Why Germany is turning to Algeria for Europe's hydrogen future
Two agreements signed in Algiers last week mark the latest step in a relationship that has grown steadily in recent years.
One will help modernise Algeria's electricity grid so it can integrate more renewable energy. The other aims to develop green hydrogen projects and reduce methane emissions.
Together, they reflect Germany's search for future low-emission energy supplies and Algeria's ambition to diversify its energy production.
The first deal launched DigiEnR, a German-funded project to modernise Algeria's electricity grid as the country expands renewable energy. The project will digitalise the network and make it easier to connect new energy systems.
"The industrial and technical partnership between Algiers and Berlin has entered a new era," Algeria's Energy Ministry said in a statement after the agreement was signed on 15 June.
The second deal brought together Algeria's state-owned energy company Sonatrach and German energy company VNG AG.
It expands an earlier partnership on green hydrogen and broadens it to include efforts to reduce methane emissions and explore future hydrogen supplies to Europe.
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Beyond natural gas
One goal is to find out whether Algeria could become a future supplier of green hydrogen to Europe, particularly Germany. The companies will study how the fuel could be produced, delivered and eventually carried through parts of Algeria's existing gas infrastructure.
For VNG, Algeria's potential makes it an important long-term partner.
"The demand for low-emission energy sources in Germany and Europe is steadily increasing," VNG board member Hans-Joachim Polk said. "Europe will continue to rely heavily on imports. Algeria offers significant long-term potential."
Sonatrach said the renewed partnership reflected both companies' shared commitment to addressing the challenges facing the energy sector.
"We intend to build upon our previous successes and explore new synergies in the production and transportation of green hydrogen and its derivatives, as well as in reducing methane emissions."
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Why hydrogen matters
Hydrogen has become a central part of Europe's plan to reduce emissions from industries that are difficult to run on electricity alone, including steel and chemicals.
Green hydrogen is made using electricity from renewable sources to separate hydrogen from water. European governments hope it can help industries lower emissions while supporting the shift away from fossil fuels.
The EU also sees renewable hydrogen as one way to reduce dependence on imported fossil fuels. In May, the European Commission approved a €1.3 billion German support scheme to boost renewable hydrogen production through the European Hydrogen Bank.
The programme forms part of the EU's Hydrogen Strategy and its REPowerEU plan, which aims to reduce dependence on Russian fossil fuels while strengthening Europe's energy security.
Algeria is also expected to play a role beyond its partnership with Germany. Since 2024, it has worked with several European countries on the SoutH2 Corridor, a planned 3,300-kilometre pipeline designed to transport green hydrogen from North Africa to Europe.
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The hydrogen industry has expanded across Europe in 2026, with new projects announced in several countries. But many projects still face high costs, uncertain demand and the need for new infrastructure.
Germany and Algeria have steadily expanded their cooperation in recent years. Last year's first German-Algerian investment summit produced agreements covering industry and digital technology.
The two countries are expected to deepen those ties further during Algerian President Abdelmajid Tebboune's first state visit to Germany in mid-July.