With abundant solar and wind energy potential, the Middle East is keen to develop its renewable energy generation and hydrogen production potential. According to the Gulf Petrochemicals and Chemicals Association (GPCA), the Gulf Cooperation Council’s (GCC’s) hydrogen market could experience a compound annual growth rate of 15% between 2022 and 2050, resulting in potential revenues of $120–200b/yr.

However, achieving this will require significant capex in renewable energy capacity, infrastructure, electrolyser development and installation, and hydrogen deployment. Installing the renewable and electrolyser capacities needed would require $16–60b/yr over the next 25 years, with approximately 30–40% attributed to renewable energy capacity, according to the MENA Hydrogen Alliance. The Middle East’s renewable energy capacity reached 40GW in 2020 and is expected to double by the mid-2020s.

Regardless of the costs, the Middle East is investing heavily in developing its hydrogen value chain, including contracts to export green and blue hydrogen to demand markets in regions such as Western Europe. The GCC has the potential to export more than 100mt/yr of green hydrogen to Europe and more than 85mt/yr of ammonia to Asian markets by 2050, according to the GPCA. 

At the time of publication, the GEI database was tracking more than 50 active hydrogen projects in the Middle East. These represent a total capex of more than $200b. According to the GEI database, most projects are in the UAE (36%), followed by Oman (34%) and Saudi Arabia (12%). Although Saudi Arabia ranks third in active hydrogen projects in the Middle East, the country represents more than half of the total capex in the region. Nearly 70% of active hydrogen projects in the Middle East are through green production pathways, followed by blue routes (22%). A breakdown of total active hydrogen project market share in the Middle East by country is shown in Fig.1.

Oman

The country has ambitious goals of producing approximately 1.25mt/yr of green hydrogen by 2030, increasing production to 3.75mt/yr by 2040 and up to 8.5mt/yr by 2050. This initiative will cost upwards of $140b, according to Oman’s energy ministry. A significant portion of this capex will be for the scale-up of renewables capacity. The country is targeting the ramp-up of renewables in the country’s energy mix from 1% today to 20% by 2030 and up to 35–39% by 2040.

The nation plans to develop green hydrogen in the Al Wusta, Dhofar and Duqm regions. These development plans will be instituted in a phased approach. The Omani government has set aside more than 50,000km for renewable energy and green hydrogen project development in these areas.

In June 2023, Oman awarded three renewable energy and green hydrogen production projects totalling $20b. These projects will increase Oman’s renewable energy capacity by 12GW and green hydrogen production by 500,000t/yr:

• Copenhagen Infrastructure Partners, Blue Power Partners and Al Kadra are building 4.5GW of renewable energy to help produce 200,000t/yr of green
• BP Oman will install 3.5GW of renewable capacity to produce 150,000t/yr of green hydrogen.
• Green Energy Oman plans to build 4GW of renewable capacity to produce 150,000t/yr of green hydrogen.

$120–200b/yr – Potential revenues from GCC hydrogen market

These projects will be complemented by other major green hydrogen/ammonia projects, including the large-scale HYPORT development, which will produce nearly 3GW of renewable energy and more than 650,000t/yr of green ammonia; Saudi developer ACWA Power, US industrial gases company Air Products and Omani state-owned OQ’s multibillion-dollar H2Oman project; ACME and Norwegian renewables firm Scatec’s 1.1mt/yr green ammonia project; the Hydrogen Oman and Salalah Hydrogen projects in the Salalah Free Zone; Omani green hydrogen developer Hydrom’s $7–8b green hydrogen/ammonia project in Duqm; UAE renewables developer Masdar and Japan Mitsubishi and Inpex’s complex to convert CO₂ and green hydrogen into polypropylene; and other green hydrogen production plants, infrastructure (e.g., pipelines), hydrogen fuelling stations and export facilities.

Saudi Arabia

The Kingdom has ambitious plans to be a dominant player in low- and zero-carbon hydrogen production and in global hydrogen trade, all the while striving for a net-zero economy by 2060—a green initiative expected to cost upwards of nearly $190b. Saudi Arabia is making great strides to incorporate more renewable energy capacity into its mix and plans to boost the share of renewables in its power mix to at least 50% by the end of the decade, according to the government’s Saudi Green Initiative. The additional renewable energy will aid the country in meeting its hydrogen production targets of 2.9mt/yr by 2030 and 4mt/yr by 2035.

The nation’s most ambitious initiative is the $500b NEOM project. As part of Saudi Arabia’s Vision 2030 plans, NEOM is a city being built on the Red Sea that will be powered entirely by renewables. NEOM Green Hydrogen Co. is developing a world-scale green hydrogen production facility to provide power to parts of the city and transportation network. The $8.4b plant will utilise power from a nearby 4GW solar farm to produce 600t/d of green hydrogen. The produced green hydrogen will not only be used to provide power to the city’s industry but will also fuel buses and trucks.

