In order to limit the global temperature, rise below 2°C (ideally to 1.5°C) compared to pre-industrial levels by 2100 as set out in the Paris Agreement, more than 70 countries, including the biggest polluters – China, the United States of America (USA), and the European Union (EU) – have set a Net Zero emission target, covering about 76% of global greenhouse gas (GHG) emissions (UN, 2022). This ambitious target requires a rapid transformation of the energy sector by shifting away from the consumption of fossil fuels towards cleaner and renewable energy (RE) sources. This has led to different innovations, interventions and research on different technologies that will help the world achieve this. .

Hydrogen gas is increasing been seen as another potential huge alternative energy sources. It is conventional and renewable in output as the clarification into blue, grey, Green and tousle hydrogen. Green hydrogen made from renewables could store energy seasonally, so solar power that’s generated during the summer could later be used in. This vital quality marks it out as an alternate source of energy.

Increasing Green hydrogen and other form of hydrogen gas has been generating a lot of interest globally but is yet to be fully embraced by the Nigeria government. As a result of some peculiar needs.

Global hydrogen use reached 95 Mt in 2022, a nearly 3% increase year-on-year, with strong growth in all major consuming regions except Europe.

2.0 Needs for h2 development in Nigeria

As the world moves toward a carbon-neutral economy, GH2/PtX are increasingly becoming trading common

b.) Oil and gas will generate less value for the Nigerian (export) economy than a well-developed hydrogen market.

GH2/PtX can fill part of the gap and provide for economic diversification in other industries that needs big power consumption.
The expansion of RE for the production of GH2 can accelerate electrification and grid expansion.
To help tackle the issue of energy access.
The transition to a (green) hydrogen economy leads to new job potentials, where these could potentially be eliminated (e.g., in the oil and gas industry) due to decreasing global demand of fossil fuels.
Hydrogen production will create local value and chains that promote self-consumption, e.g., in the fertilize and heavy industries

Nigeria’s fossil energy resources and their utilization rates

s/n	S/N RESOURCES RESERVES	PRODUCTION DOMESTIC	UTILIZATION
1	Crude Oil 37.2 billion barrels	0.774 billion barrels	0.098 billion barrels @ 4.9% capacity utilization (2015)
2	Natural Gas 203.45 trillion standard cubic foot (scf) )	2.9 trillion scf (2015)	88% utilized (2015) and 12% flared (2015
3	Coal and lignite	2.734 billion tons	0 Negligible
4	18.25 billion barrels (2014 Tar sands 0	0	31 billion barrels of oil equivalent

2.0 Problem Statement.

This policy brief aims to support the already existing initiatives and interventions by some stakeholders to integrate the hydrogen gas into the energy mainstream in Nigeria in terms of policy framework, environmental sustainability and energy mix towards bridging the energy gap, diversification of our economy and capitalization of the huge potential in the energy market

2.1 Key Energy Laws, Policies and Strategies in Nigeria.

There are some key energy laws , policies and strategies .These include National Energy Policy (NEP) 2022, National Energy Masterplan (NEMP) – 2022, Nigeria Energy Transition Plan (ETP) – 2022, Nigeria Energy Transition Plan (ETP) – 2022, Nigeria Renewable Energy Masterplan (REMP) – 2005 (Revised 2012), National Gas Policy (NGP) – 2017 , petroleum Industry Act (PIA) – 2021 ,Electric Power Sector Reform Act (EPSRA) – 2005, Climate Change Act (CCA) – 2022, Nigeria Sustainable Energy for All Action Agenda (SE4ALL) – 2016 ,he Nigerian Electricity Management Service Agency Act (NEMSA) – 2015 ,The Nigeria Electricity Bill.

The Federal Government of Nigeria (FGN) has launched the country’s Energy Transition Plan (ETP), which is the basis for Nigeria’s commitment to net zero emission economy by 2060. In recognition of the key role that RE and H2 will play in its carbon neutrality, Nigeria is putting down plans to fully develop and exploit its vast RE resources and H2 opportunities. Nigeria’s plans for RE includes fully utilizing its water, solar, wind and biomass resources and other resources, and H2 production and usages. The introduction of H2 in Nigeria’s economy presents the country with an alternative energy export product and can help Nigeria remain a global player in the future energy market.

