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Thursday, 2 June 2022

SCZone signs initial agreement with H2 Industries for waste-to-hydrogen plant

A step closer to our first waste-to-hydrogen plant? The Suez Canal Economic Zone (SCZone) has signed an MoU with H2 Industries to establish Egypt’s first waste-to-hydrogen plant in East Port Said, according to a statement. The plant will cost USD 4 bn to establish, the statement said, without disclosing how it will be financed. A senior company official told us prior to the announcement that the company is in talks for financing, but provided no further detail. H2 Industries will first work on feasibility studies for the project before signing final contracts during COP27 in November in Sharm El Sheikh.

The announcement brings to USD 14 bn the total value of preliminary agreements that international companies have signed with SCZone to produce green hydrogen and green ammonium. We’ll be looking in the months ahead to see how many of these translate into final contracts at (or in time for) COP27 late this fall.

The company will use local “organic waste, including plastic waste” as a feedstock, the statement said. The waste will be “secured at the Mediterranean entrance to the [Suez] canal,” an earlier statement from the company read, without providing further detail.

How does it work? H2-Industries hasn’t disclosed the exact chemistry behind its waste-to-hydrogen technology, describing it as a thermo-chemical process that doesn’t burn waste. H2’s Egypt plant will produce hydrogen and captured CO2.

Background: New York-headquartered energy firm H2-Industries said in February it plans to establish Egypt’s first waste-to-hydrogen plant in East Port Said. The facility is set to produce 300k tons of hydrogen each year, consuming 4 mn tons of municipal solid waste.

Egypt has plans to become a green hydrogen hub: The government is making moves to capitalize on investment momentum ahead of COP27 by establishing the SCZone as a regional green energy hub. Prior to the H2 Industries announcement, major global companies have inked USD 10 bn worth of preliminary agreements for green ammonia and hydrogen projects in Ain Sokhna in the past three months alone — and we’re expecting more where that came from.

Want more on green hydrogen? For the current state of play on our green hydrogen ambitions, check out this week’s Going Green, our weekly deep dive on all things green economy. And stay tuned for next week’s edition to find out more on why Egypt is a particularly appealing location for green hydrogen production, and where the bottlenecks are in getting projects off the ground.

No clue what we’re talking about? Go back to basics with our recent explainer on green hydrogen.

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