Onto a Cleaner Future, Powered by Hydrogen

The hydrogen market covers the production, distribution, storage, and utilisation of hydrogen across various sectors. According to Markets and Markets, the global hydrogen market could grow to $257.9 billion by 2028, with a compound annual growth rate (CAGR) of 10.2%.

Transitioning to a more sustainable future is not without challenges. Yet, as the world seeks cleaner and more reliable energy sources, the answer may lie in the most abundant element on the planet: hydrogen.

Hydrogen is not an energy source itself but a versatile energy carrier. It can store, transport, and deliver energy derived from other sources. This is why experts consider it an important element in the global transition to cleaner energy systems.

Why hydrogen?

The hydrogen market covers the production, distribution, storage, and utilisation of hydrogen across various sectors. According to Markets and Markets, the global hydrogen market could grow to $257.9 billion by 2028, with a compound annual growth rate (CAGR) of 10.2%.

The production of hydrogen can be categorised into three, and it depends on the energy sources and methods used. First is gray hydrogen, which is the most common form of hydrogen. It’s also the least sustainable as it’s produced from coal or natural gas and it emits substantial amounts of carbon dioxide.

The other ones are blue and green hydrogen. Blue hydrogen is produced like gray hydrogen, but there’s a carbon capture and storage (CCS) component that reduces emissions. Meanwhile, green hydrogen is produced via water electrolysis powered by renewable energy. Among these, green hydrogen is at the forefront of global attention because it’s the most sustainable option.

The hydrogen market’s scope extends to various sectors as it has wide-ranging applications. For instance, hydrogen can power fuel cell vehicles (FCEVs), which are viable zero-emission alternatives in the transportation industry. Hydrogen can also store surplus renewable energy, which helps boost grid stability. Additionally, hydrogen turbines and fuel cells can enable cleaner electricity production.

There are a number of reasons behind hydrogen’s appeal in the energy transition journey. Primarily, it can reduce carbon emissions, particularly in hard-to-electrify sectors such as heavy industry and long-haul transport. It’s also versatile and scalable, catering to various energy needs.

Growing demand, challenges

By 2050, global hydrogen demand is expected to grow to 600 to 660 million metric tons annually, fulfilling over 20% of energy needs and abating 20% of human-driven emissions. This is according to a report from McKinsey. 

However, there are hurdles to overcome. One of the most significant is cost. Green hydrogen production remains expensive due to the high cost of electrolysers and renewable energy. 

Moreover, there’s this issue of infrastructure development, as scaling up hydrogen transport and storage networks, including pipelines and refueling stations, is critical. On the regulatory side, global standards for hydrogen production, certification, and trade must be established as well to enable seamless integration.

To address this, governments and industries worldwide are taking steps to invest in research and development and implement policy frameworks, among others.

In the Middle East, the potential is strong, thanks to the region’s abundant renewable energy resources, strategic geographic location, and significant investment capacity. Leading the pack is Saudi Arabia with its several initiatives — including the NEOM Green Hydrogen Project.

Valued at $5 billion, this flagship initiative aims to produce 650 tons of green hydrogen daily by 2026. Located in the NEOM megacity, the project utilises solar and wind energy to power electrolysis, making it one of the largest and most advanced green hydrogen facilities globally.

Aramco, the national oil company of Saudi Arabia, is also targeting the production of 11 million tons of blue ammonia annually by 2030, supported by extensive CCS infrastructure. As production ramps up, the country also eyes to export hydrogen to markets in Europe and Asia, with initial shipments of blue ammonia already reaching Japan and South Korea.
More initiatives

In the United Arab Emirates (UAE), Masdar — the country’s clean energy powerhouse — has been exploring hydrogen production since 2008. Significant developments have been achieved since then.

For instance, in August last year, it announced its partnership with TotalEnergies to assess the feasibility of a commercial-scale green hydrogen-to-methanol-to-SAF (Sustainable Aviation Fuel) project. The goal is to use captured carbon dioxide as a feedstock, combined with green hydrogen from renewable-powered electrolysis, to produce green methanol and SAF. The output is seen as a cleaner fuel alternative in hard-to-abate sectors like aviation and maritime. This agreement follows a successful test flight conducted by Masdar and TotalEnergies during COP28, which proved the potential for converting methanol to SAF.

In related news, Masdar and EMSTEEL, the UAE’s largest publicly listed steel producer in the country, announced a successful pilot project producing green steel using green hydrogen. Steelmaking contributes 7 to 8% of global carbon emissions, making it one of the hardest sectors to abate. Green hydrogen can reduce carbon emissions in this process by up to 95%. 

“Decarbonization of hard-to-abate industries is vital to the global undertaking to achieve the objectives of the historic UAE Consensus agreed at COP28. Green hydrogen is an essential element in advancing national and global decarbonization efforts and we are proud to be at the forefront of that endeavor,” Masdar CEO Mohamed Jameel Al Ramahi said in a statement.

Like Saudi Arabia, the UAE is also intensifying its efforts to export hydrogen. One of the country's initiatives involves upgrading its ports, such as the Port of Fujairah, to facilitate hydrogen exports. 

Middle East as a hydrogen hub

Other countries in the region are also tapping into the potential of hydrogen. For example, Oman aims to produce 1 million tons of renewable hydrogen annually by 2030, scaling up to 8.5 million tons by 2050. The country’s national hydrogen strategy emphasises large-scale production for both domestic use and export.

A notable project in Oman is the HYPORT Duqm. This gigawatt-scale green hydrogen and ammonia project in Duqm, Oman, aims to be one of the world’s first large-scale initiatives in renewable hydrogen energy.

In Egypt, the goal is to have 5.8 million tons of green hydrogen production annually by 2040. With proximity to Europe, Egypt is also well-positioned to supply green hydrogen to European markets. 

Strategies and efforts like these demonstrate how the Middle East is poised to be a leader in the hydrogen economy — and, subsequently, the clean energy narrative.
 

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