EU’s blind spot?
In place now for 20 years, the EU's Southern Neighbourhood Policy has lost momentum
and become increasingly fragmented. With a rapidly changing geopolitical environment,
the time is ripe to address MENA in a new way. These countries are prime candidates
for tailored partnerships on green, social and economic transition.
MENA?
MENA is a heterogenous region, we therefore highlight four
groups of countries:
1
10
6
3
Türkiye
Southern Neighbourhood
Gulf Cooperation Council
Additional MENA countries
Algeria, Egypt, Israel, Jordan, Lebanon, Libya,
Morocco, Palestinian Territories, Syria*, and Tunisia
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and
the United Arab Emirates (UAE)
Iran, Iraq, and Yemen
*Very limited data coverage
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
0
0
0
0
1
3
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
1
1
1
0
1
6
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
1
1
1
0
1
6
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
0
1
1
0
1
5
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
1
1
1
0
1
6
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
0
1
0
1
0
4
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
0
1
1
0
1
0
4
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
0
0
1
0
1
1
4
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
0
1
1
1
0
5
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
1
1
0
1
0
5
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
0
1
0
1
0
4
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
1
1
1
0
1
0
5
More than a partial scope agreement?
Substantive provision on services?
Substantive provision on investments?
Substantive provision on standards?
Substantive provision on public procurement?
Substantive provision on competition?
Substantive provision on intellectual property rights?
Total range
Source: Dür, A., Baccini L., and Elsig M. 2014.
The Design of International Trade Agreements: Introducing
a New Dataset. The Review of International Organizations.
1
0
1
1
0
1
0
4
Population
2020
2028
GDP PPP
2020
2028
Trade Volume
2022
2020
2010
2028
2000
1990
China
EU
USA
MENA
2020
MENA's 528m residents represent about 7% of the
global population. Its population surpassed the EU
in 2018 due to higher fertility rates and the EU´s
loss of the UK due to Brexit in 2020.
1.3
1.1
1.1
European Union
5.8%
4.3%
18.4%
445m people were living
in the EU in 2020, which
is economically and politi-
cally the world’s most
integrated regional
market.
China
1.41bn people were living in China in
2020. China has the biggest market
world-wide in terms of potential
customers. Due to gaps in regional
development, its potential has not
yet been fully tapped.
USA
331m people were living
in the US in 2020. Due to
high purchasing and con-
sumption power, it is one
of the most attractive
markets worldwid.
* No reliable data on Syria
MENA
Among the 20 nations, Egypt (101m),
Iran, and Türkiye (both 84m) have the
largest populations. In contrast, Gulf
states like the UAE (9.2m), Kuwait
(4.7m), Qatar (2.7m), and Bahrain
(1.5m) are economic centers with
smaller populations, reflecting their
high migrant worker count.
19 MENA states’
share of the world
population*
6.9%
2020
2010
2028
2000
1990
China
EU
USA
MENA
2028
In just eight years, the combined population of the 20 MENA
countries is projected to grow by around 60m. Egypt is set to
account for 17m of this increase, with its population rising at
1.8% annually — adding a million citizens
every six months.
1.4
1.1
1.1
European Union
5.4%
4.2%
17.0%
Low birth rates mean the
EU relies on net immigration
to offset population decline.
An additional 2m people
are projected for the
Single Market by 2028,
excluding the 4m Ukrainian
refugees from 2023.
China
Chinas one-child policy led to lower
fertility rates. Now, like the US and EU,
China's share of the global population
is decreasing, and at a quicker rate
than either the US or EU.
USA
Though the US population
is projected to rise by 15m
by 2028, its relative share
of the global population
will decrease.
MENA
The MENA region has a notably young
population, with an estimated median
age of 27 years. This leads to a pronounced
"youth surplus" and high youth unem-
ployment. Consequently, a brain drain is
observed as educated youth leave their
countries for better job prospects abroad.
18 MENA states’
share of the world
population*
7.1%
* No reliable data on Lebanon and Syria
M F
2020
2010
2028
2000
1990
USA
EU
China
MENA
2020
GDP trends highlight three patterns. The US and EU have parallel
trajectories, but the US weathered the 2008 financial crisis better.