To this end, Nigeria has put in place a number of key policies and plans, which have laid down pathways, and have provided action plans for the integration of RE in the energy mix of Nigeria. Some of these policies and plans are the:

• National Energy Policy (NEP), approved in 2022,
• National Energy Master Plan (NEMP), approved in 2022,
• Sustainable Energy for All (SE4ALL) Action Plans, approved in 2016,
• Nigeria’s Energy Transition Plan (ETP) launched in 2022, and
• Nigeria Electricity Bill (which is awaiting presidential assent).

Of these policies and plans, only the NEP, the NEMP and the ETP make some provisions for H2 forming part of Nigeria’s energy mix. These provisions however, as will be presented in ensuing sections, are not sufficient to provide the right policy and regulatory framework to aid the development of H2 across the H2 value chain (production, transportation, storage, and utilization). Interestingly, the National Gas Policy (NGP) and the Petroleum Industry Act (PIA) 2021 (both being instruments of the FGN outlining the plans and laws that will enable Nigeria to fully develop the gas sector) do not recognize and acknowledge the relationship between gas and H2. Hence none of these two instruments of the FGN makes provisions for the development of H2. The FGN can however still address this by promulgating relevant H2 regulations pursuant to the PIA, i.e., provisions for the production of blue and turquoise H2 and regulation of the blue/turquoise H2 value chain, as well as provisions for the storage and transportation of GH2 (by blending of GH2 in natural gas pipelines). In order to create an enabling policy and regulatory framework for H2 and PtX, the FGN needs to develop and approve a stand-alone policy for H2, which will lay down more detailed plans, strategies, and implementation pathways for H2 across its value chain.

milestones	2022	2030	2035	2050
Total hydrogen demand	95	150	215	430
Refining (Mt H₂)	42	35	26	10
Industry (Mt H₂)	53	71	92	139
Transport (Mt H₂-eq, including hydrogen-based fuels)	0	16	40	193
Power generation (Mt H₂-eq, including hydrogen-based fuels)	0	22	48	74
Other (Mt H₂)	0	6	10	14
Share of total electricity generation	0%	1%	1%	1%
Low-emissions hydrogen production (Mt H₂)	1	70	150	420
From low-emissions electricity	0	51	116	327
From fossil fuels with CCUS	1	18	34	89
Cumulative installed electrolysis capacity (GW electric input)	1	590	1 340	3 300
Cumulative CO₂ storage for hydrogen production (Mt CO₂)	11	215	410	1 050
Hydrogen pipelines (km)	5 000	19 000	44 000	209 000
Underground hydrogen storage capacity (TWh)	0.5	70	240	1 200

Announced cumulative electrolyser manufacturing capacity output, if fully realized, would be 80% of the NZE level in 2030 :

3.0 International experience

Namibia: Namibia published its “Green Hydrogen and Derivatives Strategy” in November 2022, becoming the first nation with a H2 strategy on the continent. The elaboration of the strategy was coordinated by Namibia’s Green Hydrogen Council with support from an Inter-ministerial Green Hydrogen Technical Committee and Namibia Green Hydrogen association (grouping key GH2/PtX private sector actors). Namibia anticipates a production at 10-12 Mt H2 per year by 2050, most of which will be for export. Namibia plans to launch an infrastructure fund that will initially mobilize USD 1 billion in concessionary and commercial capital

3.1 South Africa

South Africa’s GH2/PtX is reflected in its draft Green Hydrogen Commercialization Strategy (GHCS) The strategy was developed by a Panel consisting of private and public sector champions in the GH2 value Chain. The GHCS was released to the public for comments in December 2022 Currently the GHCS is being updated based on received comments. The draft GHCS anticipates an installed electrolyze capacity of 41 GW by 2050, producing around 3.8 Mtm H2 per year (50% for export and 50% for domestic consumption) The GHCS will be implemented as part of South Africa’s Just Energy Transition (JET.

3.2 Germany.

Germany published its National H2 strategy in 2020 The strategy includes a EUR 9 billion funding Programme (EUR 7 billion in Germany and EUR 2 billion abroad) The strategy provides for a coherent framework and contains 38 concrete measures. The Strategy’s initial target of GH2 installation capacity of 5 GW by 2030 is now raised to 10 GW.H2 demand is estimated at 90 to 110 TWh (130 TWh according to recent estimates) by 2030 Imports to meet most 50%-70% in 2030 and 55%-95% in 2050 Germany has also launched the H2Global Programme tom create business cases and investment security through a financial compensation with a solvent contract partner in analogy to a contract for difference (CfD) mechanism.

