Gulf countries bet on green hydrogen as "fuel for the future"

After reaping immense profits from fossil fuels for decades, Gulf countries are now focusing their attention on green hydrogen as part of their declared aim to make their economies environmentally friendly.

Saudi Arabia, the United Arab Emirates (UAE), and Oman are heavily investing in this fuel as they search for alternative revenue sources to oil and gas.

Karim Al-Jundi, an expert from the London-based Chatham House institute, stated, "Gulf countries aspire to lead the global hydrogen market."

He added to Agence France-Presse (AFP), "They see green hydrogen as crucial because it allows them to remain major players in the energy field and retain influence as demand for fossil fuels declines."

Unlike hydrogen produced from polluting fossil fuels, which is still widely used, green hydrogen is produced from water using renewable energies like wind, solar, and hydroelectric power.

However, this clean fuel, which currently accounts for less than 1% of total hydrogen production, is not yet commercially viable and requires a massive increase in renewable energy sources, a process that may take years.

While fossil fuels produce greenhouse gases, green hydrogen emits only water vapor. It is being promoted for use in heavily polluting sectors such as transportation, shipping, and steel production.

With its substantial investment capital, Saudi Arabia, the world's largest oil exporter, is constructing the world's largest green hydrogen production plant in the futuristic city of Neom in the northwest of the kingdom. The cost of the project, to be completed by the end of 2026, is estimated at $500 billion.

The facility, with a price tag of $8.4 billion, will utilize wind and solar energy to produce up to 600 tons of green hydrogen per day, according to authorities.

In July, the UAE, set to host the United Nations Climate Change Conference (COP28) later this year, approved a hydrogen strategy aiming to produce 1.4 million metric tons of hydrogen annually by 2031, making it one of the world's top ten hydrogen producers.

Hanane Balala, Deputy CEO of the UAE oil giant ADNOC, sees hydrogen as a fundamental fuel for transitioning to clean energy, describing it as a "natural extension" of the company.

She told AFP, "The UAE is well-positioned to benefit from it."

However, Oman, which lags behind its neighbors in fossil fuel production, seems ready to lead the clean hydrogen race in the Gulf. By the end of this decade, it is set to become the sixth-largest green hydrogen exporter globally and the largest in the Middle East, according to a report by the International Energy Agency published in June.

Oman aims to produce at least one million tons of green hydrogen annually by 2030 and up to 8.5 million tons by 2050, "larger than the total current hydrogen demand in Europe," according to the agency.

According to the giant financial auditing firm Deloitte, Middle Eastern countries, particularly Gulf countries, will dominate the global hydrogen trade in the short term by exporting half of their local production by 2030.

By 2050, North African and Australian nations are expected to become the most capable producers, although Gulf countries will remain "export pioneers," according to a report by the company released in June.



AFP