European countries are extracting renewable energy from Morocco and Egypt to “greenwash” their own economies, while leaving north Africans reliant on dirty imported fuels and paying the environmental costs, a Greenpeace report says.

Both Morocco and Egypt are aiming to leverage their strategic locations south of the Mediterranean, and their solar and wind power potential, to position themselves as pivotal to Europe’s quest to diversify its energy supply.

Greenpeace’s report argues that European-backed renewable and lower-carbon projects producing energy for export are hampering the two countries’ ability to decarbonise their own economies, displacing local populations and consuming millions of litres of fresh water, in some cases in environments where it was already scarce.

At the same time, both Egypt and Morocco also remain net importers of fossil fuel energy, buying in large quantities of oil and gas to fuel their own economies, while selling their cleaner energy to Europe, according to the report.

After the outbreak of war between Ukraine and Russia, European energy companies ploughed billions in investment into Egypt to access the country’s gas reserves, as they sought alternatives to the 80bn cubic metres (2.8tn cubic feet) of Russian gas suddenly taken off the market.

But disruption to geological formations due to overdrilling by gas and oil companies has led to soil erosion and contamination, polluting the water supply, Greenpeace says, arguing that Egyptians have scarcely benefited.

Now, the report says, Egypt “is increasing its domestic use of dirty fuels such as mazut – a blend of heavy hydrocarbons containing toxins like sulphides and heavy metals – with a view to freeing up more gas for export to Europe.”

But, according to one international thinktank, Egypt will need international investment if it is to build the infrastructure and industry that it needs in order to scale up its renewable sector rapidly. The Atlantic Council argues: “With smart, forward-looking policies and strategic investments from the Egyptian government, combined with robust international partnerships, Egypt can become a global clean energy hub.”

In Morocco, TotalEnergies has invested $10.6bn (£8.4bn) in a green hydrogen and ammonia plant in Guelmim-Oued Noun, with production starting in 2027, and Germany has also committed up to €300m (£250m) for green hydrogen facilities, with both projects aimed at export markets.

Hanen Keskes, the campaigns lead at Greenpeace Middle East and North Africa, said: “The global north must take responsibility for reducing its own consumption and building domestic renewable capacity, instead of externalising socio-environmental costs to the global south. We must continue to fight to decolonise and transform the global financial architecture.”