogram, are significantly lower than Europe's $5-6 per kilogram.
The project's development is part of Algeria's efforts to enhance its role in the global clean energy economy. The country's National Strategy for Green Hydrogen Development aims to attract investments in various stages of the value chain. Algeria's energy sector has garnered significant interest from European companies, with Germany emphasizing the country's importance as a reliable energy partner. The South H2 Corridor project has sparked cooperation between Algerian and European companies, including VNG, Snam, and Verbund Green Hydrogen.
The project's implementation is expected to commence in October 2024, with the signing of agreements between Sonatrach, Sonelgaz, and European companies. The initiative is seen as a crucial step towards establishing Algeria as a major player in the global green hydrogen market. The country's favorable conditions for green hydrogen production, including its renewable energy resources and existing infrastructure, make it an attractive partner for European countries seeking to reduce their carbon footprint.
The South H2 Corridor project has the potential to contribute significantly to the European Union's renewable energy goals. The project's success will depend on the cooperation between Algerian and European companies, as well as the development of a supportive regulatory framework. Algeria's commitment to green hydrogen production and export is expected to have a positive impact on the country's economy and energy sector.
As the project moves forward, Algeria is expected to play a key role in the European clean energy market. The country's green hydrogen production is anticipated to be competitive, with costs significantly lower than those in Europe. With the implementation of the South H2 Corridor project, Algeria is poised to become a major player in the global green energy economy.
Key points
- Algeria plans to export 4 million tons of green hydrogen to Europe annually through the South H2 Corridor pipeline project.
- The project's production costs, ranging from $1.2 to $2 per kilogram, are significantly lower than Europe's $5-6 per kilogram.
- Algeria's green hydrogen production is expected to contribute significantly to the European Union's renewable energy goals.
