The UAE is in talks to develop green hydrogen facilities in Spain, Egypt and the UK as part of plans to reach 1.4mt/yr of low-carbon hydrogen capacity by 2031. And it is targeting a levelised cost of green hydrogen of $2/kg amid advancement in technologies, a senior energy ministry official told Hydrogen Economist.

The UAE expects to produce 1mt/yr of green hydrogen and 400,000t/yr of blue hydrogen by 2031, mainly targeting export markets in Europe and Asia. The Mideast Gulf country, which aims to hit net-zero emissions by 2050, is forecasting the production of 7.5mt/yr of low-carbon hydrogen by 2040 and 15mt/yr by mid-century.

“Our target will be to utilise low-carbon hydrogen for our domestic needs, but the majority of our hydrogen production will be for export” Olama, UAE undersecretary of energy and petroleum affairs

“There are facilities [for green hydrogen] that are going to be built in the country, plus there are facilities that are going to be built abroad,” Sharif al-Olama, undersecretary of energy and petroleum affairs at the ministry, said in an interview on the sidelines of World Hydrogen MENA, organised by World Hydrogen Leaders.

“Our target will be to utilise [low-carbon hydrogen] for our domestic needs, but the majority of our hydrogen production will be for export.”

Hydrogen oases

In the UAE, the ministry is looking at creating so-called hydrogen oases: one in the industrial hub of Ruwais and another in the KIZAD freezone in the oil-rich emirate of Abu Dhabi. Steel and aluminium producers reliant on exports are mostly likely to utilise low-carbon hydrogen for their operations, he added.

The ministry is also conducting a study on upgrading pipeline and other infrastructure to help transport low-carbon hydrogen to export markets, he added.

Renewables firm Masdar, in which state-owned ADNOC has a stake, will be producing green hydrogen from facilities within and outside the UAE, while ADNOC and its subsidiaries are developing blue ammonia projects in Ruwais and abroad.

ADNOC, which plans to boost its CCUS capacity to 10mt/yr by 2030 from 800,000t/yr now, aims to capture 5% of the world’s low-carbon hydrogen market by 2030 and has already sent low-carbon ammonia cargos to Germany and Japan.

In 2023, Masdar signed a €15b ($15.7b) agreement with Spanish utility Iberdrola to evaluate the joint development of offshore wind and green hydrogen projects in markets including Germany, the UK and the US. In the same year, Masdar and Austrian electricity provider VERBUND signed an agreement to explore developing a green hydrogen plant in central Spain to support decarbonising hard-to-abate European industries.

In the UK, ADNOC signed a memorandum of understanding (MOU) with BP in 2022 to acquire a 25% stake in the design stage of the major’s blue hydrogen project, H2Teesside. Masdar signed an MOU to acquire a stake in BP’s green hydrogen project HyGreen Teesside.

In 2024, BP signed an agreement with a consortium that includes Masdar to explore developing a green hydrogen project in Egypt, where the major will act as lead developer and operator. The partners in the consortium plan to combine their green hydrogen projects to potentially build “a single large-scale” facility focused on exports.

Green, blue, pink and white

The UAE’s energy ministry is focusing on the production of green hydrogen, blue hydrogen and pink hydrogen—which is produced from nuclear energy.

“The way the hydrogen economy will develop definitely will start off with blue because it is the most economical one, leading to green and then pink,” said Olama.

Fertiglobe, the urea and ammonia manufacturer majority-owned by ADNOC, won in 2024 a bid to supply renewable ammonia to the EU following a pilot auction by German initiative H2Global. The supply will come from Fertiglobe’s project in Egypt and is expected to reach FID in the first half of 2025, with production slated to begin in 2027.

Fertiglobe committed to supply a potential 19,500t in 2027, subject to actual production and supply availability, with volumes potentially rising to 397,000t cumulatively by 2033 at a delivered contract price of €1,000/t. In 2024, Fertiglobe started construction of a 1mt/yr blue ammonia project in Ruwais, in which Mitsui and South Korea’s GS Energy have stakes. Production is expected to start in 2027, and an additional 1mt/yr project is currently under study.

Although green hydrogen’s production costs remain high, with a range as wide as $6–12/kg, based on estimates by consultancy Wood Mackenzie, the UAE is working to reach a “competitive” cost, Olama said.

1.4mt/yr – Production target

“We are looking at prices as low as $2/kg to make [green hydrogen],” he added.

The UAE, which plans to nearly triple its renewables capacity to 14.2GW by 2030, is attracting developers with its clean energy pivot.

Masdar and utility Emirates Water and Electricity Co. plan to develop a project that can deliver up to 1GW of 24/7 baseload power because it will include a 5.2GW solar plant and a 19GWh battery energy storage system.

Siemens Energy is one company eyeing further investments opportunities in green hydrogen in the UAE after participating in a pilot project with utility Dubai Electricity and Water Co.

“The UAE is one of the regions where we believe there is a lot of potential [for green hydrogen], especially with the latest announcements regarding the continuous power supply,” Agnel Cheruvathoor, Siemens Energy’s head of business development for the Middle East & India, told the conference.

The UAE may include low-carbon hydrogen to help diversify its energy mix, likely after 2035, depending on advancements in technology, Olama said.

With regards to pink hydrogen, the UAE had initially looked at producing 1.1mt/yr, but the current costs of production are too high, said Olama. State-owned Emirates Nuclear Energy Co., which operates the country’s 5.6GW Barakah plant, is conducting economic and feasibility studies on pink hydrogen production.

Drilling for hydrogen

Companies are also conducting studies and pilot projects to produce white hydrogen, which is found naturally in rock formations in the UAE, and turquoise hydrogen, which is produced with solid carbon through a process called methane pyrolysis.

ADNOC Gas, a unit of the parent company, has installed UK clean tech firm Levidian’s technology at one of its processing plants to conduct a pilot project with Baker Hughes to capture carbon from methane and produce hydrogen and graphene, a material that can be used in various industries.

UAE-based Dana Gas has also signed an agreement to deploy Levidian’s technology across its operations.

In the emirate of Ras Al Khaimah, state-owned RAK Gas plans to drill wells to look for natural hydrogen trapped in rock formations that could be used to help decarbonise hard-to-abate sectors such as cement, glass and ceramics production, CEO Chris Wood told the conference. Industries in the emirate want to lower their carbon footprint because they sell to customers in the EU, where the Carbon Border Adjustment Mechanism regulation will tighten imports of high-carbon intensity products.

Based on its current studies, RAK Gas estimates white hydrogen costs will be “sub $2/kg” and that the company may potentially start production by 2030–31 if it lines up customers and reaches FID, Wood said.

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Author: Dania Saadi