China, trailing behind in 1990, has experienced an unprecedented
GDP rise in recent decades.
MENA, relying mainly on a fossil fuels-based economic model,
was ahead of China until 2004. Now, the region is pressed to
seek new pathways for sustainable economic growth.
1.0
1.9
1.0
1.3
European Union
14.9%
15.8%
18.1%
China
USA
China’s GDP reached 24.2trn USD in 2020,
cementing its position as a global economic
powerhouse. This growth reflects China's
sustained economic reforms, infrastructural
development, and its role as the world's
primary manufacturing hub.
The EU GDP stood at 19.9trn
USD in 2020. Over the years,
both enlargements and the
departure of the UK influenced
its economic metrics. The most
prominent shift was an 18%
decline from 2019 to 2020,
chiefly due to the combined
pressures of Brexit and the
COVID-19 pandemic.
In 2020, the US had a GDP
of 21trn USD. Despite set-
backs from the Dotcom bub-
ble, the Lehman Brothers'
collapse, and the COVID-19
pandemic, the US
economy has shown
remarkable resil-
ience, always
bouncing back.
MENA
In 2020, the MENA´s GDP reached 10.4trn USD,
comprising 7.8% of the global GDP. Türkiye
contributed 1.9%, followed by Saudi Arabia at
1.3%, and both Iran and Egypt at 1.0% each.
Traditionally, nations in the Gulf have been pivotal
to the region's GDP growth, but they encountered
significant energy price fluctuations during the
pandemic.
18 MENA states’
share of global
GDP (PPP)*
7.8%
* No reliable data on Lebanon and Syria
2020
2010
2028
2000
1990
USA
EU
China
MENA
2028
By 2028, China is set to solidify its lead as the world's premier
economy in GDP terms, with the US and the EU following at a
considerable distance.
In the MENA region, robust growth is anticipated, mirroring
trends in the US and the EU. Five MENA states — Türkiye,
Saudi Arabia, Egypt, Iran (notwithstanding its isolation),
and the UAE — are projected to constitute over
three-quarters of the region's GDP.
1.2
2.1
0.9
1.3
0.5
European Union
China
China's GDP is projected to be
55% bigger than in 2020, trans-
lating into a 1.6 PP gain
in global share.
EU GDP is projected to be
65% bigger than in 2020,
translating into a 1.2 PP
loss in global share.
USA
US GDP is projected to
be 65% bigger than in
2020, translating into
a 1.3 PP loss in
global share.
13.7%
14.5%
19.7%
MENA
The GDP of the MENA region is projected to be 73% larger
than in 2020, which makes up for a 0.2 PP gain in global
share, increasing the region’s global economic importance.
Elevated oil prices, coupled with ambitious investment plans,
promise to sustain solid growth. However, continuing conflicts,
water stress, and social inequality pose a significantly higher
threat to growth rates than in other regions.
18 MENA states’
share of global
GDP (PPP)*
8.0%
* No reliable data on Lebanon and Syria
2022
2008
2003
1990
2020
2015
USA
EU
China
MENA
Global trade has experienced a roller-coaster ride, starting with vibrant
expansion in 2003, disrupted by the 2008-2009 recession. The ensuing
2010-2014 phase saw a revival, which ebbed in 2015-2016. More
recently, the trade landscape has bounced back from the
COVID-related disruptions of 2020-2021.
MENA's trade patterns echo these
movements, albeit at a
reduced magnitude.
2022
1.5
0.4
0.4
1.2
1.2
European Union
11.8%
10.7%
12.8%
In 2022, the EU's trade volume
reached 5.87trn USD, under-
scoring its global trade
prominence, though it
trailed just behind China.
Brexit notably impacted
this, as the EU parted
with a significant trade
contributor.
China
China attained a trade volume of 6.32trn
USD in 2022, securing its position as the
'world trade champion'. Unlike in the US,
exports drive China's trade, making up ap-
proximately 60% of its total trade volume.
USA
The US tallied a trade
volume of 5.31trn USD,
ranking third globally
after China and the EU.
