- The global hydrogen market is expected to be valued at $2.5 trillion by 2050
- Total investments into over 228 projects announced along the hydrogen value chain is estimated to reach more than $300 billion in spending through 2030
- The GCC is at a huge advantage to emerge as a leader in the new hydrogen economy with its existing infrastructure, technical capabilities and influx of foreign investments
UAE, 14 March 2021 – The impact of climate change globally is pushing for a critical implementation of clean energy initiatives, and renewable hydrogen is poised to be a game-changer in this effort to decarbonize our economies. The surge of investments in hydrogen production and fuel cell technologies shows a clear vision for hydrogen to replace fossil fuels.
The global demand for ‘green hydrogen’ is expected to grow rapidly in the medium term to 530 Mt, displacing 10.4 billion barrels of oil equivalent by 2050 or 37% of 2020’s global oil production and the global hydrogen market could be valued at $2.5 trillion by 2050, supplying up to 18% of global energy demands.
According to the Hydrogen Council, as of early 2021, over 30 countries have released hydrogen roadmaps and governments worldwide have committed public funding in support of de-carbonization through hydrogen technologies. Almost 228 large-scale projects have been announced along the value chain, with 85% located in Europe, Asia, and Australia. These include large-scale industrial usage, transport applications, integrated hydrogen economies, infrastructure, and giga-scale production projects. Total investments into all announced projects is estimated to reach more than $300 billion in spending through 2030. Of this investment $80 billion can currently be considered “mature” – meaning that these projects are in the planning stage, have passed a final investment decision (FID), or are under construction, already commissioned, or operational.
GCC countries, particularly UAE and KSA have been accelerating their investments towards capital expenditures in hydrogen projects, with collaborations playing a key role in enabling a shift towards low-carbon export products.
At the UAE-South Korea virtual business summit concluded earlier this month on March 4th, ADNOC and Korea’s GS Energy have agreed to explore opportunities and identify possible areas of investment to further Abu Dhabi’s emerging blue hydrogen eco-system.
While ADNOC independently develops blue hydrogen opportunities; the Abu Dhabi Hydrogen Alliance formed between Mubadala, ADNOC and ADQ in Jan 2021 strives to accelerate Abu Dhabi’s green hydrogen leadership.
ADNOC already produces around 300,000 tons per annum of hydrogen for its downstream operations, with plans to expand to more than 500,000 tons, and is well placed to build on its advantaged position as a major natural gas reserves holder and producer, with existing infrastructure and strong partnerships and customer relationships around the world. The signing followed ADNOC’s agreement with the Ministry of Economy, Trade and Industry of Japan to explore cooperation on fuel ammonia and carbon recycling, harnessing technologies which will further enable the hydrogen economy.
State-owned DEWA in collaboration with Siemens and Expo 2020 were the fore runners in the region, announcing the MENA region’s first solar based hydrogen electrolysis facility, unveiled within Dubai’s Mohammed bin Rashid Al Maktoum Solar Park (MBR Solar Park).
Following lead, the NEOM region in KSA took its first steps in 2020 by signing a $6 billion JV with Air Products, ACWA and NEOM in equal partnership, to build a world-scale green hydrogen-based ammonia production facility powered by renewable energy in KSA. The business is expected to produce 650 tons per day of carbon-free hydrogen and 1.2 million tons of green ammonia per year, reducing carbon dioxide emissions by the equivalent of 3 million tons per year.
The GCC’s ample low-cost land, low cost of capital, existing industrial capacity, excellent solar and (in places) wind resources, and geographical proximity to growth markets set it at an excellent position to become a major green hydrogen producer. Similarly, its low-cost natural gas and ease of carbon capture, use and storage (CCUS) allow it to produce cost-competitive blue hydrogen. The GCC, is thus set to emerge as a leading player in hydrogen production as compared to other regions invested in hydrogen, such as the EU, China, Japan, and Australia.