The GCC countries see hydrogen as a key factor in fuel transition and have drawn up plans to export green hydrogen, green ammonia, and power fuels in the future.
The GCC countries believe that China in Asia and the European Union, which have committed to achieve net zero greenhouse gas emissions by 2060 and 2050 respectively, are potential markets for green Hydrogen.
These nations hope to grab the lion’s share in the US$300 billion market by exporting green fuels by 2050.
Present demand for the green Hydrogen is around 115 million tons (MTs) and it is expected to be more than 530 (MTs), displacing roughly 10.4 billion barrels equivalent of oil, by 2050. In the GCC, the demand is expected to shoot up to 50 MTs by that time.
One of the major advantages for the GCC countries is that they have plenty of space, sunshine and wind energy in some areas.
The UAE is the first country in the region committed to reduce emissions and cut it to by 24 percent by 2030 and to 50 percent by 2050. To achieve the objectives, Hydrogen is seen as crucial for the transition from oil and gas to cleaner fuels.
MENA’s Green Hydrogen projects
The UAE government has announced the US$14 million Green Hydrogen Project on an area of 10,000 sq m at the Outdoor Testing Facility of the DEWA Research and Development Centre in the Sheikh Mohammed bin Rashid Al Maktoum Solar Park near Dubai.
During the day, the plant harnesses some of the photovoltaic electricity from the Solar Park to produce green hydrogen using a technology called PEM electrolysis. At night, the green hydrogen is converted into electricity to power the city with sustainable energy.
Saudi Arabia too is setting up the world’s largest green hydrogen-based ammonia production facility at the city of NEOM costing around US$5 billion. This project is expected to produce 650 tons of carbon free hydrogen per day.
The Oman government is also establishing a US$2.5 billion green ammonia and hydrogen project at Duqm along with a green hydrogen plant powered by 25 GW of renewable energy.
“Green hydrogen has great potential not just as a fuel of the future, but as the foundation of an industry requiring new technology and a new generation of skilled employees,” Masdar CEO Mohamed Jameel Al Ramahi said. “The demonstrator plant we are building in Masdar City with our partners will go a long way to proving the commercial viability of green hydrogen.”
Egypt is planning to invest up to US$4 billion in a green hydrogen project through water electrolysis, Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker said.
Shaker said that an area of more than 7,000 sq. km has been allocated for renewable energy production projects in Egypt, from which it can produce about 90,000 megawatts (MW).
Qatar has already exported $521 million in Hydrogen, making it the 5th largest exporter of Hydrogen in the world in 2019. The main destinations of Hydrogen exports from Qatar are China ($161 million), Singapore ($56.2 million), Germany ($44.1 million), Japan ($38.4 million), and South Korea ($37.6 million).
Huge investments needed
Meanwhile, the London-based Energy Transitions Commission (ETC), in its report in April 2021, said that decarbonizing energy and other industries globally using hydrogen will require investment of almost US$15 trillion between now and 2050.
The Commission is an international coalition of executives from the energy industry committed to achieving net zero emissions by mid-century, a goal set by the Paris climate agreement in 2016.
It said that to reach a globally agreed goal of net zero emissions by 2050, every sector must be decarbonized and Hydrogen has a key role in decarbonizing the industries.
‘Producing green hydrogen will need zero-carbon electricity supply to increase by 30,000 terawatt hours (TWh) by 2050, on top of 90,000 TWh needed for decarbonization generally,” the Commission said.
This will require investment of around $15 trillion, peaking in the late 2030s at around $800 billion per annum, not just for hydrogen production but for the electricity system to support the massive increase in hydrogen use.
Around 85 percent of the required investment would be in power generation and 15 percent in electrolyzers, hydrogen production facilities and transport and storage infrastructure, the report said.