While the US stands as
a dominant figure
in global trade, it
heavily relies on
imports, notably
from China, the
EU, Mexico, and
Canada.
MENA
Fossil fuel-rich MENA countries are set for steady growth.
Using the revenues from fossil fuel sales, these nations can
invest in diversifying and updating their economies, especially
in advancing green energy initiatives. On the other hand, MENA
countries with limited fossil fuel reserves might grapple with
the high costs of food and energy imports. However, by forging
green partnerships with the EU, they can transform into hubs
for renewable energy and ease their economic challenges.
20 MENA states’
share of the global
trade volume
6.6%
Trade Relations 2022
European Union
China
USA
Share of total trade with the EU
Southern Neighbourhood
Gulf Cooperation Council
Türkiye
39.4%
26.1%
29.5%
MENA
Other
57.0%
12.1%
15.6%
15.4%
USA
China
7.4
4.9
29.5%
11.3%
8.3%
7.9%
Other: Kuwait 1.5%, Lebanon 0.9%, Iran 0.8%, Oman 0.8%, Jordan 0.7%, Bahrain 0.5%, Yemen 0.2%, Palestinian Territories 0.1%, Syria 0.1%.
7.0
5.5
4.6
4.2
3.9
5.5
Türkiye
Libya
Egypt
Saudi Arabia
Algeria
Morocco
UAE
Israel
Qatar
Iraq
Tunisia
Other*
MENA
European
Union
China
USA
EU-MENA Trade Disaggregated
-
Türkiye is the EU’s most important MENA trade partner,
with a share of close to 30%. The Southern Neighbour-
hood countries collectively account for 39.4% (Algeria
8.3%, Morocco 7.9%, Israel 7.0%, others 16.2%) and
the GCC countries for 26.1% (Saudi Arabia 11.3%, UAE
7.4%, Qatar 4.6%, others 2.8%) of the EU’s total trade
volume with the MENA-region.
EU Major Trade Ties
Both the US and China are the EU’s most important
trade partners in terms of total trade volume. While
China is the EU’s main source of imports, the US is
the most important export market for the EU.
However, the MENA states also have significant
weight in extra-EU trade (12.1%) with exports and
imports being nearly even.
377 bn
536
bn USD
659 bn
242
bn
366 bn
342
bn
Share of total trade with China
Southern Neighbourhood
Gulf Cooperation Council
Türkiye
14.9%
62.9%
7.7%
7.7%
6.3%
5.3
5.1
23.1%
19.8%
10.6%
8.0%
3.6
Türkiye
Iran
Egypt
Saudi Arabia
Kuwait
UAE
Israel
Qatar
Iraq
Oman
Other*
3.2
7.3
Other: Algeria 1.5%, Morocco 1.3%, Jordan 1.3%, Libya 1.1%, Yemen 0.7%, Lebanon 0.5%, Tunisia 0.4%, Bahrain 0,4%, Syria 0.1%, Palestinian Territories 0.03%.
Other
66.6%
7.9%
13.4%
12.0%
MENA
USA
EU
MENA
226
bn
275
bn USD
562 bn
285
bn
583
bn
179
bn
European
Union
China
USA
China-MENA Trade Disaggregated
-
China's foremost trade partners in the MENA region
are Saudi Arabia (23.1%) and the UAE (19.8%). The
GCC states constitute nearly two-thirds of China's
trade volume with the region. In 2020, China out-
stripped the EU, becoming the predominant trading
partner for the GCC.
China’s Major Trade Ties
China’s trade relations strongly focus on exports. Exports account for
76% of China’s trade volume with the US and 66% of that with the
EU. China’s trade focus lies within its neighbourhood: Asia Pacific
states account for one third of China’s total trade volume.
The MENA-region accounts for merely 7.9% of China’s trade volume.
However, numerous ‘Belt and Road Initiative’ projects show China’s
ongoing strategic interest in the region.
