Hydrogen Heralds Hopeful Horizons for Heavy Industry

On June 24, 2025, a momentous accord was forged in Oran, Algeria, as Sonatrach, the country’s largest energy conglomerate, allied with Hecate Energy Global Renewables, an American leader in clean energy, and Tosyali Iron Steel Industry Algeria SPA, a major steel manufacturer. This tripartite memorandum of understanding marks a decisive step toward an integrated green hydrogen project fueled entirely by renewable energy sources. The goal is to decarbonize Algeria’s steel industry, traditionally one of the most polluting sectors, by replacing fossil fuels with green hydrogen in steelmaking processes.

The signing, held at the Oran Convention Center "Ahmed Ben Ahmed" during Sonatrach’s 12th Scientific & Technical Days, embodies a collaborative spirit aimed at sustainable industrial innovation. This initiative responds directly to escalating global calls for climate action and aligns with Algeria’s commitment to its Nationally Determined Contribution under the Paris Agreement.

Dual-Phase Development Designs for Decarbonization

The project follows a meticulously crafted two-phase developmental framework. The first phase is devoted to exhaustive feasibility and viability studies. These assessments will meticulously evaluate the technical, economic, and environmental feasibility of producing green hydrogen at scale using Algeria’s abundant renewable resources such as solar and wind energy.

This phase will encompass detailed analyses of hydrogen production technologies, including electrolysis efficiency, renewable energy integration, and infrastructure compatibility. Economic assessments will determine cost competitiveness, potential market demand for green steel, and investment risks, while environmental studies will quantify anticipated emission reductions and ecological impacts.

Should these investigations affirm the project's promise, the second phase will progress to engineering design, infrastructure construction, and operational commissioning of the hydrogen production facility. This will facilitate a pioneering industrial ecosystem where steel manufacturing is powered by zero-carbon hydrogen, setting a benchmark for clean metallurgy in Africa and beyond.

Renewable Relevance Rooted in Algeria’s Ambitious Agenda

This groundbreaking partnership dovetails seamlessly with Algeria’s strategic ambitions to diversify its energy portfolio and decarbonize its economy. The government’s National Renewable Energy and Energy Efficiency Strategy aims to substantially increase renewable energy capacity, targeting a significant share of electricity generation from clean sources by 2030.

Sonatrach’s active role in this paradigm shift includes reducing natural gas consumption, Algeria’s dominant fossil fuel, while simultaneously cutting greenhouse gas emissions across industrial sectors. Green hydrogen, produced via renewable-powered electrolysis, emerges as a pivotal enabler for this transition, especially in hard-to-abate sectors like steelmaking, cement, and chemicals.

The project’s alignment with national priorities exemplifies how state-owned enterprises can catalyze large-scale decarbonization by leveraging strategic partnerships and technological innovation.

Legacy of Landmark Memoranda & Multilateral Momentum

The memorandum signed in 2025 builds upon a foundation laid by earlier agreements in 2024. On April 29, 2024, Sonatrach and Hecate Energy Global Renewables signed a memorandum to conduct a feasibility study on renewable energy production in Algeria. Later that year, on July 24, 2024, Sonatrach and Tosyali formalized a study focused on producing green hydrogen for steel manufacturing at Tosyali’s complex.

These preliminary collaborations demonstrated growing confidence among stakeholders and paved the way for integrated project planning. The current memorandum consolidates these efforts into a cohesive roadmap, reflecting a maturing partnership intent on advancing from exploratory research to concrete implementation.

Industrial Innovation Igniting Infrastructure Investments

The green hydrogen initiative promises to be a transformative industrial catalyst. By integrating green hydrogen into Tosyali’s steelmaking processes, the company anticipates drastically lowering its carbon intensity. Traditional steel production relies heavily on coal and natural gas for the reduction of iron ore, emitting vast quantities of carbon dioxide. Substituting green hydrogen as a reducing agent eliminates these emissions at the source.

Beyond environmental benefits, the project will stimulate significant infrastructural investments. These include electrolyzers, hydrogen storage and transport facilities, renewable energy generation assets, and modifications to existing steelmaking equipment to accommodate hydrogen feedstock.

Such investments will generate employment opportunities during construction and operational phases, fostering skills development and technological expertise within the Algerian workforce. Ancillary industries related to renewable energy and hydrogen technology are also expected to flourish, amplifying the project's socio-economic impact.

Environmental Excellence & Emission Abatement Ambitions

The steel sector accounts for approximately 7% to 9% of global carbon dioxide emissions, making it a critical target for climate mitigation. Algeria’s adoption of green hydrogen in steelmaking represents a major stride in tackling industrial emissions at their source.

Replacing carbon-intensive fossil fuels with green hydrogen, produced through renewable-powered electrolysis, significantly reduces carbon dioxide emissions. This aligns with Algeria’s commitment to global climate goals and supports the broader ambition of limiting global warming to well below 2 degrees Celsius, as stipulated by the Paris Agreement.

Moreover, the project highlights the practical viability of coupling renewable energy with industrial processes to achieve substantial emission abatements, setting an example for other resource-rich countries seeking sustainable growth trajectories.

Collaborative Conclaves Catalyzing Carbon Consciousness

The timing of the memorandum’s signing during Sonatrach’s 12th Scientific & Technical Days was no coincidence. This premier event gathers industry experts, government officials, researchers, and technology developers, fostering an environment conducive to innovation and strategic partnerships.

Such forums play a crucial role in accelerating the dissemination of knowledge, best practices, and cutting-edge technologies essential for the energy transition. They also facilitate policy dialogue, enabling alignment between regulatory frameworks and technological capabilities.

By showcasing this collaborative project at the event, Sonatrach reinforces its leadership in spearheading Algeria’s clean energy transition and industrial decarbonization.

Forward-Focused Frameworks Fostering Future Frontiers

Looking ahead, the green hydrogen and green steel project spearheaded by Sonatrach, Hecate Energy, and Tosyali serves as a prototype for sustainable industrial transformation. Its success could catalyze replication across other energy-intensive sectors within Algeria and neighboring countries.

This venture illustrates the power of public-private partnerships in mobilizing resources, expertise, and innovation towards shared climate and development objectives. As Algeria pursues greater energy diversification and emission reduction, projects like this illuminate a pathway towards resilient, low-carbon industrial economies.

By embracing cutting-edge renewable technologies and sustainable practices, Algeria positions itself as a pioneer in Africa’s clean energy revolution, simultaneously fostering economic growth and environmental stewardship.

Key Takeaways:

• Sonatrach, Hecate Energy Global Renewables, and Tosyali have signed a memorandum to jointly develop a green hydrogen project for sustainable steel production in Algeria.

• The project will be executed in two phases, beginning with comprehensive feasibility studies, followed by infrastructure development to produce green hydrogen from renewable energy.

• This initiative aligns with Algeria’s national strategy to reduce natural gas use and greenhouse gas emissions, marking a significant advancement in the country’s energy transition.