After riding high on the oil and gas boom for decades, the Gulf countries including Oman, Saudi Arabia and the UAE are eyeing opportunities in green hydrogen, the fuel of the future. This move is an effort by the countries to fuel the economic transition to non-oil based revenues and relieve the climate crisis, Gulf News reported.
Looking for alternative revenue sources for oil and gas, the UAE, Saudi Arabia and Oman are investing heavily on green hydrogen, which is low polluting, environment friendly and has many uses. Currently the fuel makes up for less than one percent of the total hydrogen production, and it is not yet commercially viable.
The green alternative needs a major scaling up of renewable energy sources, a process which could actually take years. As oil revenues take a dip, energy companies in the Gulf foresee this opportunity coming forth. While fossil fuels produce harmful greenhouse gases when they burn, green hydrogen on the contrary is produced from water using renewable energy sources such as wind, solar and hydropower. The hydrogen thus created emits only water vapor, according to the news report.
Betting big on the green fuel of the future, Saudi Arabia is constructing the world’s largest green hydrogen plant at NEOM, the $500-bn futuristic megacity being built on the Red Sea.
The UAE has approved a hydrogen strategy to become one of the top ten producers of green hydrogen by 2031. However, Oman seems quite poised to lead the green hydrogen production race, as it is on track to become the sixth largest exporter globally and the biggest in the Middle East by 2030.
Leading auditing firm, Deloitte predicts that the Middle Eastern countries, primarily the region of the Gulf will lead global hydrogen trade in the near-term, with exports accounting for half of their domestic production by the end of the decade. Considering green hydrogen cannot still be produced as yet at a profit, the countries in the Gulf are focusing on maximizing hydrocarbon sales. It will take years before green hydrogen is produced at competitive prices in comparison with fossil fuel-based alternatives.
Also the demand for hydrogen remains unclear. Only once the technology for green hydrogen production matures and the costs fall, it will then be the “new green fuel of the future”.
As words of caution, Abdullah al-Nuaimi, the UAE’s former climate change minister stated that the current infrastructure for transporting hydrogen is inadequate and it would need massive investments to modify and put it to use, Gulf News reported.