Share of total trade with the US
Southern Neighbourhood
Gulf Cooperation Council
Türkiye
33.4%
42.8%
17.7%
MENA
Other
66.4%
13.0%
3.6%
17.0%
China
EU
4.9
5.8
3.4
18.7%
18.3%
17.7%
14.5%
16.7
Türkiye
Egypt
Saudi
Arabia
UAE
Israel
Qatar
Iraq
Other*
Other: Kuwait 2.9%, Morocco 2.7%, Jordan 2.4%, Algeria 2.2%, Oman 2.2%, Bahrain 1.5%, Libya 1.3%, Tunisia 0.7%, Lebanon 0.5%, Yemen 0.2%, Iran 0.03%, Palestinian Territories 0.01%, Syria 0.01%.
MENA
104
bn
554
bn
350
bn USD
537
bn
154 bn
87 bn
European
Union
China
USA
US-MENA Trade Disaggregated
-
Israel is the most important MENA trading partner of
the US, with a total trade volume of 18.7%, followed
by Saudi Arabia (18.3%), Türkiye (17.7%) and the UAE
(14.5%). These four countries account for almost 70%
of US-MENA trade. The US is much less dependent on
MENA oil and gas than both China and the EU, as it has
itself become a net energy exporter in the last decade.
US Major Trade Ties
The EU and China are two of the most important trade partners of the US.
They share a strong focus on imports to the US. Imports account for 78%
of the US trade volume with China and 61% of that with the EU.
By comparison, MENA countries show barely any weight in US global trade
relations (3.6%). For instance, Israel, the top trading partner of the US in
the region, accounts for a mere 0.7% of the US total trade volume.
Trade Arrangements
Overview
European Union
China
USA
In this infographic, Free Trade Agreements (FTAs) are described as
treaties, either bilateral or multilateral, entered into by governments
or regional organisations to reduce tariffs on the majority of traded goods.
The term 'depth' differentiates among FTAs, with a score of 1 signifying
tariff elimination. Additional aspects, such as services trade, investments,
standards, public procurement, competition, and intellectual property
rights, contribute to the depth score, which can achieve a maximum of 7.
USA
USA
China
EU
EU
USA
China
EU
EU
USA
EU
EU
EU
Israel
Türkiye
GCC
Bahrain
Oman
Morocco
Algeria
Tunisia
EU
USA
EU
Egypt
Southern Neighbourhood
GCC
GCC countries
Türkiye
Lebanon
Jordan
European Union
Between 1998 and 2006, bilateral free trade
agreements have been established between
the EU and its southern neighbours through
Euro-Mediterranean Association Agreements
(except Syria and Libya), essentially covering
trade in goods. Negotiations on Deep and
Comprehensive Free Trade Agreements (DCFTAs)
with Morocco, Tunisia and Egypt are on hold.
The 2005 Pan--Euro-Mediterranean (PEM)
Convention sets rules designed to simplify
trade and consolidate regional supply chains.
EU-MENA trade policies bolster both regional
and trans-Mediterranean cooperation.
EU-GCC relations are based on a
Cooperation Agreement from 1988
and encompass, among other issues,
regular dialogue on macroeconomic
matters, climate change and energy.
Negotiations on an EU-GCC FTA were
suspended in 2008. An informal EU-
GCC-Dialogue on Trade and Invest-
ment was launched in 2017; followed
by the EU-GCC Dialogue on Economic
Diversification in 2019.
EU FTAs in detail
China
China engages with the MENA
countries through Strategic
Partnerships (SP), Comprehen-
sive Strategic Partnerships
(CSP) and the Belt-and-Road--
Initiative (BRI). China esta-
blished such agreements with
11 MENA countries between
1993 and 2016 (BRI MoUs with
Tunisia and Libya in 2018).
Although no FTAs, both CSPs
and BRI contain trade rela-
tions as a priority.
China and the GCC started
negotiations on an FTA in 2004.
Establishing the China-Gulf-FTA
has been high on Beijing’s agen-
da in recent years.
China’s FTAs in detail
USA
Launched in 2003, the US-
Middle East Free Trade Area
(MEFTA) initiative was an
ambitious plan to achieve a
single free trade agreement
between the US and MENA.
MEFTA was clearly driven by
US geopolitical and security
interests and not just econo-
mic goals.
