In part two of our exploration into the transformative potential of the EU Green Deal on North Africa, we delve into specific opportunities for renewable energy and clean resources in the region. As Europe strives to achieve its ambitious climate objectives, North Africa could emerge as a pivotal partner in this transition, offering substantial prospects in key areas such as solar and wind power, bioenergy, green hydrogen, and natural gas as a transitional fuel. Crucially, the supply of Critical Raw Materials (CRMs) could provide the essential components for clean energy technologies. Harnessing these resources responsibly and sustainably can stimulate economic growth in North Africa, while helping Europe diversify its energy supply and meet its decarbonisation targets.
Let’s take a closer look at these opportunities and explore the ways the EU and North Africa can collaborate to leverage the vast potential that these resources hold.
Harnessing Solar and Wind Power
North Africa boasts impressive solar and wind power potential, arguably some of the greatest on the African continent. The region’s annual average solar irradiation is about 2,200 kilowatt-hours per square meter, while average wind speeds reach a robust 7 meters per second, and even 9.5 meters per second in Algeria, according to the International Renewable Energy Agency (IRENA). Given this immense potential, coupled with its proximity to the European market, North Africa could become Europe’s most crucial trading partner in renewable energy.
Opportunities in Biofuels
Cooperation on bioenergy, such as biofuels in transport, could also be a focal point, particularly with Egypt. The EU’s Renewable Energy Directive (RED) from 2021 made it legally binding to introduce new rules and targets to manage the risks posed by the biofuel market to cropland and carbon sinks such as forests and wetlands.
Green Hydrogen Potential
Green hydrogen, generated using renewable energy, is emerging as an important energy carrier with likely increased significance in the coming decades. Both Morocco and Egypt have already initiated ambitious plans for the production and export of green hydrogen.
Collaboration in Natural Gas and Critical Raw Materials (CRMs)
Natural gas, as a transitional fuel, could also be a crucial area for collaboration. North African countries, particularly Algeria, Egypt, and Libya, are significant producers of natural gas, and the existing infrastructure for transporting natural gas to Europe can be utilized to ease the energy transition.
Finally, North Africa’s abundance of Critical Raw Materials (CRMs) can fuel Europe’s clean energy technology. By encouraging responsible extraction and use of these resources, the EU can stimulate sustainable development and economic growth in North Africa while diversifying its own supply chains.
Now we’ll take a closer look at the existing natural gas pipeline network that could be repurposed to transport green hydrogen, the role of natural gas as a transition fuel, the geopolitical significance of critical raw materials (CRMs), and the financial frameworks needed to realize these green ambitions.
The Role of Existing Pipeline Networks
The existing natural gas pipeline network in Europe and North Africa, which comprises the Enrico Mattei (“Galsi”) pipeline, the Pedro Duran Farell (“Maghreb-Europe”) pipeline, the Medgaz pipeline, and the Greenstream pipeline, could be reconfigured in the future to transport green hydrogen across the Mediterranean. This offers a viable alternative to traditional gas exports and could help North African fossil fuel exporters transition towards green energy production.
Natural Gas as a Transition Fuel
The European Commission views natural gas as a transitional fuel that can aid in decarbonizing the EU economy. As part of the European Green Deal, there is an increasing push towards decarbonizing the gas sector, including support for ‘decarbonized gases’ and an overhaul of the gas market design. The inclusion of natural gas as a transitional fuel in the EU’s strategy could provide reassurance to North African nations concerned about the decline of fossil fuel demand.
Critical Raw Materials
Access to CRMs, which include substances like cobalt, lithium, phosphorus, and rare earth elements, are crucial for clean energy technologies. North Africa is home to several of these materials, including significant phosphate reserves in Morocco and smaller quantities of barytes and cobalt. However, the extraction of these materials can have significant environmental impacts and may involve political complexities, as seen in the Western Sahara dispute.
Finance
Realizing the potential of the European Green Deal for North Africa requires targeted financial investment. Existing financing tools and mechanisms such as Horizon Europe, along with the support of development finance institutions, can be pivotal in facilitating access to energy and promoting green energy technologies in the region. However, the implementation of these financing mechanisms requires improved coordination between different policy tools and a clear vision on part of the EU for their benefit to developing countries.
Recommendations for EU Green Deal:
- Mutual Due Diligence and Mapping the Problems and the Potential: The first step is to initiate a mutual process of due diligence that thoroughly maps areas of concern and interest for both the EU and North African governments. A dedicated institution may be needed to oversee this process and to ensure that policymaking is not influenced unduly by commercial interests.
- Establishing Meaningful Partnerships: Next, meaningful partnerships should be established to make the European Green Deal a credible policy mechanism. A two-way communication forum should be created for the EU and North African states to share information and monitor progress. This will require overcoming obstacles related to data transparency, public access to information, and free speech.
- Promoting STEM R&D, Jobs, and Capacity Building: The EU can help to stimulate job growth in North Africa by fostering technical cooperation, knowledge exchange, and research and development (R&D) in STEM fields. This could involve co-funded initiatives, student scholarships, research grants, and eased work and travel restrictions.
- Facilitating Trade and Adapting to the CBAM: The EU could also assist North African companies in adapting to the Carbon Border Adjustment Mechanism (CBAM), particularly small and medium-sized enterprises. This might involve financial support for improving energy efficiency and alignment with European Green Deal regulations.
- Regulating the Market: There are several areas where policy support could help to achieve the energy transition, such as phasing out fossil fuels, ending fossil fuel subsidies, reforming the electricity sector, and capacity-building in national and local bodies.
- Building Trust Through Genuine Partnerships: Trust will be a critical factor for the success of these collaborations. This will require genuine partnerships that meet the needs of North African countries and deliver the support they request.
- Environmental Protection and Enhancement: The European Green Deal could help to address the environmental impacts from North Africa’s fossil fuel production. The EU could provide financial support and impose formal requirements to reduce methane emissions and other environmental impacts.
- A Rights-Based Approach to Investment: Europeans must ensure that clean tech investments are sustainable, environmentally responsible, and beneficial to local people. This means setting high social and environmental standards for all energy and infrastructure-related projects and protecting communities from land grabs. The EU must also push for transparency in all its engagements.
- Addressing the Western Sahara Issue: The Western Sahara issue will be a significant challenge due to the legal and political controversies surrounding Morocco’s sovereignty over the territory. This issue needs careful consideration as it could impact the feasibility of certain projects and trade arrangements.
The implementation of these recommendations could help the EU and North Africa to realise their shared economic, environmental, and political objectives. However, success will require significant collaboration, transparency, and the building of genuine partnerships that cater to the needs and concerns of all parties involved.
Feel free to contact the Energy Transition Centre today with questions.
· Julius Moerder, Head of Energy Transition Centre julius.moerder@centurionlg.com
· Oneyka Ojogbo, Head of Energy Transition Centre, Nigeria & West Africa oneyka.ojogbo@centurionlg.com
· Leon van Der Merwe, Head of Energy Transition Centre, South Africa leon.vdmerwe@centurionlg.com
Author: Memoona Tawfiq