4.0 Present & future of h2 applications in Nigeria
PRESENT APPLICATIONS: Grey H2 is being produced and used by the Oil and Gas companies for oil refining, and by industry to produce ammonia and important ingredient for fertilizer ;
Future applications
The ETP makes provisions for the future application of H2 in the following sectors.
Power Sector: H2 comes into play in Nigeria’s energy mix by 2040 amounting for 9GW of centralized production capacity, and 5GW in centralized electrolyser capacity. And, growing to 34GW of production capacity and 22GW in electrolyser capacity by 2050.
Industrial Sector: Blue H2 is used to replace grey H2 in ammonia production at a rate of 33% by 2030 and 65% by 2060, while GH2 is used to replace 35% of grey H2 requirements in 2060 H2 furnaces are introduced into industrial processes for industrial heat generation by 2060, contributing 38 PJ (~10.6 TWh) of heat generated

5 .0 Current status
Nigeria seems to be thinking towards Hygrogen although not much action has been seen in Nigeria with regards to H2 investments and projects. This notwithstanding, GH2 and blue H2 are poised to play a key role in Nigeria’s plan to become a carbon-neutral economy by 2060, as set out in Nigeria’s ETP and LT Leads. The introduction of H2 in Nigeria’s economy is meant to increase energy generation and decarbonize the energy sector. It will also present the country with an alternative
export .

Nigeria’s RE resource potential and their utilization levels

S/N	RESOURCES	Potential	UTILIZATION level
1	Large hydro	24,000 MW	1,900 MW
2	Small hydro	3,500 MW	64 MW
3	Solar PV	3.5 – 7.0 kWh/m²/day	30 MW solar PV stand-alone
4	Wind	2-4m/s at10 m height	10 MW wind farm in Katsina
5	Fuel Wood	13,071,464 Hectares	43.4 million tons of firewood/year
6	Municipal waste	30 million tons/year	No data
7	Animal waste	61 million tons/year	No data
8	Crop residues	83 million tons/year	28.2 million hectares of arable land, only 8.5% cultivated

6.0 . Needs for hydrogen development in Nigeria.

Notwithstanding these policy statements, strategies, development, and action plans for H2 contained in the various policies and plans outlined, Nigeria does not have a standalone policy for H2. There is also no primary legislation (Act) or secondary legislation (regulations) on H2 currently in force in Nigeria. There is also no specific institution currently charged with the responsibility of actioning out these H2 strategies and plans which resulted in limited progress towards these goals. However, it should be noted that the oil and gas sector currently generate grey H2, and has l77the capacity to generate blue H2, but Nigeria lacks the right infrastructure for proper carbon capture and storage (CCS), as well as for transportation and distribution of H2.

7.0 Power sector regulation and operations

Currently Nigeria’s grid can only absorb 1GW of electricity from RE sources. The EPSRA does not make any provisions for H2. The Nigeria Electricity act also does not make provisions for H2. The RE provisions in the bill provide a platform for the promulgation of relevant regulations that can be extended to GH2

7.1 Gas sector and gas pipeline regulation

The existing regulations: PIA, the Oil Pipeline Act, and the Oil & Gas Pipeline Regulations do not contain any provisions on H2. No clear indication on the processing, transmission, supply, transportation, sale and storage of H2. The integration of H2 into the gas sector and gas pipeline is necessary to allow the integration of H2 into the national economy:

Technical Knowledge and Skills .GH2 and blue H2 are still novel technologies in Nigeria, education, capacity development and training programs are required to ensure the right human resources are available Currently no GH2 and blue H2 technologies and applications are integrated in depth in higher education, technical, vocational and R&D programs in Nigeria.

There is also a lack of awareness on H2 in Nigeria, Power and gas infrastructure capacity & readiness. The national power grid and transmission infrastructure is not sufficient to wheel electricity for GH2 production facilities. Similarly, gas pipelines are required to transport H2 from its production facilities to demand centers or to export ports, It is not clear if the existing gas pipelines have the capacity to transport GH.

