Mapping the true costs of African green hydrogen exports to Europe

Africa’s vast renewable energy potential has sparked global interest in exporting green hydrogen to Europe. However, research by a multi-institution team including Prof. Stephanie Hirmer, Associate Professor in Climate Compatible Growth at the Energy and Power Group, highlight economic and ethical concerns. Their study, published in Nature Energy, finds that high financing costs make most African green hydrogen projects economically unfeasible without substantial European support. Along with the University of Oxford, the team included researchers from the Technical University of Munich, and ETH Zurich.

Producing green hydrogen in Africa without strong European policy support is too expensive - costing between €4.2 and €4.9 per kilogram. However, if Europe guarantees to buy the hydrogen (a strategy known as de-risking), costs could drop enough to make projects in six African countries potentially competitive. Still, many of these locations face political or security challenges. In the best-case scenario, green hydrogen could be produced for as low as €3.2/kg in Mauritania by 2030.

Ultimately without de-risking and careful site selection, Africa’s green hydrogen won’t be globally competitive. Drawing on insights gathered at COP27 and a novel open-source model, the research carried out by the universities of Oxford, TU Munich and ETH Zurich, offers cost estimates for 10,300 locations across 31 African countries. Despite promising renewable resources, only six countries - Algeria, Kenya, Mauritania, Morocco, Namibia, and Sudan - could reach cost competitiveness by 2030, and only with guaranteed European offtake agreements to de-risk investments.

“Green hydrogen presents a double-edged sword for African countries. On one hand, there is a real risk of repeating extractive models where resources are developed solely for export without benefiting local populations. But with the right frameworks, these technologies can drive inclusive growth. Given the scale required for feasibility, exports are essential - but they must be paired with policies that ensure local value creation, infrastructure investment, and alignment with national development goals’’ says Prof Hirmer. 

The findings warn that many current projects cost estimates rely on overly optimistic assumptions. Realistic financing rates - up to 26.5% in some regions - reveal a stark economic gap between ambition and viability. Furthermore, many proposed mega-projects risk repeating historical patterns of extractive development if local benefits are not considered.

Lead author of the study, Prof Florian Egli from Technical University of Munich, says: “The current political hype around green hydrogen risks overlooking real challenges in addressing investment risk and creating value locally. Providing cost estimates that consider realistic investment conditions is a first step, however, the choice whether to move ahead with the planned mega projects should carefully consider global competition and opportunities to provide jobs, innovation and value locally."

The team urges policymakers to factor in domestic energy needs, local up-skilling, and equitable benefit-sharing in future hydrogen strategies. The findings serve as a cautionary tale: without transparent investment frameworks and inclusive planning, Africa’s green hydrogen boom may be built on unstable economic and ethical foundations. 

Without government-backed guarantees, financing costs for green hydrogen projects in Africa could make production prohibitively expensive, potentially pricing them out of the global market.

Read the full paper here: https://www.nature.com/articles/s41560-025-01768-y