Middle East Rising Project Hydrogen

The market for clean hydrogen is growing, and so is the demand for its by-products such as green ammonia, low-carbon steel, and synthetic fuel for aviation. Several projects have been announced since the end of 2021, with the number of announced projects increasing. Oil and gas companies, renewable energy developers, chemical producers, and manufacturers are all trying to secure an advantage.

Moreover, energy is not just about producing clean energy; it is also about storing, transporting, and delivering the clean energy worldwide. The Middle East aims to lead the global hydrogen market. Its market has great potential because it possesses the right scalable infrastructure and transportation capabilities throughout the globe.

Hydrogen is generated through a chemical process, such as gas or coal, which emits huge amounts of carbon. Green hydrogen, however, constitutes two percent of global hydrogen production. It uses electrolysers powered by renewable electricity. This process splits water into oxygen and hydrogen with zero carbon emissions.

It can be burned as a fuel and produces only water as a by-product, and it can be used to store excess energy produced by renewable electricity plants or converted into other substances.

According to Wood Mackenzie, a global energy research and consulting organisation, location determines the power generation needed to capture and store hydrogen. Based on their analysis, a more stable supply of clean energy results in lower project costs as energy and hydrogen storage requirements can be optimised. The greater the level of variability in the power supply, the greater the cost of buffer storage. Mackenzie stated that the use of

Renewable Energy Credits (REC), using the grid as an energy storage buffer, is a short-term solution but might become a problem if the proportion of renewables creates grid stability issues.

The Middle East as a Key Player in Hydrogen Development

The Middle East can become a key player in the green hydrogen industry. Saudi Arabia is building a US$5 billion green hydrogen plant that will produce 650 metric tonnes of hydrogen daily via solar and wind, converting it into ammonia. It will be the world’s largest green hydrogen plant, and production will start in 2026.

There is a rising demand for low-carbon hydrogen, including blue hydrogen, which captures and stores carbon produced when making gas. It has been predicted by Wood Mackenzie that it will rise to 223 Mt by 2050 from less than 100 Mt in 2022, generating a $600 billion investment opportunity.

The UAE’s Energy Minister, Suhail al-Mazrouei, stated that the country intends to capture 25 percent of the global hydrogen market.

 Abu Dhabi National Energy Company (TAQA), in partnership with Emirates Steel, will produce green hydrogen that will be used to manufacture green steel in the future. TAQA and Abu Dhabi Ports Co. are at an "advanced stage" in developing an industrial-scale green ammonia plant. It will convert green hydrogen using solar energy. It also plans to make green hydrogen at its solar park.

 Oman signed an agreement with BP to develop green hydrogen projects by 2030. It will evaluate wind and solar data covering 8,000 square kilometres of land to develop the projects at optimal locations.

Middle East’s Plans to Develop Green Hydrogen

The Middle East is planning to beat its competitors, Europe and Asia. The regions where the hydrogen market dominates the most The UAE has announced many projects to support this. France’s Engie and Abu Dhabi will invest US$5 billion in the renewable energy business, which aims to have an electrolyser capacity of 2 gigawatts by 2030. Dubai has also launched its first ‘industrial-scale’ green hydrogen plant. Saudi Arabia announced a US$7 billion agreement to produce green hydrogen in Oman’s Salalah Free Zone with ACWA Power and Oman Oil and Air Products. Oman will also be focusing on becoming a hydrogen-powered economy by 2040 with 30 GW of green and blue hydrogen.

Saudi Arabia plans to keep the cost of green hydrogen production to US$1 per kg, making it the cheapest in the world. Hydrogen will typically cost US$7 in the market, but Saudi Arabia’s aim to keep the cost low has been due to major investments in research and development in this industry.

Other companies, such as Siemens, have identified 46 viable green hydrogen projects worth US$92 billion. The UAE, Oman, and Saudi Arabia are seen as potential investors in the hydrogen industry. Additionally, the UAE aims to increase its renewable energy contribution to 75 percent by 2050.

NEOM: The Greatest Hydrogen-Powered Project

The Middle East is especially blessed with space and solar irradiation levels. It has the world’s most ambitious hydrogen projects, which will diversify the economy, create job opportunities, and make it a world leader in new sectors and the energy transition.

Although hydrogen isn’t available on the market, some of its projects are in the early stages: the NEOM Helios and the Egyptian Ain Sokhna complex. These are under development. The NEOM Green Hydrogen Company intends to become one of the world’s largest at-scale green hydrogen production companies. It is based in Oxagon, features a port, and is part of a logistics network with an integrated supply chain.

NGHC is a joint venture between NEOM, ACWA Power, and Air Products that aims to build a world-scale, green hydrogen-based ammonia production facility using 100 percent renewable energy by 2026.

In 2026, the company’s plant will start producing green hydrogen from 100 percent renewable energy sources. The production capacity will be up to 1.2 million metric tonnes of green ammonia annually. The company aims to produce nearly 600 metric tonnes of green hydrogen per day. This plant will save up to 5 million metric tonnes of CO2 per year. This move by Saudi Arabia is to support and reduce its carbon emissions.

In May 2022, NEOM Green Hydrogen Company’s Board announced the appointment of David Edmondson as Chief Executive Officer, which will boost the company. On Neom’s website, Nadhmi Al-Nasr, CEO of NEOM and Chairman of NGHC, commented that Edmondson will have full accountability for establishing all aspects of the joint venture, including building the future organisation. "The appointment of David Edmondson as NGHC's CEO is a natural follow-up to our recent agreement to build the world's largest green hydrogen plant, which will produce 1.2 million metric tonnes of green hydrogen-based ammonia per year," Al-Nasr said.

The green ammonia will be sold to Air Products under a long-term supply agreement and exported to international markets. It will be converted back into green hydrogen to fuel the hydrogen mobility market. According to the company, its other investment at Oxagon, NEOM’s advanced manufacturing hub, will also develop clean, autonomous electric vehicles in NEOM to ensure a sustainable and safe environment.

"We aim to revolutionise the global energy market and create a circular economy as we redefine the parameters of sustainable living and abundant resource production, all in harmony with nature," the CEO of Neom, Al-Nasr, stated.

According to MEED’s 2023 report, more than 45 new hydrogen projects have been announced, with a value of US$100 billion last year alone and a total hydrogen production capacity of more than 10 million metric tonnes a year.

In conclusion, the market and need for hydrogen are expected to expand substantially. However, for it to succeed, it needs to have access to the right location for the plants to be installed, renewable energy resources, partnerships, and investments.