The UAE’s energy companies took advantage of COP28 taking place on home turf to engage in a flurry of green hydrogen deal-making, highlighting the country’s ambition to become a major global player in the sector.

Abu Dhabi’s government-owned Masdar took the lead, signing over a dozen investment agreements. The company’s aim is to grow its portfolio to 100GW of renewables and 1mt/yr of green hydrogen by 2030.

Most of the deals entailed the development of pure renewables, with the subsequent use of some of the output in the production of green hydrogen a stated or unstated possibility.

Green hydrogen deal-making was primarily focused on Europe and its potential suppliers. A non-binding heads of terms development agreement was signed with Austria-based OMV—partly owned by Abu Dhabi sovereign wealth fund Mubadala and a major stakeholder in the emirate’s oil and petrochemicals industry—to consider developing a green hydrogen plant to help abate emissions from the European firm’s refineries.

1mt/yr – UAE production target

Another, with Vienna-based electricity producer Verbund, called for a feasibility study on a major facility in the Castilla-La Mancha region of central Spain for the purposes of decarbonising hard-to-abate industries there and in Central Europe.

The UAE’s energy relationship with Austria, like its relationship with other European importers, has blossomed in the wake of the continent’s dash to replace Russian gas supplies, spurring both a quest for alternative sellers and an accelerated drive to displace hydrocarbons with renewables-based hydrogen.

In March 2022, weeks after Moscow’s invasion of Ukraine, the two governments agreed to boost collaboration in the hydrogen technology industry, while Masdar and Verbund agreed in February to work together on developing a hydrogen supply chain from the Mideast Gulf state to Austria and southern Germany. The Emirati company has signed  similar deals with prospective importers in Germany and the Netherlands.

Azerbaijan

Mounting international interest in Azerbaijan’s hydrogen potential is heavily based on its proximity to the European market—to which it is connected through gas pipeline infrastructure. State-owned Adnoc—which generally kept a prudently low profile during COP28—extended its interest in the gas-rich South Caucasus state through a ‘strategic collaboration agreement’ with Azerbaijan’s state-owned SOCAR covering the development of low-carbon energy technologies, including those related to blue hydrogen. The Emirati company made its first upstream investment overseas in August by buying a 30% stake in Azerbaijan’s Absheron offshore gas and condensate project.

Meanwhile Masdar, which signed joint development agreements with SOCAR in January envisaging the development of 4GW of renewables and green hydrogen capacity, signed a memorandum of understanding (MOU) with the latter and Saudi government-affiliated ACWA Power to co-develop 500MW of clean power in Azerbaijan’s Nakhchivan Autonomous Republic.

ACWA’s deal-making at COP was relatively muted compared with that of its regional rival but included an agreement with Indonesia’s state power and fertiliser companies Perusahaan Listrik Negara and PT Pupuk Indonesia to develop an estimated $1b, 150,000t/yr green ammonia plant—only its second international investment in the sector. Ground-breaking on its second—a 500,000t/yr facility in Uzbekistan—was also announced during the conference.

Jordan

Jordan’s nascent hydrogen ambitions are likewise predicated partly on ease of access to European markets via Aqaba port and the Suez Canal. Masdar’s involvement aligns with government policy of supporting poorer regional allies via investment rather than handouts or military aid.

The Abu Dhabi-based firm has signed an MOU with Amman’s Ministry of Energy and Mineral Resources to conduct a feasibility study into a potential green hydrogen plant near the Red Sea port, as well as a joint development agreement for a 1GW wind power project. UAE investor Fidelity Group agreed in July to study construction of a 100,000–200,000t/yr green ammonia plant in the same area.

In marked contrast to the deluge of domestic project agreements signed by Cairo when Egypt hosted COP last year, this year’s gathering saw minimal home-market deal-making. The federal government unveiled the outline of a National Hydrogen Strategy in November, including headline targets to produce 500,000t/yr of green hydrogen and 400,000t/yr of blue hydrogen domestically by 2031. It has promised to publish an implementation plan in early 2024, which may spur so-far slow progress on the three main projects declared.

In the meantime, Masdar announced it was working with steelmaker Emirates Steel Arkan on a pilot project using green hydrogen to decarbonise the latter’s operations while Adnoc inked a strategic collaboration agreement with Japan’s Mitsubishi Heavy Industries to develop low-carbon hydrogen and ammonia markets. Abu Dhabi has been cooperating with Tokyo from the beginning of its hydrogen development, and exported its first cargo of blue ammonia to the East Asian nation in 2021.

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Author: Clare Dunkley