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Gulf Arab states to join global forces in hydrogen race

In recent years, hydrogen has gained popularity as a clean fuel with the potential to decarbonize difficult-to-decarbonize sectors including transportation (shipping and aircraft) and industrial (e.g., steel and chemicals).

Such success would go a long way toward meeting the ambitious worldwide target of keeping global warming below 1.5 degrees Celsius (above pre-industrial levels) by the end of the century, as set out in the 2015 Paris Agreement. According to projections from the International Energy Agency, the International Renewable Energy Agency, and the Hydrogen Council, hydrogen could meet up to 22% of global energy demand and 25% of total oil demand by 2050, another sign that fossil fuel assets could be devalued by mid-century, reducing revenue for fossil fuel exporters like the Gulf Arab states. Oil- and gas-producing Gulf Arab states recognize that joining global forces to accelerate the development and deployment of clean fuels, such as hydrogen, is a way to hedge against some global energy transition risks, despite not being major contributors to global greenhouse gas emissions except as exporters.

The United Arab Emirates, Oman, and Saudi Arabia are pioneers in the field of hydrogen

In the Gulf Arab states, the production of gray hydrogen, which is obtained from natural gas without carbon capture and storage, is not new. Gray hydrogen is produced from hydrocarbons and utilized as a feedstock in refineries, steel mills, and petrochemical plants to make ammonia, fertilizer, and methanol, as well as for oil refining and steel production. The Gulf nations have just lately begun to generate clean hydrogen, both green (made by electrolysis with power obtained from renewables) and blue (produced by splitting water using electrolysis with electricity derived from renewables) (produced from gas with carbon capture and storage). Given the availability and cheap costs of oil and gas resources, as well as renewables, the Gulf Arab states are ideally positioned to manufacture clean hydrogen. The Gulf Arab governments differ in their pace and magnitude of hydrogen development, just as they do with other renewables. The United Arab Emirates, Oman, and Saudi Arabia have been the most aggressive in their pursuit of clean hydrogen development and deployment. While Bahrain, Kuwait, and Qatar have expressed interest in hydrogen development, they have yet to catch up with their neighbors.

Emirates of the United Arab Emirates

Through its “Green Hydrogen” initiative, a cooperation between Siemens Energy and the Dubai Electricity and Water Authority, the UAE was the first country in the area to manufacture clean hydrogen using solar power. The Mohammed bin Rashid Al Maktoum Solar Park’s testing facility was created to highlight the UAE’s hydrogen potential during EXPO 2020 Dubai. Masdar, Abu Dhabi’s renewable energy firm, is spearheading research for a new electrolysis plant to create hydrogen for the transportation industry, in collaboration with Siemens Energy, the Abu Dhabi Department of Energy, Etihad Airways, Lufthansa, Marubeni Corporation, and Khalifa University. The group wants to test green hydrogen for road transportation first, then build a kerosene synthesis facility to turn the bulk of the hydrogen into environmentally friendly aviation fuel. The program’s second phase will look at manufacturing hydrogen for use as a marine fuel. Mubadala Investment Company and Snam also inked a memorandum of agreement in March 2021 to engage on joint hydrogen investment and development activities. Furthermore, at the TA’ZIZ Industrial Chemicals Zone, the Abu Dhabi National Oil Company is establishing a large-scale low-carbon ammonia manufacturing facility and is looking into commercializing the product.


Since 2020, Oman has launched a number of large-scale hydrogen-related projects, using significant solar and wind resources as well as the newly formed Duqm port and free economic zone as an exporting center. The first project to build a large-scale electrolysis plant in Oman was announced in 2020, in the Special Economic Zone of Duqm. The “Hyport Duqm” green hydrogen project is a collaboration between Concessions (DEME) of Belgium and OQ Alternative Energy, an Omani state-owned oil and gas business, in collaboration with the Public Authority for Special Economic Zones and Free Zones. The first phase is planned to be finished in 2026, and the plant’s total production capacity is estimated to be 1 million metric tons of green ammonia per year once completed.

The Oman Company for the Development of the Special Economic Zone at Duqm, or Tatweer, and ACME Group signed a memorandum of agreement in March 2021 to build a large-scale plant in the Special Economic Zone at Duqm to manufacture green hydrogen and green ammonia. The factory will manufacture 2,400 tons of green ammonia per day using solar and wind energy. In October 2021, OQ, Marubeni Corporation (a Japanese integrated trade and investment business conglomerate), Linde, and Dutco, an Emirati construction firm, launched the “SalalaH2” project, which will use OQ’s current ammonia factory in Salalah. The project is set to begin operations in 2023, with a goal of producing up to 1,000 tons of green ammonia per day, which is simpler to store and transport than hydrogen and can be transformed into green hydrogen at a later date. Green ammonia will be used in OQ’s current ammonia factory in Salalah.

There’s also talk about exporting green ammonia for applications like co-firing coal-fired power plants in Asia, supplying feedstock for fertilizer factories in Europe, and satisfying the global shipping industry’s decarbonization demands.

In May 2021, an international consortium of companies, including OQ, InterContinental Energy, a Hong Kong-based renewable hydrogen developer, and Enertech, a Kuwait-based energy investor, announced plans to build one of the region’s largest hydrogen projects, powered by 25 GW of wind and solar energy. While still in the feasibility study stage, the building is expected to begin in 2028 and be completed by 2038.


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