Subsequent US administrations
have not maintained this mo-
mentum. By 2022, the US had
FTAs with only five MENA states
and TIFAs with a few others. The
USA pursues dialogues with
these countries to boost US ex-
ports and support intra-regional
trade.
The US and the GCC signed a
Framework Agreement for Trade,
Investment and Technical Coop-
eration in 2012.
US FTAs in detail
European
Union
4
3
1
2
Morocco:
Association Agreement (2000) & Agree-
ment on additional liberalisation of trade in agricul-
tural products (2012) - established Free Trade Area;
DCFTA negotiations started in 2013, on hold now
Algeria:
Association Agreement (2005) - established
Free Trade Area, save for a few remaining tariffs that
Algeria is yet to eliminate
Tunisia:
Association Agreement (1998) - established
Free Trade Area; DCFTA negotiations started in 2015,
on hold now
Egypt:
Association Agreement (2004) & Agreement
on agricultural, processed agricultural and fisheries
products (2010) - established Free Trade Area; DCFTA
negotiations started in 2013, on hold now
Türkiye:
Customs Union (1995) & Association Agree-
ment (1963); discussions about the modernisation of
the Customs Union since 2016; EU accession nego-
tiations started in 2005, on hold now
Israel:
Association Agreement (2000) & Agreement
to open up additional agricultural trade (2010), addi-
tional agreement on pharmaceuticals - established
Free Trade Area
Lebanon:
Association Agreement (2006) - established
Free Trade Area
Jordan:
Association Agreement (2002) - established
Free Trade Area
4
5
4
5
4
5
4
4
1
2
3
4
4
6
5
FTA Depth Index
IN FORCE
In 2022, the EU had in force FTAs
with seven of 20 MENA states
with varying depths. Negotiations
on Deep and Comprehensive Free
Trade Agreements (DCFTA) are on
hold.
Since 1995, the EU has had a
Customs Union with Türkiye.
ON HOLD
FTA negotiations with the GCC
started in 1990, suspended in
2008.
6
5
7
8
4
7
4
8
On a scale from 1-7, agreements
reach depth values between four
and five. Rollover for details.
IN FORCE
In 2022, the EU had in force FTAs
with seven of 20 MENA states
with varying depths. Negotiations
on Deep and Comprehensive Free
Trade Agreements (DCFTA) are on
hold.
Since 1995, the EU has had a
Customs Union with Türkiye.
ON HOLD
FTA negotiations with the GCC
started in 1990, suspended in
2008.
European
Union
1
Gulf Cooperation Council:
Negotiations on FTA
started in 1990, suspended in 2008 (EU-GCC invest-
ment and trade dialogue ongoing, discussing the
possibility of further FTA negotiations)
1
China
1
Israel:
FTA under negotiation since 2016,
7th round of negotiations held in 2019.
Gulf Cooperation Council:
FTA under
negotiation since 2004, started in 2005.
1
2
UNDER NEGOTIATION
China is in FTA negotiations
with Israel and the Gulf
Cooperation Council.
2
4
2
1
Morocco:
Free Trade Agreement (2004)
Israel:
Free Trade Agreement (1985)
Jordan:
Association Agreement (2002) - established
Free Trade Area
Bahrain:
Free Trade Agreement (2006), and TIFA
Oman:
Free Trade Agreement (2009), and TIFA
TIFA:
Trade and Investment Agreements in force
Algeria
Egypt
GCC
Kuwait
Lebanon
Qatar
Saudi Arabia
Tunisia
Türkiye
UAE
Yemen
6
5
3
6
6
1
2
3
4
FTA Depth Index
IN FORCE
The US had FTAs in force with
five out of 20 MENA states in
2022 – on varying depth levels.
The US has TIFAs with additional
ten MENA states and the GCC.
TIFAs function to provide strategic
frameworks and principles for
dialogue on trade and investment.
5
USA
5
3
On a scale from 1-7, agreements
reach depth values between three
and six. Rollover for details.
