Q&A: Balancing stakeholder interests is key to hydrogen growth

From the newsletter

As Africa’s green hydrogen economy continues to grow, Maximilian Rischer, Research Associate at the Germany-based Research Institute for Sustainability (RIFS), emphasizes the need to balance diverse stakeholder interests and establish effective governance to ensure the sector’s sustainable and inclusive development.

• Mr Rischer cautions against the common mistake of prioritising the interests of external players while sidelining local interests, noting that inclusivity is key for Africa’s green hydrogen economy to realise its full potential.

• In an interview, the engineer whose research interests include green hydrogen production in the Global South recommends the creation of effective governance mechanisms that ensure all actors have a fair and equal ability to participate in decision-making processes.

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What is your take on Africa’s green hydrogen economy?

Maximilian Rischer: I believe many projects are still in a very early phase in Africa, and that reflects the broader global picture. There’s a lot of hope around hydrogen, that it can help with decarbonization and climate change mitigation. At the same time, it offers opportunities for economic development and for creating local value chains. I see a lot of potential, especially in East African countries. Of course, challenges exist, but I believe they can be overcome with the right approach.

Given the early stage and potential you mentioned, what do you see as the main challenges facing the green hydrogen sector in Africa, and how might they be addressed?

Maximilian Rischer: There are economic challenges, and the main one is that production costs for green hydrogen are currently very high. This creates a price gap between what it costs to produce and what buyers are willing or able to pay. Bridging this gap is essential to attract investment and ensure projects are bankable.

From an environmental point of view, and also from a social and sustainability perspective, it’s important to consider where the water used for hydrogen production comes from. Producing green hydrogen requires a significant amount of water. Beyond that, it must also be ensured that the energy source is genuinely renewable. And yes, stakeholder engagement is very important.

There are various challenges that are highly specific to local contexts. In some projects, the key question is: where does the land come from? In others, it’s more about water. If the project is in an area where water is not scarce, it may not be a major issue. But in water-scarce regions, it becomes a critical concern.

It is also challenging to balance the interests of the different actors involved, such as local communities, governments, the local economy, and also foreign capital. Those interests, economic, social, and environmental, all need to be balanced. It’s still early days, and I think effective governance mechanisms, and effective agency of all different actors, as equitable as possible, is paramount.

In your work as a researcher, have you conducted or been involved in any studies on green hydrogen development in specific African countries? If so, what insights have you gained?

Maximilian Rischer: Yes, I have researched the Namibian case, analysing its primary drivers, beneficiaries, and potential impacts on the environment and local communities, although that was before my current role at the institute.

Namibia is seen as a major opportunity and is considered one of the pioneers of green hydrogen in Africa, I would say. The potential to produce there is immense. But it's also important to take a holistic approach, to bring people along and engage stakeholders, not just globally, but equitably.

In other countries, from my experience, Kenya, for example, the current focus is on domestic production and consumption. A key priority is reducing fertilizer imports, which I think holds significant potential to generate direct local value here in Kenya.

From a sustainability perspective, what concerns do you have about how Africa’s green hydrogen sector is developing?

Maximilian Rischer: A strong concern from my side is that, when it comes to exporting hydrogen or its derivatives, local benefits are often not given equal importance or placed in the foreground compared to the interests of international purchasers or funders. In many cases, the focus tends to shift toward meeting external demand, sometimes at the expense of addressing local development needs or creating long-term value for host communities. This imbalance is a major challenge, especially if we want the green hydrogen sector to genuinely contribute to inclusive and sustainable development across the continent.

Let’s discuss certification. From your perspective, how well is Africa’s green hydrogen sector positioned when it comes to meeting international standards?

Maximilian Rischer: I don’t think we’ve seen many African-specific certification schemes emerge yet. And in the context of certification, it’s important to distinguish between hydrogen produced for export and hydrogen produced for domestic use. For exports, producers will have to comply with certification requirements set by the target markets, for example, the European Union has already outlined certain rules. These can be challenging, but they are achievable. When it comes to domestic use, it’s a different story. Governments may eventually establish their own certification frameworks, but as far as I know, none have been put in place yet.

Any final thoughts or reflections?

Maximilian Rischer: I would encourage everyone who wants to have a say in Africa’s green hydrogen economy to get involved. It’s still a very young sector, and developments are moving at a rapid pace. That’s why it’s important for groups like civil society to make use of the opportunities available — whether by raising concerns or actively contributing to and participating in projects.

At the same time, while it’s a major opportunity, a huge one, really, we can’t just let it unfold on its own. There need to be rules, or governance mechanisms, to guide its development in a way that addresses the key challenges and truly contributes to sustainable development.