Hydrogen law, regulations & strategy in Morocco

The Moroccan Ministry of Energy, Mines and Environment set out in 2021 a roadmap on green hydrogen (the “Roadmap”) and based on the calculations, it is estimated that the green hydrogen industry and its derivatives in Morocco could meet a demand of between 13.9 TWh and 30.1 TWh by 2030 and between 153.9 TWh and 307.1 TWh by 2050.

The Roadmap sets out the following strategy:

• 2020-2030: local usage of green ammonia resulting from green hydrogen in the industry of fertilizers and a focus on exports of green hydrogen-based products,
• 2030-2040: green hydrogen can be used for the storage of energy and for transport as fuel,
• 2040-2050: local usage of green hydrogen to produce heat in the residential sector, urban mobility and aviation.

The Roadmap’s short term 2020-2030 strategy focus on two main objectives: (i) the production of green hydrogen, green hydrogen-based products, and (ii) exports. To date, progress towards these ambitions has centred on the role of renewable energy in the production of green hydrogen, with operational renewable energy projects in Morocco’s southern provinces reaching a total capacity of 5.3 GW in 2024, representing roughly 44.3% of the total capacity of Morocco.

The Moroccan Agency for Sustainable Energy (“MASEN”) states that Morocco is one of the countries with the largest potential for green hydrogen generation, capable of meeting more than 4% of global demand by 2030. This is a major opportunity for Morocco: a lever for decarbonising its economy, creating jobs and generating value. In 2021, Morocco launched “Green Hydrogen Cluster” that contemplates an export market of 10 TWh, mainly to Europe, and a local hydrogen market of 4 TWh. The second general assembly for Green Hydrogen Cluster was held in January 2024, where it was stated that, as part of the Cluster’s objectives, it plans to bring together leading players in the public and private sectors as well as potentially creating an initiative fund to support innovative start-ups in the hydrogen field.

However, while the potential for green hydrogen production in Morocco is vast, in order to achieve the Green Hydrogen Cluster’s ambitious estimate, export infrastructure will need to be constructed. The export of green hydrogen from Morocco to the European Union could either be carried out via the reconverted Maghreb-Europe Gas pipeline or via a new pipeline. Alternatively, rather than exporting the hydrogen itself, green electricity could be exported via an HVDC cable.

According to the Oxford Institute for Energy Studies: data from PwC (2023) estimates that Morocco’s green hydrogen production cost could be between €2-2.50/kg by 2030 and between €1-1.25/kg by 2050 1 . The International Renewable Energy Agency estimates the cost of transportation of hydrogen from Morocco to Europe at $2.05/kg by 2030 and $0.65/kg by 2050.

Several private and public initiatives have been started for the purpose of developing green hydrogen in Morocco notably in research and development such as:

• T2 HE (a joint-venture between TotalEnergies and EREN Group) jointly with two Danish companies “Copenhagen Infrastructure Partners” and A.P Moller Capital have signed on 28^th October 2024 a preliminary contract of land reservation for the project “Chbika” to be implemented in the region of Guelmim-Oued Noun. The project aims to implement a 1GW of onshore solar and wind capacity to power the production of green hydrogen by electrolysis of desalinated seawater, and its conversion into 200,000 tonnes per year of green ammoniac for the European market.
• The OCP Group and the French Group ENGIE have entered into a preliminary agreement of partnership on 28^th October 2024 which contemplates the implementation of 4 major projects relating to: seawater desalination, renewable energy production and green hydrogen, The scheduled date for the start of production relating to green hydrogen projects in expected in 2032.
• A joint venture constituted under Moroccan law and jointly controlled by OCP Green Energy (OGE), and “Fortescue Future Industries” has been authorized by the Moroccan Competition Council on 24 July 2024. The JV aims to develop assets dedicated to the production of green energy, with a particular focus on green hydrogen, green ammonia and green fertilizers.
• Morocco and Germany have entered into an agreement on 28 June 2024 that aims to secure Germany’s future imports of green hydrogen. The alliance between the two countries looks to support increased trade between Morocco and the European Union while also encouraging the participation of German technology companies to advance Morocco’s burgeoning hydrogen sector.

On 11 March 2024, the Government issued the “Morocco Offer”, which details the development of the green hydrogen sectors in the country. The Morocco Offer covers the entire value chain of the green hydrogen sector and is addressed to investors wishing to produce green hydrogen and its derivatives in Morocco for the domestic market, for export or both (further details are set out in the Recent Developments section below).

As renewable energies play a key role in the production of green hydrogen, it is worth to point out that, in addition to the Morocco Offer, Morocco has strengthened its legal framework relating to renewable energy through the entry into force of Law No. 40-19 of 10 February 2023 (“Law 40-19”). Law 40-19 amends Law No. 13-09 on renewable energy of 11 February 2010 and introduced, inter alia, certain changes to the authorisation and declaration systems relating to renewable energy and introduced the possibility for plant operators to request certificates of origin that prove to consumers that the electricity produced by the relevant operator is from renewable energy.

