Why Is the Hydrogen Produced in Algeria More Competitive?

An Italian official at Snam, the company responsible for engineering the Southern Hydrogen Corridor (SoutH2 Corridor), revealed the expected costs of producing and transporting this clean energy source from Algeria and Tunisia to Germany, via Italy and Austria, which will be difficult to compete with.

These details were confirmed during the Italian-German Energy Forum held in the capital, Rome, a few days ago, during an intervention by the Executive Director of Decarbonization Unit Snam, Piero Ercoli, where it was pointed out that the pipeline from North Africa (Algeria and Tunisia) will enable the transportation of hydrogen that is produced at very competitive costs, especially towards consumer markets in Europe which are interested in this clean energy source.

The same official at Snam, according to what was reported by some Italian media such as the HydroNews website, stressed the importance of the pipeline that will connect Algeria and Tunisia with Europe (Italy, Austria and Germany), to enhance the international hydrogen market, the production of which will be concentrated in world regions where conditions are very favourable.

Piero Ercoli asserted that among the regions of the world in which the conditions will be very favourable for the production of green hydrogen are Algeria and Tunisia in particular, which, according to him, will be a source of supply for the Southern Hydrogen Corridor, which is expected to producing this green energy source with costs worth 4 euros per kilogram.

He considered that according to this cost, the impact of transportation via the pipeline on this value would be increasingly lower, explaining that estimates of transporting green hydrogen from North Africa (Algeria and Tunisia) to Germany via this corridor will be about 0.5 euros per kilogram.

According to these data, the green hydrogen produced in Algeria and Tunisia, regardless of the quantities, will find a thriving market for its demand and consumption on the European continent, given its very competitive cost. Estimates prepared by the Italian company “Snam” indicate that the demand for green hydrogen between Austria and the southern German region of Bavaria will reach 19 TWh in 2030, and 53 TWh in 2040.

As is known, this project, known as the “Southern Hydrogen Corridor or SoutH2 Corridor,” was included last April by the European Commission in the sixth list of common interest projects (CIPs) that gained a status allowing facilitating access to financial resources for its realization.

The Italian Snam’s official also confirmed that the CIP financing program and European investment financing, so far, only relate to the European section of the new hydrogen gas pipeline.

“For this reason, through our joint project with Eni regarding the marine corridor (51% Eni and 49% Snam), we have already applied in December 2023 to enter into the hydrogen transport infrastructure in North Africa (Algeria and Tunisia),” he added referring to the part of the pipeline crossing Algeria and Tunisia.

He explained in this regard, “We will begin procedures, next December, to directly include Algeria and Tunisia, to request the inclusion of the Southern Hydrogen Corridor in the list of projects of mutual interest (PMI), which relate to energy infrastructure linking the European Union and countries outside it.”

The Snam’s official also spoke about hydrogen production to feed the pipeline and pointed in particular to the ambitious goals set by North African countries, especially Algeria and Tunisia.