Analysis Energy GCC poised for starring role in global hydrogen market By Andy Sambidge January 16, 2023 Reuters Hydrogen can help to hedge against the impacts of the global energy transition that mitigates fossil fuel use and prefers low-carbon solutions UAE launched 11 green energy projects worth $43.3bn in 2022Saudi’s Neom Green Hydrogen Company developing $5bn facilityOman and International Energy Agency working on three projects The GCC is set to play a key role in the global hydrogen market, with the UAE, Saudi Arabia and Oman looking to become leaders in the export of clean fuel. As industry experts come together in Abu Dhabi this week for the World Future Energy Summit, a report from Frost & Sullivan paints a picture of huge opportunity for the region. It said that with GCC countries seeking to achieve energy sustainability through a combination of renewable energy integration, energy-efficiency implementations and hydrogen production and transport, the region’s energy sector is set for “wide-scale evolution”. “Hydrogen has gained increasing recognition as a key contributor to the evolution of the energy sector and is expected to play a key role in decarbonising the economy across end-use sectors in the GCC,” noted the report. How the UAE and UK can reap multi-billion hydrogen rewardsAramco, Adnoc and the long road to decarbonisationOman seeks proposals for large-scale green hydrogen projects “GCC countries, especially the UAE, Saudi Arabia and Oman, are working on national strategies aimed at developing the hydrogen market in the region and positioning themselves as future hydrogen exporters,” it added. The report coincides with Abu Dhabi-based Masdar signing an agreement with the Port of Amsterdam, SkyNRG, Evos Amsterdam and Zenith Energy to explore the development of a green hydrogen supply chain to support Dutch and European markets. The deal will focus on production in Abu Dhabi and export to the Netherlands to be delivered to key European sectors – sustainable aviation fuel, steelmaking and bunkering for shipping. The hyrdrogen will also be supplied to new, emerging European offtakers via pipeline, truck and barge. Last year Masdar also signed agreements with leading Egyptian state-backed organisations to cooperate on the development of green hydrogen production plants in the country. The report comes as the UK and UAE governments ink a clean energy memorandum of understanding to encompass the full scope of bilateral co-operation, including the new low carbon super fuel hydrogen. Oman signs the MoU with the Netherlands (left) and Saudi’s Neom Green Hydrogen Company collaborates with the Saudi Industrial Development Fund British Energy Secretary Grant Shapps described the UAE as being “right at the cutting edge in generating low-cost solar power on a frankly stunning scale” during a speech to the Atlantic Council at its Global Energy Forum in Abu Dhabi on Saturday. At the same time, Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure, revealed the UAE launched 11 green energy projects worth $43.3 billion in 2022. GCC countries currently use large quantities of natural gas-based grey hydrogen. The availability of low-cost natural gas, coupled with the ease of carbon capture, use and storage allows for the cost-competitive production of blue hydrogen. The GCC has several competitive advantages to also play a key role in the global green hydrogen economy, said Frost & Sullivan, including solar and wind resources, financial capabilities and export potential. “Not only does the region have strong connectivity with developed economies in Europe, but a network of ports and pipeline infrastructure provides the region access to fast-growing markets in Asia and Africa,” it added. “These trade routes and connectivity are expected to play a key role in hydrogen transportation, which would prove critical in meeting end-user demand for the fuel as future large demand markets such as Europe and Japan could face challenges in ramping up hydrogen production to meet demand requirements.” Krzysztof Ignaciuk, a Dubai-based director of Apricum, a strategy consulting firm dedicated to the clean tech industry, said: “The interest of GCC players in low-carbon hydrogen is evident from their several projects, export agreements, and national hydrogen strategies. “As oil and gas-based economies, hydrogen can be a hedging instrument against the impacts of the global energy transition that mitigates fossil fuel use and prefers low-carbon solutions,” he said. “While low-carbon hydrogen sales have been targeted for blue hydrogen for Asia-Pacific so far, GCC players can leverage their early mover advantage to secure long-term offtake agreements with the EU through programmes such as the H2 global initiative. “Besides export, the GCC also has domestic demand for low-carbon hydrogen in oil refining, ammonia, and transportation sectors.” World Future Energy SummitAbu Dhabi’s World Future Energy Summit is being held as a number of GCC countries look to advance hydrogen projects Leen AlSebai, head of the World Future Energy Summit and general manager of RX Middle East, the event’s organiser, added: “The potential for green hydrogen in the Middle East and North African region is significant. The rich renewable resources make the region one of the best locations for green hydrogen production. “However, speed of implementation will be key if the region is to fully realise its potential as a green hydrogen and renewable energy powerhouse.” The summit, hosted by Masdar and part of Abu Dhabi Sustainability Week, is being held as a number of GCC countries look to advance hydrogen projects. Last month Oman and Paris-based International Energy Agency (IEA) said they are working on three joint green hydrogen projects in the sultanate. German utility Uniper said it was involved in a project with Masdar to produce green hydrogen in the UAE. They plan to build a 1.3gw solar plant from which they expect to produce clean hydrogen via electrolysis from 2026. In Saudi Arabia, Neom Green Hydrogen Company signed facility agreements with local, regional and international banks for its $5 billion green hydrogen production facility. It aims to integrate up to 4gw of solar and wind energy to produce up to 1.2 million tonnes of green ammonia, translating to up to 600 tonnes per day of carbon-free hydrogen. Global investment in hydrogen is forecast to reach $500 billion by 2030, far short of the $1.2 trillion required to reach long-term net zero goals. At least 17 countries and the EU have already developed hydrogen strategies including the UK. About 20 other countries are presently formulating their policies. In August Abu Dhabi unveiled its hydrogen policy and regulatory framework – part of the UAE’s push to become a global force in the low-carbon economy. The hydrogen colour code Green hydrogen is the term used to describe hydrogen that is produced on a CO2-neutral basis through the electrolysis of water. Turquoise hydrogen is created by a thermal process in which natural gas is broken down with the help of methane pyrolysis into hydrogen and solid carbon.Blue hydrogen is generated from the steam reduction of natural gas. Grey hydrogen is obtained by steam reforming fossil fuels such as natural gas or coal. Yellow hydrogen refers to hydrogen production from a mixture of renewable energies and fossil fuels. Sometimes other colours are ascribed to hydrogen, based on how it is produced. For red, pink and violet hydrogen, the electrolysers are driven by nuclear power. Hydrogen that is merely a waste product of other chemical processes is referred to as white hydrogen, while the use of coal as a fuel produces brown hydrogen.