It is also worth noting briefly the regulatory texts  2  relating to Framework Law No. 03-22 of 9 December 2022, which form the “Investment Charter required for the implementation the main investment support scheme for renewable energy projects. Article 25 of the Investment Charter provides that the Kingdom of Morocco undertakes to adopt the necessary measures to reform the energy sector and promote the use of renewable energy in Morocco. The regulatory texts which form the Investment Charter:

• set out a list of provinces and prefectures where investment will be encouraged, as projects located in these areas will receive additional investment under the Investment Charter; and
• sets out the terms of implementation for the support schemes available for strategic investments aligned with the aims of the Investment Charter.

Morocco Green Hydrogen Offer

The Morocco Offer consists of 6 parts:

• the scope of applicability of the Morocco Offer,
• the land mobilized for the implementation of the Morocco Offer,
• the infrastructure for the development of the green hydrogen sector,
• the incentive measures provided by the Morocco Offer,
• the process of selecting the investors and contracting with Morocco, and
• governance of the green hydrogen sector.

Phase I of the Morocco Offer consists of the provision of 300,000 hectares (to be divided into plots of 10,000 to 30,000 hectares) for the development of hydrogen projects. If the selected investors have a justified interest for a larger area, then a minimum land base of 30,000 hectares can be made available to them in a first phase. Additionally, investors can also benefit from various tax and customs incentives provided by the Morocco Offer, including import duty exemptions and value-added tax exemptions on goods purchased domestically and imported goods.

The Morocco Offer provides the process for selecting of investors and/or consortiums who submit offers to MASEN, in order to enter into contractual agreements with the Moroccan State. This process is as follows:

• First, assessment by MASEN of the offers submitted by investors, which is based on various criteria, including financial capacity, and experience in the different segments of the value chain of green hydrogen;
• Then, initial negotiations will take place in relation to the preliminary land allocation between: the selected investors, the steering committee, the investment committee, Wali of the Region or Governor concerned and MASEN. If the negotiations have succeeded, then a “preliminary contract of land reservation” 3  will be concluded pursuant to which the investor undertakes to conduct a preliminary Front-End Engineering and Design study, and the Moroccan State undertakes to provide the exclusive reservation of land the relevant investor for an initial and extendable period of 6 months;
• At the end of the preliminary contract for the reservation of the land and if the parties have fulfilled their commitments, the investor and the Moroccan State will enter into final negotiations to conclude an advanced study agreement pursuant to which the Moroccan State will evaluate the project. Under the advanced study agreement (i) the investor undertakes to conduct an advanced “Front End Engineering and Design” study program that will lead to a “Final Investment Decision” (“FID”), and (ii) the Moroccan State undertakes to grant the exclusive allocation of the land to the investor for the entire duration of the advanced study program until the FID;
• Finally, if the FID is positive and if the investor has fulfilled all the conditions defined in the advanced study agreement, the investor and the Moroccan State will automatically enter into an investment framework agreement  4 .

Under the investment framework agreement, each party will stipulate its commitments for each phase of development of the project, including but not limited to:

• For the Moroccan Stat, the exclusive allocation of land for the entire duration of the implementation and operation of the investment project; and
• For the investor, an investment program which will include details on the costs, timeline, employment requirements, industrial integration, and financial returns for the Moroccan State.

Furthermore, the investment framework agreement it stipulate clauses for meetings between the investor and the Moroccan State (in French: clauses de rendez-vous) in order to assess the evolution of the investment program on a regular basis. 

The key role of MASEN for green hydrogen projects 

MASEN plays a key role in the implementation of the Morocco Offer. It represents the focal point, as the preliminary and privileged contact for investors and consortiums. In this regard, MASEN, in coordination with its governing bodies, is a specialized unit comprising a multidisciplinary cross-functional team dedicated to support green hydrogen project developers. Therefore, Masen is responsible, amongst other missions, for: 

 Communicating the Morocco Offer to the investors,

• Advising companies wishing to invest in green hydrogen,
• Proposing duly argued scenarios for the allocation of land plots to the Green Hydrogen Committee,
• Assisting investors in the completion of the procedures and administrative proceedings required for the implementation of their projects,
• Putting investors in contact with the relevant ministerial departments, public establishments and State-owned enterprises.

MASEN has developed a platform for investors regarding the green hydrogen sector and Morocco has received 40 projects requests from foreign and Moroccan investors on the purpose of investing in green hydrogen as part of the  first step Morocco Offer, as detailed in Development 1 above. 

Future hydrogen regulations 

Morocco has a legal framework regarding renewable energy, gas and public-private partnership for the development and implementation of energy and infrastructure projects. Yet, Morocco does not have a specific legal framework that covers the entire value chain of green hydrogen.

To ensure the legal certainty in the green hydrogen sector, a Moroccan legal and regulatory framework specific to green hydrogen will need developing to cover production, storage, transport and infrastructure as well as a traceability system for verifying the origin of the green hydrogen.

Amongst those currently contributing to the adoption of a Moroccan legal framework for green hydrogen is the Cluster Green H2, which is providing support to the National Hydrogen Commission for the creation of a regulatory framework to promote the development of the green hydrogen sector. Moreover, point No.4 of the green hydrogen Roadmap highlights the cooperation between the Government and the local authorities in order to ensure the coordination and readjustments of the specific regulatory frameworks in order to accelerate the deployment of the green hydrogen industry and its derivatives, while encouraging private investment.