Saudi Arabia also plans to tap into its vast natural gas reserves to increase blue hydrogen/ammonia production. For example, NOC Saudi Aramco announced plans to boost blue ammonia production to 11mt/yr by 2030. To help achieve this goal, the country is developing the $110b Jafurah unconventional gas project. The project’s initial phase—scheduled to begin in 2024—will process more than 1.1bcf/d of natural gas, with the volume increasing significantly to more than 2.2bcf/d by 2036. Portions of Jafurah’s natural gas will be used to produce blue hydrogen. However, due to the high costs of doing this, Saudi Aramco is evaluating using the natural gas for LNG exports should the company be unable to find suitable customers for blue hydrogen/ammonia.

UAE

The UAE plans to invest in carbon-abating technologies and infrastructure to reach net-zero emissions by 2050. According to the state’s hydrogen roadmap, it is focusing on three key objectives:

1. Generating new sources of value through low-carbon hydrogen and derivatives exports.
2. Providing low-carbon hydrogen and industrial derivative opportunities.
3. Reaching net-zero targets by 2050 in hard-to-abate sectors.

To help reach its 2050 targets, the UAE plans to invest approximately $160b in clean and renewable energy over the next 30 years. The country’s energy plan calls for renewable energy capacity to increase from 3.2GW to 14GW by 2030. The significant boost in renewable energy capacity will help fuel the production of green hydrogen/ammonia.

$200b – Capex of hydrogen projects in Middle East

According to Dipak Sakaria, an energy transition expert with the UAE’s Ministry of Energy and Infrastructure, there are nearly 30 active hydrogen projects in the UAE under some form of development. The UAE is planning to produce 1.4mt/yr of hydrogen by 2031, increasing to 15mt/yr by 2050. To reach these ambitious goals, the country plans to develop two domestic hydrogen hubs: one in Ruwais and one at the Khalifa Industrial Zone Abu Dhabi (KIZAD). The UAE plans to add three additional domestic hydrogen hubs by 2050. The following are some of the more notable hydrogen production projects under development:

• France’s Engie and Masdar formed a $5b partnership to explore different routes to a green hydrogen economy in the UAE. The joint venture aims to establish 2GW of renewable energy capacity by 2030. For example, Engie and Masdar are working with fertiliser producer Fertiglobe to build a 200MW green ammonia production facility. Fertiglobe will be the sole offtaker and plans to use it for carbon-neutral fertiliser production.
• Masdar is also working with Germany’s Uniper to build a 1.3GW solar plant to produce green
• State-owned Adnoc is developing a 1mt/yr blue ammonia plant at the TA’ZIZ Industrial Facility in Ruwais. The plant is scheduled to begin operations in 2025. Adnoc also plans to utilise a portion of natural gas from its multibillion-dollar Hail and Shasha sour gas development to produce low-carbon hydrogen/ammonia. Although major onshore/offshore contracts were cancelled in late April/early May 2023, Adnoc is pursuing the mega project’s development. These projects are part of Adnoc’s $15b initiative to boost clean power production, CCS projects and other energy transition developments.
• Abu Dhabi plans to build a $1b green ammonia production facility in KIZAD. The facility includes an 800MW solar farm to produce green hydrogen, which will be converted into 200,000t/yr of green ammonia. The product is destined for the export market.
• Brooge is working with several companies to build a solar park and green ammonia production plant in Abu Dhabi. The projects will be built in two phases. Once fully operational, the export-oriented facility will produce 1,950t/d of green ammonia.

The UAE is also conducting feasibility studies on using low-carbon hydrogen for mass transportation. This includes a network of hydrogen-fuelling stations and a fleet of hydrogen-powered buses, among other hydrogen elements of infrastructure.

Other Middle Eastern projects/initiatives

Additional green hydrogen projects/initiatives in the Middle East include:

• Bahrain: The country’s Sustainable Energy Authority is planning on investing $150m to build a green hydrogen
• Israel: The country opened its first hydrogenfuelling station in mid-2023 for heavy-duty trucks. Israel plans to increase green hydrogenproduction with projects such as Doral’s Kibbut Yotvata green hydrogen
• Jordan: Jordan Green Ammonia—a JV between Poland’s Hynfra and Jordan-based Fidelity Group—is developing a 100,000–200,000t/yr green ammonia plant in the Aqaba Special Economic Zone. According to the Jordanian government, a dozen other companies are interested in investing in the country’s domestic green hydrogen production initiatives. However, the lack of a well-defined hydrogen regulatory framework is holding investors back.

The second part of this six-part report covered Asia-Pacific. The next three will cover hydrogen in Africa; Europe, Russia & the CIS; and the Americas. Click here for the introduction to the report.

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Author: Lee Nichols