Middle East Shift Towards Green Hydrogen
The Middle East is uniquely positioned to become a frontrunner in low-carbon hydrogen economy and a major exporter to European and North-East Asian countries.
To achieve net-zero emissions by 2050, the production of emissions-free fuels like green ammonia and green hydrogen is gaining momentum in the region. Hydrogen is an indispensable building block for transition from climate-destroying fossil fuels to sustainable models based on 100% renewable energies. Many industries will clearly need vast amounts of clean hydrogen to reach net zero in time.
The global total of active and pipeline capacity of low-carbon hydrogen projects now exceeds 200 million metric tonnes (mt) per annum. Worldwide, demand for clean hydrogen could grow to 660 million mt annually by 2050, according to research by McKinsey & Company. This capacity could potentially fulfill over 20% of global energy needs.
The Middle East, with its abundant renewable (solar and/or wind) and natural gas resources to produce low-carbon hydrogen, and with costs dropping significantly could well capitalize on the global shift towards clean hydrogen. Not only does it possess the potential for scalable green hydrogen production, but also it enables hydrogen exports for overseas markets to meet burgeoning demand. The region is forecast to produce 18.15 million mt hydrogen by 2030, exporting 1 million mt of mostly low carbon and renewable hydrogen.
The Middle East have some of the world’s most ambitious hydrogen production projects.
The UAE, aims to produce 1.4 million tons a year (tpy) of green and blue hydrogen by 2031 and expects the figure to increase tenfold to 15 million tpy by 2050. The country previously said it was eyeing a 25% global market share of low-carbon hydrogen by 2030.
The Abu Dhabi state-owned renewable energy firm, Masdar, is targeting up to 1 million tons of green hydrogen production per year by 2030. The Engie/Masdar Ruwais Green Hydrogen Plant in Abu Dhabi is set to be operational by 2025. The two companies are looking to develop projects with a capacity of at least 2 GW by 2030, with a total investment in the region of $5bn.
Like the UAE, Saudi Arabia is targeting green and blue hydrogen production of 2.9 million tpy by 2030 and 4 million tpy by 2035. The $500bn NEOM project includes plans for a clean industrial hub called Oxagon, featuring the “world’s largest green hydrogen facility” at a cost of $8.4bn.
Oman aims to become a major green hydrogen producer and exporter by harnessing its ample solar and wind resources. Oman OQ’s strategic investments in green hydrogen projects – valued at around $40bn – powered by around 30 GW of renewable capacity will account for a sizable proportion of Oman’s targeted annual production of 1mn-1.25 million tpy of green hydrogen by 2030. The country is targeting to produce 8 million tpy of green hydrogen by 2050 with an estimated investment of $140bn. This goal would achieve revenue of about $20bn-22bn, which is roughly equivalent to the country’s current revenue from oil and gas.
As for Qatar, there are plans to build the world’s largest blue ammonia plant and bring it online by 2026. The $1bn facility would produce up to 1.2 million tpy of blue ammonia, a fuel that can be shipped and converted into hydrogen by countries looking to reduce their carbon emissions.
Kuwait has announced masterplan that entails production of 17 GW of renewables and 25 GW of green hydrogen by 2050. The renewable power capability will be linked to the production of green hydrogen for internal industrial use, as well as for export purposes.
Elsewhere in the region, Egypt aspires to produce 5.8 million tpy of green hydrogen by 2040, capitalizing on an estimated 72 GW, of solar and wind electricity, whereas Iraq has signed a deal with TotalEnergies to develop a pilot hydrogen project.
Electrolyzers, which are powered by renewable electricity, are a key component of green hydrogen systems. Improving electrolyzer technologies could make "green" hydrogen cost competitive by 2030. By 2040, the Middle East and North Africa region’s hydrogen electrolyzer capacity is expected to be the second largest worldwide, accounting for 20%, or 59.8 GW of the 300 GW projected installed global capacity, according to data from Norwegian consultancy Rystad Energy.
Prospects remain bright in the region, with many green hydrogen projects in the pipeline and which could increase significantly over the next 10 years.
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