8.0 Technology Readiness

The ETP anticipates that green and blue H2 will play a key role in achieving Nigeria’s net-zero emission target to achieve this target of the ETP the right technology must be in place Electrolysis and improved RE infrastructure are required and must be put in place Electrolyze technology for GH2 is currently not available in Nigeria, neither are investments being channeled towards it. For blue H2 currently there are no carbon capture, utilization and storage (CCUS) technologies available in Nigeria, and its not clear if investments are being made or planned but we should aim to create investment scenarios for that.

9.0 Market and financial challenges

Information on project and funding opportunities is necessary for national and international project developers to make investment decisions. Currently there are no fiscal incentives to encourage private sector participation in H2 development in Nigeria. Incentives such as pioneer status, tax waivers, tax reductions, grants, low-interest loans, import duty waivers, are currently not available for H2 in Nigeria.

10. 0 Security and Safety Standards for H2 handling and use.H2 and its derivatives present certain health and safety risks when used on a large scale. H2 transportation and distribution also pose specific issues in terms of safety due to the chemical and physical properties of H2. From the research and gap analysis carried out, it’s not clear if there are any security and safety standards for handling and use of H2, Nigeria can cooperate and partner with countries that have developed such standards, to acquire necessary standards and protocols and avoid investing more time in elaborating new ones:

11.0 Policy Options: Present various policy options or solutions for addressing the policy problem, such as incentives for green hydrogen production or the development of hydrogen hubs.

11.1 Policy frameworks

1 Establish a national H2 political leadership with some influential individuals.

2 Harmonies national energy planning documents and provide rooms for innovation and adaptation of emerging technologies.

3 Develop a stand-alone H2 policy.

12.0 Recommended actions for roadmap development

12.1 Regulatory frameworks

4 Create a responsive H2 regulatory framework

5 Elaborate a wheeling framework and define separate wheeling charges for H2 projects

6 Elaborate/adopt standards for H2 blending with natural gas Infrastructure

7 Develop power transmission infrastructure.

12.2 Market development

8 Establish an electricity balancing market mechanism

9 Initially focus on H2 export to develop the market

10 Promote carbon tax and carbon finance and mainstream it into our financial management

11 Create H2 valleys and Special Economic Zones

12.3 Capacity building

12 Strengthen the capacity of key stakeholders

13 Introduce H2 into the national education, R&D, and training

14 Develop a national awareness campaign on H2 technologies

12.4 Just transition

15 Ensure a “just transition and general acceptance by a massive stakeholder’s sensitization.

13.0 Conclusion:

The deployment of hydrogen gas in Nigeria will go a long way in decentralizing our energy sources, increase our revenue for the government, tackling of energy poverty and access and providing the required energy to industrialized the economy. It will be in the country interest to ensure that the regulatory framework, policy framework and other business enabling structures are encouraged. As an emerging energy source with variants that are obtainable in large quantity and can be developed in industrial scale, hydrogen deployment and development should be given a priority and enabling environment to scale, In all, all stakeholders should consulted and carried along in ensuring the Nigeria maximined the potential of hydrogen weather green or blue hydrogen.

Reference:

IEA (2023), Global hydrogen production by technology in the Net Zero Scenario, 2019-2030, IEA, Paris https://www.iea.org/data-and-statistics/charts/global-hydrogen-production-by-technology-in-the-net-zero-scenario-2019-2030-3, License: CC BY 4.0.

Diplo Hydrogen Diplomacy (2023 )Policy and regulation framework for hydrogen in Nigeria H2

Synthesis Report: Study on the policy and regulation framework for the build-up of a hydrogen market in Nigeria.

Bloomberg. (2022, March 17). audi Arabia to Start Building Green Hydrogen Plant in Neom. Retrieved from https://www.bloomberg.com/news/articles/2022-03-17/saudi-arabia-to-start-building-green-hydrogen-plant-in-neom?leadSource=uverify%20wall

FGN. (2022). Nigeria Energy Transition Plan. Retrieved from Nigeria’s pathway to achieve carbon neutrality by 2060: https://www.energytransition.gov.ng/#Key

EA. (2021). Global Hydrogen Review 2021. Paris: International Energy Agency.

IEA. (2022). Key energy statistics, 2019. Retrieved from https://www.iea.org/countries/nigeria

IRENA. (2020). Green Hydrogen: A guide to policy making. Abu Dhabi: International Renewable Energy Agency.

IRENA. (2022)

Policy Brief : Hydrogen Gas: Green Hydrogen Extending the energy mix in Nigeria

1.1 Introduction