Morocco is working on a plan to use green hydrogen in its steel, fertilizer and cement industries. The plan could require about $6.5bn in investment.
Two studies by the United Nations Industrial Development Organization (UNIDO) looked at the technology, water needs and financing needed for these projects.
Steel is one of the main areas being studied. Green hydrogen can be used to make direct reduced iron (DRI), which can then be used to produce steel with fewer carbon emissions.
The European Union’s Carbon Border Adjustment Mechanism is also adding pressure on industrial companies to cut emissions. The system affects steel and cement sold to the European market.
Steel project could cost $2.47bn
The steel industry produces about 480,000 tonnes a year. Most plants use electric arc furnaces that melt scrap metal.
Scrap metal is already a lower-carbon option than the coal-based blast furnaces used in much of the global steel industry. But access to enough scrap could become a problem as demand grows.
UNIDO looked at Casablanca, Nador and Jorf Lasfar as possible locations for a new hydrogen-based steel project.
Jorf Lasfar was chosen as the preferred site because it has a port, electricity connections, land and access to seawater desalination.
The proposed project would produce 800,000 tonnes of DRI each year.
It would need:
- A 246MW electrolyser
- 638MW of wind power
- 513MW of solar power
- About $2.47bn in investment
A mix of 50% scrap metal and 50% hydrogen-based DRI could lower steel’s carbon intensity from about 387kg of CO₂ equivalent per tonne to 315kg.
A plant using only hydrogen-based DRI could cut emissions further.
Water is another challenge
Green hydrogen production needs large amounts of water.
The plan includes desalination to avoid putting more pressure on conventional water supplies.
A basic desalination plant producing 2,000 cubic metres of water a day would cost about $6.5m.
A larger plant producing 10,000 cubic metres a day would cost about $32.7m and could also supply other industrial users.
Fertilizers are the closest opportunity
Fertilizer production is the most advanced area for green hydrogen, according to UNIDO.
OCP plans to replace fossil-fuel-based ammonia with green ammonia between 2030 and 2040. The company is investing in renewable energy and desalination to support the plan.
A green hydrogen platform is also being developed at Jorf Lasfar. It has received a €30m grant from German development bank KfW and is expected to initially produce 100,000 tonnes of green ammonia a year.
Cement has more limited potential.
Green hydrogen could provide up to 20% of the high-temperature heat needed to make cement. It could help reduce the use of coal and petroleum coke.
Where will the money come from?
UNIDO estimates that about $6.5bn will be needed to develop green hydrogen across industry.
Possible sources include green loans, guarantees, sustainable bonds and a planned national climate fund.
European funding could also play a role through the EU-Morocco Green Partnership. International institutions such as the Green Climate Fund, African Development Bank and World Bank Group are also possible sources.
Several rules and systems still need to be developed.
These include regulations for green hydrogen, certification, emissions tracking and better coordination between government and industry.
UNIDO has also recommended creating a national body for green hydrogen industrial projects.
The body would bring together government agencies, energy institutions, industrial companies and financial organisations.
More than 80 organisations and experts took part in the studies over the past two years.
