Executive Summary
Energy-security shocks, supply-chain concerns and industrial competition are strengthening the case for EU-Mediterranean green industrial cooperation. Yet the same pressures also drive more protective European industrial policies that can complicate market access and investment in deeper industrial integration.
This paper examines Egypt, Morocco and Türkiye, showing how renewable energy resources, existing industries and ties to European markets create different opportunities to decarbonise production and develop clean-technology manufacturing. Together, they illustrate three distinct, overlapping pathways: decarbonising energy-intensive production, building clean-tech manufacturing around existing industrial ecosystems, and upgrading an established export-oriented manufacturing base.
Egypt’s opportunities extend beyond hydrogen exports to decarbonising existing production and developing new manufacturing. Its fertiliser, iron and steel, aluminium and petrochemical industries provide potential domestic demand for renewable electricity and low-carbon hydrogen. Early projects demonstrate this potential. Yet more than 30 hydrogen-related memoranda of understanding have produced few final investment decisions. Limited long-term offtake, high financing and foreign-exchange costs, and infrastructure uncertainty reinforce one another. European market access could reward cleaner production, but returns depend on European market-creation.
Morocco is building green industrial opportunities around its fertiliser and automotive clusters. OCP’s role as a developer, buyer and end user provides a domestic demand anchor and could reduce revenue uncertainty. Yet viability depends on competitiveness with grey ammonia, while scale depends on export markets. Combining local capabilities, European manufacturing networks and Chinese technology and capital could support emerging battery manufacturing and competitive sourcing for European carmakers. However, European concerns over Chinese subsidies and tariff circumvention could expose Moroccan exports to greater EU trade-defence measures. Preferential trade status does not guarantee access to future EU public procurement and support markets.
Türkiye’s transition centres on upgrading a large industrial base deeply integrated into European value chains. CBAM has made decarbonisation a competitiveness and market-access issue, while an effective domestic emissions trading system could support industrial upgrading. Yet tighter European steel quotas risk undermining the export revenues needed to finance decarbonisation, weakening CBAM’s incentives. New financing initiatives support this transition, but do not themselves constitute a comprehensive green industrial partnership.
Across the three cases, early projects, growing battery and electric-vehicle investment, more proactive industrial policies and an emerging financing architecture show progress. Yet these remain selective advances rather than a regional commercial breakthrough. Announcements outpace investment decisions, while early demonstrations often lack a dependable route to scale. European carbon pricing and public finance can strengthen the investment case, but tighter trade protection, European-preference requirements (e.g. for inverters and renewable energy tech) and uncertain demand can weaken the revenue expectations on which investments depend. Blended finance and subsidised procurement can establish early markets, but cannot substitute for dependable long-term revenues.
Emerging initiatives such as T-MED offer a platform to link regulatory cooperation with European investment and industrial participation. Their success will depend on connecting finance for production and infrastructure with credible demand, predictable market access and EU trade and industrial policies that support these partnerships. Domestic policy choices remain equally important in translating renewable resources and industrial capabilities into competitive production and greater local value creation.
About the authors
Alfonso Medinilla is the head of ECDPM’s climate action and green transition team.
Mohammed El Maziani Haddouchi is a research assistant in ECDPM’s African economic integration team.
Dr Hanne Knaepen is the head of ECDPM’s climate action and green transition team.