Blue Hydrogen And The Middle East's Energy Systems

The Middle Eastern region has recently begun to choose hydrogen as an energy source, following the worldwide trend toward a low-carbon economy. In anticipation of a future in which clean energy sources, rather than crude oil, dominate the global energy market, oil-exporting countries are working to develop new businesses and alliances. Hydrogen, one of the most common elements in the universe, is quickly gaining popularity as a means of reducing carbon emissions. The world's largest oil exporter, Saudi Arabia, also plans to become the leading hydrogen exporter. The United Arab Emirates is planning to incorporate hydrogen into its clean energy mix by the year 2050, and as such is developing a hydrogen road map. However, can this region, which has so many natural resources, replicate the economies of scale that have helped to bring down the cost of solar energy projects worldwide and reap the industrial benefits of clean fuel?

ACWA Power CEO Paddy Padmanathan has stated that the clean fuel has the potential to spur the development of a new, decarbonized industrial sector in Saudi Arabia. "The Kingdom of Saudi Arabia might easily become a steel producer, and an environmentally friendly one at that, thanks to the very competitive green hydrogen it can make. As a result, I believe the potential is enormous," he said. Green hydrogen will be produced in Saudi Arabia's Neom, in a US$5 billion project including ACWA Power and Air Products. Saudi Arabia, which produces 12.5% of the world's oil, hopes to sell hydrogen to European countries via pipeline. Prince Abdulaziz, the Minister of Energy, claims that Saudi Arabia will become "the next Germany" in renewable energy. In addition to its many practical applications in the medical field, hydrogen also finds widespread use in manufacturing. While export is the first priority for Gulf oil producers, they are considering domestic uses for the gas, such as in steelmaking, which currently utilises coking coal to "reduce" the carbon content of ore. Hydrogen could play a bigger part in Saudi Arabia's efforts to diversify its economy and lessen its reliance on oil, the country's primary source of income, in light of its desire to cut emissions.

Green hydrogen will be produced from renewable sources at the 4-gigawatt ACWA Power-Air Products project. One of the most space-efficient ways to carry hydrogen is in the form of liquid ammonia, which will be produced from the purified gas. Buyers in the Far East will "recrack" the gas to produce power or fuel cells for transportation using hydrogen.

The Hydrogen Economy

Hydrogen is a huge part of the expanding economy. According to Dii and Roland Berger, a consultant company in Dubai, the global market for green hydrogen is projected to expand to 500 million tonnes by 2050, with annual revenue anticipated to surpass US$200 bn in the same period. Bader Chaudhry, the energy sector chief of Mashreq Bank in Dubai, predicts that by 2050, the Middle East would have positioned itself to become a US$11 tn market for hydrogen.

As the hydrogen economy expands, the bank anticipates that the government will seek out technology partners to help fund the sector. Big oil firms like Adnoc in the Middle East are investing heavily in green and blue hydrogen in order to decarbonize their operations while still capitalising on their core competencies. The company is actively pursuing steam methane reformation, which separates natural gas into hydrogen and carbon dioxide, as a method for mass-producing blue hydrogen.