Germany, the largest future hydrogen importer in the EU, and Egypt, a country with an ambitious hydrogen strategy, are developing a partnership to boost renewable hydrogen production in Egypt. However, high funding costs are a barrier to capital-intensive investments in hydrogen projects, in particular in emerging economies. The Carbon Border Adjustment Mechanism (CBAM) provides an incentive to decarbonise but faces resistance in emerging economies as it may undermine the competitiveness of emission-intensive local production. This article examines approaches to a successful implementation of the hydrogen partnership between Germany, the EU, and Egypt.
Geoeconomics – one of DGAP’s core themes – explores how the politics of trade, technology, finance, and/or energy can be employed to achieve strategic goals. For Europe to remain a key player internationally, the continent must help define the rules of a new geoeconomic world order. DGAP looks at how Germany can contribute to better positioning Europe in this increasingly competitive landscape.