(Bloomberg) -- A BP PLC-led group of developers of green hydrogen in Egypt is looking to tap into domestic demand, having struggled to drum up overseas buyers.
Earlier this year, companies including BP, Abu Dhabi-based Masdar, and Egyptian renewable energy Infinity Power partnered to develop a multi-phase green hydrogen project in the North African nation. But cheaper competition abroad has blunted expected sales.
“We’re struggling to find offtake for our project and so looking at local demand,” Infinity Power Chairman Mohamed Ismail Mansour said in an interview. “We need to cater to the local demand until we find a competitive advantage somehow for the country to be able to compete on the international level.”
BP, which is the lead developer and operator of the project, didn’t respond to a request for comment.
Climate-friendly hydrogen — produced from water and renewable power — has been one of the most-hyped sectors in green energy, but limited demand and high costs have stymied its development. Buyers need to pay a premium for the fuel and special infrastructure is needed to receive and use it.
Green hydrogen can be produced more cheaply in China and other Asian countries than in Egypt, while projects in the US benefit from support via the Inflation Reduction Act, according to Mansour.
With too many production projects chasing too few international buyers, developers are looking to alternative sources of demand. Fertilizer factories in Egypt are a potential source of buyers, as are airlines looking to buy sustainable aviation fuel, he said.
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