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Abu Dhabi unveils hydrogen plan to bolster UAE’s eco ambitions

BP's Teesside site BP
The site of BP's planned development in Teesside, north-east England. ADNOC is working with the firm on a blue hydrogen plant
  • Department of Energy releases policy and regulatory framework
  • Strategy supports UAE’s aim to be a global player in low-carbon industry

Abu Dhabi unveiled its hydrogen policy and regulatory framework on Monday – part of the UAE’s push to become a global force in the low-carbon economy.

The Department of Energy (DoE) said its framework aimed to accelerate the UAE’s national hydrogen strategy, adding that it is working with public and private sector stakeholders including Abu Dhabi National Oil Company (ADNOC) and Masdar.

The two Abu Dhabi companies have already linked up with BP on its planned blue and green hydrogen developments in Teesside, north-east England. 

ADNOC, the UAE’s largest energy company, has a 25 percent stake in the design stage of BP’s blue hydrogen project, H2Teesside, while Masdar has signed a memorandum of understanding to acquire a stake in the proposed green hydrogen project, HyGreen Teesside.

The Abu Dhabi DoE said its new hydrogen policy and framework aimed to define policies, regulations, standards and certifications, to help the emerging hydrogen industry become globally competitive. The department expects to report on outcomes before the end of 2022.

The move comes as annual revenues from green hydrogen in the GCC are estimated to grow to about $200 billion by 2050, generating up to one million jobs within three decades.

Ahmed Mohammed Belajer Al Rumaithi, undersecretary of the Abu Dhabi DoE, said: “A vibrant low-carbon hydrogen production and consumption industry will place Abu Dhabi and the UAE at the global forefront of countries producing green energy. 

“It can potentially increase low-carbon hydrogen production in Abu Dhabi to more than a million tonnes per annum by 2030.

“Locally produced hydrogen will act as a driver of innovation and economic diversification, allowing for the decarbonisation of the economy in line with UAE National Energy Strategy 2050, net zero commitment and improved energy security.”

He added: “This is an opportunity for Abu Dhabi, with its abundant solar resources, to contribute to fulfilling a global need that will create new local industries and jobs, offer growth for existing firms, develop new skill sets, and facilitate more research. It will also stimulate more foreign direct investment in the energy sector.”

The pursuit of low-carbon hydrogen

Climate change and the need to decarbonise economies all over the world are driving the pursuit of low-carbon hydrogen technologies as a source of fuel.

Michael Savva, a partner at law firm Watson Farley & Williams (Middle East), told AGBI that the UAE was also using its hydrogen policy to promote the sustainability narrative in aviation – a sector that is central to the UAE’s position as a global tourism destination.

“What is clear is that, through the UAE’s strategic investments, both abroad and at home, it intends to be a major player in the global hydrogen sector in the years to come,” he said.

According to a Hydrogen Council report published in February 2021, more than 30 countries have released hydrogen roadmaps and the industry has announced more than 200 projects and ambitious investment plans. 

Total investments could exceed $300 billion to 2030 – the equivalent of 1.4 percent of global energy funding.

The council said worldwide production of hydrogen had already reached 70 million tonnes per year but 96 percent of this is grey hydrogen, produced from steam reformation of methane in an energy-intensive, carbon-emitting process.

In Abu Dhabi, hydrogen production is underway as a feedstock for ammonia and industrial processes, which is mainly grey hydrogen.

ADNOC has announced plans to increase its carbon capture capacity from 800,000 tonnes to five million tonnes by 2030. This will make Abu Dhabi one of the world’s lowest-cost and largest producers of low-carbon blue hydrogen.

Abu Dhabi’s DoE says the emirate has a “unique competitive advantage” as a base for low-carbon hydrogen production, with large reserves of natural gas and sunlight as well as advanced infrastructure and experience of exporting of flammable materials.

Al Rumaithi added: “We are open to international partnerships to further build and improve our regulatory and policymaking capacity to drive the low-carbon hydrogen transition.”

Kick-starting the hydrogen industry in the UK

ADNOC and Masdar’s UK collaboration at H2Teesside is expected to kick-start the UK’s hydrogen economy at scale, with the development of two 500MW hydrogen production units by 2030.

The project is targeting start of operations in 2027 while HyGreen is expected to produce 60MWe (megawatt electrical input) of hydrogen at start-up in 2025, increasing to up to 500MWe by 2030. 

Together, these two projects could deliver 15 percent of the UK government’s recently expanded 10GW target for hydrogen production in 2030.

Thomas van Lanschot, associate director of energy research at Fitch Solutions, said: “The MENA region exhibits robust overall potential for the development of hydrogen infrastructure in the long term, as growing global demand for low-carbon fuels begins to offer a strong basis for diversification to support non-oil economic activity in the region.”

Last November at the COP26 climate summit, the UAE announced its Hydrogen Leadership Roadmap, a blueprint to support domestic, low-carbon industries to contribute to the country’s net-zero 2050 ambition and establish the country as a competitive exporter of hydrogen. 

The country will target 25 percent market share in key export markets, including Japan, South Korea, Germany and India, along with additional high-potential markets in Europe and East Asia.