Energy Cooperation
RePowerEU Scenario
Hydrogen Projects
Hydrogen Cases
1800
1600
1400
1200
1000
800
600
400
200
0
EU Hydrogen demand (TWh)
Imports from MENA
2050
2045
2040
2035
2030
2025
2000 TWh
Scenario: EU’s hydrogen production potential and possible MENA contributions
While the US and China can meet their green energy demands, the EU will lean on external sources. Green hydrogen
trade will be pivotal for the EU's 2050 net-zero targets. The MENA region, abundant in renewable potential, can
cater to both its own and the EU's surging green hydrogen needs, forecasted to hit 2000 TWh by 2050.
Morocco
With its early strides in renewable energy production, Morocco is
on its way to becoming the MENA region's frontrunner in significant
green hydrogen trade. Within their Green Partnership Agreement,
Morocco and the EU are pursuing a hydrogen roadmap.
Tunisia
Tunisia, having collaborated with Germany on a green hydrogen strategy,
holds potential as an early green hydrogen supplier. However, due to pre-
vailing political uncertainties, decision-making on various projects has
slowed down, which poses risks to timely implementation.
Algeria
Algeria, traditionally a significant exporter of fossil fuels,
might leverage its hydrocarbon expertise towards hydro-
gen, anticipating potential declines in oil and gas demand.
Recently, the EU has initiated an extensive high-level
dialogue with Algeria focusing on green hydrogen.
Egypt
COP27 was a defining moment for Egypt's renewables
sector. Despite its commendable progress, much remains
to be done in the realm of green hydrogen. The MoU on
an EU-Egypt strategic partnership promises to expedite
these efforts.
Saudi Arabia
Saudi Arabia is producing blue hydrogen and earmarked
USD 6 billion for green hydrogen initiatives. The biggest of
these projects is set to commence production in 2025.
Libya
Libya boasts immense potential for production. While its
neighbours advance in renewables, Libya remains solely
reliant on hydrocarbons. Given ongoing concerns about
national stability, substantial green hydrogen production
seems distant, yet not entirely out of reach.
Ammonia shipping
Europe*
Europe’s domestic hydrogen production sees a slow start
in the 2030s. As with all new technologies, it takes time
to establish industrial scale value chains between pro-
duction and consumption. Hydrogen production can
double in 2040 in relation to 2035.
Hydrogen demand (~80%) is driven by the industry.
Transport, power and heating plants add to that.
*
In this scenario, Europe
refers to the EU member
states, Great Britain,
Norway and Switzerland
143
260
585
865
1180
domestic production doubled
EU hydrogen
demand 2050
In 2050, domestic hydrogen
production has sped up
substantially, covering
approx. 60% of Europe’s
demand (1180 TWh).
Nethertheless, imports
from MENA countries
are needed, covering
ca. 40% of the demand
(860 TWh).
860
Syria
9
2
Libya
Iraq
Iran
Yemen
12
2
4
1
2
1
10
24
4
2
1
1
1
71
5
Green Hydrogen
projects announced
or operational
Blue Hydrogen
projects
Note: Numbers refer to projects in development as of September 2023
Announced
N/A
MoU
Feasibility
Study
Framework
Agreement
Operational
32
2
27
6
8
2
Respective
project
status
Pipelines
Repurposed
New
Subsea
Import/Export
Gas-import-terminal
Offshore production
MENA Hydrogen Projects
Between 2020 and 2023, the number of
announced hydrogen projects in the MENA
region has increased drastically. The vast
majority are green hydrogen projects, with
very few relying on blue hydrogen gene-
rated from natural gas. In the MENA region
Egypt is the frontrunner, with 1 green
hydrogen plant operational and 23 more
announced. Egypt is followed by Oman
(12), the UAE (10), and Morocco (9).
The main challenge for both the MENA
region and the EU is continued financial
support and development of said projects
in order to make them operational.
Potentials for renewable energy production
in the MENA region, thereby, have to be
used in a way that balances EU green
hydrogen import needs and the local
green energy demands.
European Hydrogen Infrastructure Challenges
The European Commission has acknowledged the role of hydrogen in decarbonizing
the EU and reducing its dependency on imported fossil fuels. Green hydrogen is both
technologically feasible and cost effective. However, establishing a resilient hydrogen
infrastructure is key.
