UAE to release hydrogen strategy in March, seeks investor participation

The UAE will announce its national hydrogen strategy for 2050 and 2030 later this month, and will offer private investors the chance to participate, the future energy director of the country's ministry of energy and infrastructure, Nawal Yousif, said March 1.

The national hydrogen strategy will be separate from the revised 2050 energy mix plan, Yousif told S&P Global Commodity Insights on the sidelines of the World Hydrogen MENA conference in Dubai.

The details of the strategy will be released later this month, she said, declining to give the targets for hydrogen until the plan is released. She said one project that is being worked on is windmills for Fujairah, on the UAE's east coast.

The UAE has already spent $43 billion on all kinds of renewables projects, and another $50 billion in 40 other countries including Jordan, she said. The total spend is projected to be $163 billion by 2050 and another $50 billion over the next decade in 70 countries, she said.

The UAE has pledged to reach net zero emissions by 2050, the first country in the Middle East to make such a commitment.

The UAE's renewables power firm Masdar, in which Abu Dhabi National Oil Co. has a stake, plans to produce as much as 1 million mt/year of green hydrogen by 2030 as OPEC's third biggest producer seeks to hit zero emission by 2050.

The development of up to 1 million mt/year of green hydrogen is equivalent to saving more than six million mt of CO2 emissions, ADNOC and Masdar said in a Dec. 8 statement. The UAE is developing projects globally as it seeks to have a 25% global market share in low-carbon hydrogen projects by 2030.

Dubai will host the UN Climate Change Conference (COP28) starting Nov. 30. In October 2022, the UAE signed a partnership agreement with the US to help mobilize $100 billion in investments to develop 100 GW of clean energy projects globally by 2035.

In 2017, the UAE set energy mix targets of 44% clean energy, 38% natural gas, 12% clean coal, and 6% nuclear by 2050 to meet the country's economic and environmental goals. That is now being revised. Dubai's sole utility recently announced that it was switching a coal plant to gas to lower emissions.

NEOM project

In Saudi Arabia, renewables developer ACWA Power is working with Air Products and the futuristic city NEOM for an $8.5 billion green hydrogen project. Financing agreements were signed by the NEOM Green Hydrogen Co. (NGHC) with a financing consortium for the project, Air Products said March 1 in a statement to the Saudi exchange.

NGHC is a joint venture between ACWA Power, with a 33.3% stake, Air Products and NEOM Co., it said.

The NEOM green hydrogen project includes development, financing, design, engineering, completion, ownership, operation and maintenance of a green hydrogen and green ammonia facility in the NEOM region of Saudi Arabia, with a 30-year green ammonia offtake contract with Air Products.

Funding includes $1.5 billion from the kingdom's National Development Fund on behalf of National Infrastructure Fund, and $1.25 billion from the Saudi Industrial Development Fund, ACWA Power said. The remainder is from First Abu Dhabi Bank, HSBC, Standard Chartered Bank, Mitsubishi UFJ Financial Group, BNP Paribas, Abu Dhabi Commercial Bank, Natixis, Saudi British Bank, Sumitomo Mitsui Banking Corp., Saudi National Bank, KFW, Riyad Bank, Norinchukin Bank, Mizuho Bank, Banque Saudi Fransi, Alinma Bank, APICORP, JP Morgan, DZ Bank, Korea Development Bank and Credit Agricole, ACWA Power said.

"The market is huge, we need to go after this," Andrea Lovato, global head of hydrogen at ACWA Power, told the Dubai conference. The NEOM project will produce 200,000 mt/year of hydrogen, or 600 mt/day, by 2025, while global demand is projected to be 520 million mt/year over the next 20 years, he told S&P Global. "We're going to need a lot of NEOM projects to meet the demand," he said.