Regional heavyweights UAE and Saudi Arabia are working to build a strong base for producing and exporting green hydrogen as a clean energy source, thus enhancing their position as leaders in this sector regionally and globally, according to the Abu Dhabi-based Interregional Center for Strategic Analysis..

This comes as part of their efforts to shift towards renewable energy and diversify their economies away from dependence on oil.

The emirates is investing heavily in the production of green hydrogen and ammonia, as part of its strategy to shift towards clean energy and sustainability, stated the report.

The country is considered one of the world’s leading countries in investing in this field, and seeks to develop a sustainable infrastructure that enables it to export these products to global markets, in line with the vision of achieving carbon neutrality 2050, it added.

The UAE owns the region's first station for production of green hydrogen, which is considered the fuel of the future. According to experts, it is expected to capture 25% of the global hydrogen market in 2030.

Masdar aims to produce one million tons annually by 2030, while Adnoc’s production reaches 300,000 tons annually, while the emirates intends to increase investments in the clean energy sector to up to AED600 billion ($163 billion) by 2050.

The UAE’s National Hydrogen Strategy aims to support local low-emission industries, contribute to achieving climate neutrality, and enhance and achieve global leadership in hydrogen production by 2031.

The strategy focuses on 10 enablers, and outlines the key steps the UAE will take to accelerate the growth of the hydrogen economy and reduce emissions in high-emission sectors.

Interregional analysis indicated that the UAE and Saudi Arabia are working to build a strong base for producing and exporting green hydrogen as a clean energy source, which enhances their position as leaders in this sector regionally and globally as part of their efforts to shift towards renewable energy and diversify their economies away from dependence on oil.

Big green ammonia investments

Interregional said that the most prominent investments of the UAE in green ammonia, which is known as a chemical that can be used as a clean fuel or as a means of transporting and storing hydrogen, which is an important element in the transition to a carbon-free economy. The key projects include:

*Abu Dhabi Hydrogen Alliance Project: This alliance, led by Abu Dhabi National Oil Company (Adnoc) and local and international partners, aims to develop technologies to produce green hydrogen and ammonia using renewable energy sources such as solar energy. Abu Dhabi aims to become a global hub for hydrogen production and export.

*Masdar Clean Energy Project: Masdar is working to develop renewable energy solutions and green hydrogen, which is used to produce green ammonia. Masdar has signed international cooperation agreements to promote this technology.

*Fertiglobe Project: In partnership with ADNOC and OCI NVThis project is developing a green ammonia production plant in Abu Dhabi, aiming to meet the growing global demand for clean fuel.

Masdar, one of Abu Dhabi’s renewable energy companies, aims to become one of the world’s leading green hydrogen producers. In 2021, the UAE launched the Middle East’s first green hydrogen production plant, with a capacity of 1.25 megawatts, in cooperation with Siemens.

As per the update of the UAE Energy Strategy 2050, it was decided to triple renewable energy sources by 2030, raise the contribution of clean energy to 19.8 gigawatts by the same year, and raise the contribution of clean energy installed capacity to the total energy mix to (30%).

The National Hydrogen Strategy also aims to produce 1.4 million tons of low-emission hydrogen annually by 2031, and increase production to 15 million tons annually by 2050.

Saudi long-term clean energy plan

On the kingdom, Interregional said it was investing heavily in green hydrogen as part of Vision 2030, which aims to diversify the economy and transform the Kingdom into a global center for clean energy.

The NEOM project is one of the largest projects in this field, as the Kingdom plans to establish a green hydrogen plant at a cost of nearly $5 billion. It is expected to start operating by 2025, and aims to produce 650 tons of green hydrogen per day.

In 2022, NEOM Green Hydrogen announced the signing of agreements with local, regional and international banks to build an integrated green hydrogen facility in Saudi Arabia, with a total value of $8.4 billion to produce up to 600 tons of green hydrogen per day from 110 electrolyzers with a capacity of 20MW, operating with a capacity of 4 GW of wind and solar energy, in order to produce up to 1.2 million tonne ammonia annually for export, upon the start of commercial operation in 2026.

In addition, Saudi Arabia has signed several agreements with international partners to enhance its capabilities in producing and exporting green hydrogen, and the Kingdom’s investments are expected to reach billions of dollars in the coming years.

The International Energy Agency expects green ammonia to account for 45% of energy demand in the shipping sector, while green hydrogen will not exceed 15% according to the 2050 carbon neutrality scenario, meaning that the use of green ammonia will be 3 times the use of green hydrogen in the shipping sector.

Arab interest in green ammonia

This started in 2021, as the UAE was the first to launch the debut project that year, using 40,000 tonne green hydrogen, at a cost of up to $1 billion.

Egypt also launched a project to produce green ammonia during "COP 27", a project to produce 42,000 tons in the first phase.

Interregional pointed out that the world was witnessing the establishment of major projects in hydrogen and green ammonia, seeking to provide low-carbon supplies of about 13 million tonnes.

This included the Beaumont project in America (1.1 million metric tonnes), which will start production in 2025; the Brazilian Unigel project with investments of about $1.5 billion, and the project of the Canadian company Everwind Fuels and the German company EON Hydrogen to supply green ammonia to Germany starting in 2025, in addition to the project of the Australian company Fortescue and Insight Pivot to produce about 400,000 tonnes of green ammonia annually from 2026. 

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