Egyptian President Abdel Fattah El-Sisi has ratified a pivotal law, Law No. 2 of 2024, aimed at incentivizing green hydrogen production projects and its derivatives. This landmark legislation grants up to 55% in tax incentives for such projects, marking a significant step in Egypt’s commitment to sustainable energy development.
The newly ratified law introduces the ‘green hydrogen incentive’, a cash investment incentive ranging between 33% to 55% of the paid tax value. This incentive, approved by the tax authority, applies to income generated from both the primary project and its expansions. The Ministry of Finance is mandated to disburse this incentive within 45 days of approval.
The Egyptian House of Representatives, led by Counselor Dr. Hanafi Jabali, Speaker of the Council, previously endorsed Article 5 of this draft law. This article specifically stipulates that green hydrogen production projects and their expansions, as defined in Article 2 of the law, will be eligible for additional incentives beyond those outlined in Article 4.
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The draft law encompasses various incentives, exemptions, and guarantees, primarily focusing on retaining current investors engaged in green hydrogen production. The objective is to create an appealing investment climate, expediting the implementation of these projects within Egypt. The aim is to position the country as a global hub for green hydrogen projects, leveraging its reliance on renewable energy sources like solar and wind.
These efforts align with Egypt’s broader strategy to attract serious green hydrogen production projects capable of real-world implementation. The package of incentives outlined in the law is subject to specific controls and conditions, applicable throughout the duration of the agreements and including future expansions.
The law is consistent with the Egyptian Constitution’s economic components. It aligns with goals of sustainable development, job creation, unemployment reduction, competitiveness support, investment encouragement, production increase, export promotion, and optimal exploitation of renewable energy sources. It also aims to stimulate private sector investment in national economic and societal development, particularly in the Suez Canal sector, recognized as a key economic hub.
The parliamentary report underscores that this law is part of the state’s ongoing efforts to establish Egypt as a leader in the green hydrogen economy, leveraging its strategic location and efficient utilization of renewable energy sources.
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