Nigeria possesses significant potential to develop a green hydrogen (GH₂) sector, which could contribute to industrial development, economic diversification, employment generation, and enhanced energy security. Despite these opportunities, progress remains limited due to persiste
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Nigeria possesses significant potential to develop a green hydrogen (GH₂) sector, which could contribute to industrial development, economic diversification, employment generation, and enhanced energy security. Despite these opportunities, progress remains limited due to persistent and interconnected socio-technical barriers. This study examines how Nigeria can enable the development of a viable GH₂ sector as part of its broader energy transition.
The research is guided by three questions: (1) what roles actors and institutional structures play in GH₂ development; (2) which barriers and drivers shape this development; and (3) which development pathway is most plausible given these dynamics. To address these questions, the study applies the Multi-Level Perspective (MLP), complemented by actor analysis and a comparative scenario analysis of four hydrogen economy models. This integrated framework enables a systemic assessment of interactions between landscape pressures, regime structures, and niche developments.
The analysis identifies key barriers and drivers across system levels using data from academic literature, policy documents, sector reports, and expert interviews. At the landscape level, global decarbonisation commitments, rising international hydrogen demand, and oil price volatility create incentives for diversification. However, at the regime level, fossil fuel dependence, institutional fragmentation, regulatory gaps, and weak investment incentives reinforce the existing energy system and constrain transformation. At the niche level, high production costs, limited access to finance, infrastructure deficits, and the absence of long-term offtake agreements hinder scaling beyond pilot projects. Although drivers such as abundant renewable resources and energy security concerns exist, their impact is limited by weak alignment across system levels.
The scenario analysis evaluates four hydrogen economy models and identifies a coordinated industrial pathway as the most viable trajectory. In this pathway, exports serve as an entry point but are embedded within a broader industrial development strategy. GH₂ production is linked to downstream sectors such as fertiliser, steel, and chemicals, enabling domestic value creation while leveraging export revenues. Without such coordination, GH₂ risks remaining an enclave export activity with limited structural impact.
The study concludes that GH₂ can play a meaningful role in Nigeria’s energy transition if supported by targeted and coherent policy measures. Key recommendations include the development of a comprehensive national hydrogen strategy to provide regulatory clarity and institutional alignment; the integration of GH₂ into existing industrial value chains, particularly fertiliser production; and the implementation of industrial upgrading mechanisms, such as local content requirements and technology transfer provisions in export agreements. Furthermore, workforce development through education, training, and regional collaboration is essential to build local capacity. Finally, targeted financial instruments, including blended finance and risk-sharing mechanisms, are necessary to improve project bankability and enable the transition from pilot projects to a commercially viable GH₂ sector.