Current EU hydrogen infrastructure strategies have
mostly revolved around creating intra-European networks.
EU planning should focus more on interconnectivity with
the MENA region, in order to establish a comprehensive
hydrogen value chain.
Operational
H2 power
plant
Fujairah
Terminal
H2 storage
possibilities in
Northern Africa
Morocco as a frontrunner
Morocco has long prioritized renewables,
with major entities like OCP sourcing 86%
of its electricity from green energy. Despite
having initiated Solar and Wind Power
Plans as early as 2009/2010, operational
hydrogen projects remain absent.
Future collaborations, such as the EU-
Morocco Hydrogen roadmap must
address regional strategic challenges,
notably the Western Sahara conflict.
EU-MENA interconnectivity
For the EU's future hydrogen trade and distribution, establishing an integrated energy market is essential.
The accompanying regulatory framework should be developed cooperatively. Integration should combine
both repurposing existing infrastructure and innovative projects, reducing cost and ultimately fostering
growth and job creation in the region. Leveraging synergies between energy and data transmission is key,
such as between SoutH2 Corridor and ELMED interconnector.
Hydrogen infrastructure solutions
To ensure a steady hydrogen supply, storage is pivotal.
Salt caverns and depleted gas reservoirs are prime
locations. Europe's potential is distributed unevenly, with
42% in Germany. MENA has storage options of its own,
but limited repurposing potential.
Transport networks are essential for hydrogen inte-
gration. The 2020 European Hydrogen Backbone
(EHB) initiative proposed a widespread network
across Europe by 2040, building on existing gas
pipelines.
Egypt could deliver
Egypt has the first operational green hydrogen production plant in Africa, a joint venture between
the Norwegian Scatec, Emirati Fertiglobe, and the Sovereign Fund of Egypt. However, there is still
significant potential for further implementation of announced projects. Progress could be sped up
through common skilled labour training programs and better governance structures. Decentralized
approaches could help distribute benefits of the hydrogen economy beyond urban centres.
Powerhouse GCC
The GCC countries have a comparative advantage in hydrogen
production because of its similarity to hydrocarbons. Hydrogen
might also enable maintaining energy export patterns and there-
by retaining the GCC’s influence over global energy markets. The
UAE’s sizeable investment in their Fujairah Terminal, the world’s
second largest hydrocarbon fuel bunkering port, may only yield
returns if it can be adapted to green hydrogen.
To make the most of this momentum and
untap both regions’ technological and finan-
cial potentials, further broadening of political
and people-to-people relations between the
EU and the GCC countries is necessary, as
agreed on in the EU-GCC joint council and
ministerial meeting in October 2023.
Authors:
Christian Hanelt
Christian Hanelt
, Anna Hautmann, Kalum Rock,
Alexander Weber &
Stefani Weiss
Stefani Weiss
Data Analysis, Visual/UX Concept and Realization:
Dollacker & Waldik GbR
Dollacker & Waldik GbR
© Bertelsmann Stiftung,
Global & European Dynamics - (globaleurope.eu)
Program Europe’s Future
, October 2023
Picture: Dubai, UAE, Pexels
Use window of opportunity
Create win-win solutions
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Take on long-term responsibility
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Instead of extending short-term budgetary aid, the EU should provide
targeted support tied to progress in renewable energy development. This
approach guarantees predictable export revenues for the MENA region and
furthers the decarbonisation efforts of both EU and MENA economies.
The EU and MENA should work together to improve their implementation
and absorption capacity. This would mean emphasizing skills partnerships,
strengthening of governance, infrastructure, and interconnectivity.
The EU needs to bundle political, administrative, and financial capacities,
setting aside national differences. Global Gateway provides a framework for
resource pooling, leaving adequate flexibility for innovative initiatives.
The EU should reinvigorate its trade relations with MENA to better serve the
green economic and social transition. A solid political and legal framework
is essential for attracting private investments. Moreover, the EU must
intensify its commitment to conflict resolution in the Western Sahara, the
Nile Basin, between Israel and Palestine, and the power struggle involving
Israel, Iran, and Saudi Arabia.
Recommendations for the EU concerning
the MENA region