Paris: The International Energy Agency (IEA) has released its "Global Hydrogen Review 2025," casting doubt on the feasibility of establishing a large-scale green hydrogen industry in Africa by 2030. The report highlights significant challenges, including insufficient funding, slow renewable energy integration, and export dependency, which hinder the realization of ambitious green hydrogen projects across the continent.
According to the IEA, if all proposed projects were to materialize, Africa, Latin America, and Southeast Asia could collectively produce over 9 million tons per year of low-carbon hydrogen by 2030, accounting for approximately a quarter of global production. However, less than 0.5% of these projects have secured committed investments, compared to over 9% globally. Consequently, only about 5% of the announced projects in emerging economies are expected to be operational by 2030, with the majority likely to be delayed.
One of the primary obstacles identified is the sluggish integration of renewable energy sources. In 2024, the combined regions of Africa, Latin America, and Southeast Asia contributed only 6% of new global solar and wind capacity, a level deemed insufficient to support large-scale electrolytic hydrogen production. Additionally, nearly 80% of the announced projects in these regions are intended for export, nearly double the global average, making them reliant on still-limited international demand.
Financial challenges also pose significant barriers. Realizing all announced projects would require 420 GW of electrolysis capacity and more than \$1.5 trillion in investment, equivalent to the total global investment in new power generation capacity in 2024. However, the three regions have attracted less than 9% of this investment, with the cost of capital reaching as high as 15%, compared to 5% to 7% in advanced economies.
In light of these challenges, the IEA suggests that Africa is more likely to see the emergence of a few pilot and demonstration projects rather than a full-fledged green hydrogen industry by 2030. The focus over the next five years is expected to be on consolidating a local sector capable of laying the groundwork for large-scale projects in the future.
The IEA's assessment underscores the need for strategic planning, substantial investment, and international collaboration to overcome the current hurdles and realize the potential of green hydrogen in Africa.