The Neom Green Hydrogen Project in Saudi Arabia, with its 2.2 GW electrolyser capacity, is currently the largest and best-known project in the MENA region. On the podcast The Hydrogen Elevator, recorded at The Smarter E Europe exhibition in Munich and hosted by Jürgen Pfeiffer, Cornelius Matthes said the project is now 95% complete and is “due to be commissioned in the next few quarters.”
It could supply low-cost hydrogen and be a step towards greater energy security for Europe, Matthes pointed out. He noted that most hydrogen projects in the MENA region are located on the Red Sea – like Neom – or in North Africa, meaning they do not depend on passage through the Strait of Hormuz. Matthes argued that, at large scale, cost was no longer the main issue. “We can go below three euros per kilogram today,” he said.
MENA developers losing patience with Europe Matthes sees the main obstacle in Europe’s regulatory framework. According to him, prospective producers in the MENA region are “extremely annoyed, extremely frustrated by a lack of speed, a lack of clarity” on Europe’s part. Without reliable long-term offtake commitments, investors are increasingly looking towards Asia, where projects move faster and regulatory frameworks are more predictable. Referring to offtake agreements, he said: “Ten years is not so good. Twenty years is super. If you have 30 years, it’s even much better.” He added: “A solid offtake, a solid long-term agreement is simply a prerequisite to make any of these projects bankable.” He also called for competitive export credit agency (ECA) support to facilitate the delivery of European technology to the region.
A milestone in comparing apples with apples Laurent Antony, Executive Director of the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE), also stressed the importance of regulation. IPHE develops international foundations for the hydrogen economy on which governments and standards organisations can build. The field is complex. The organisation has identified 21 hydrogen certification schemes and seven support mechanisms worldwide. Antony considers a single global certification scheme unrealistic. “That’s just a dream,” he said.
But he pointed out that a milestone had been achieved. At the end of April, a new ISO standard for quantifying greenhouse gas emissions from hydrogen was published. The methodology is based on work initiated by IPHE, involving more than 15 countries and over 70 meetings. The new standard provides a common methodology “to compare apples with apples.”
Like Matthes, Antony called for long-term, stable, and predictable rules and pointed to an example that has already proven successful. He cited Japan’s Hydrogen Society Promotion Act. The legislation combines 15-year contracts for difference (CfDs) with a further ten years of planning certainty and covers the entire supply chain, from producers to logistics providers.
Virtual certificates are controversial The two experts disagreed strongly over certificate trading. Matthes argued in favour of virtual trading of green hydrogen. This would essentially mean trading certificates without transporting the physical hydrogen.
Antony rejected a pure book-and-claim model, at least for now. Before virtual trading can become credible, he argued, the industry must establish trust through physical traceability using a mass-balance approach that links the hydrogen produced with the hydrogen ultimately consumed.
To secure long-term international hydrogen partnerships, Matthes called for more “simplicity” and “a bold commitment by Europe.” Antony argued that Europe should regard exporting countries as co-owners rather than merely suppliers. “Let’s understand each other and work together,” he concluded.
