The 'fuel of the future': Arab states race to invest in ammonia and green hydrogen

The pursuit of green hydrogen projects in Arab countries as a clean source of energy is an important step towards reducing reliance on fossil fuels and addressing the climate crisis.

The Arab region benefits from favourable conditions for hydrogen production, including abundant sunshine and vast winds. These conditions make the region well-suited for renewable energy projects, such as solar and wind farms, which can be utilised to produce green hydrogen through electrolysis.

By investing in green hydrogen, Arab countries are aligning themselves with the global efforts to transition to clean and renewable energy sources, as outlined in the Paris Agreement.

This international agreement aims to limit global warming and reduce greenhouse gas emissions to mitigate the impacts of climate change. Arab countries' commitment to green hydrogen production has contributed to the goals of the Paris Agreement and plays a role in combating climate change.

"The UAE aims to achieve net-zero emissions by 2050, while Saudi Arabia has set a goal for 2060 and is planning a large-scale green hydrogen project in NEOM City. Morocco has invested $13 billion to produce one million tonnes of ammonia by 2026"

The hosting of major climate events like COP in the Arab region highlights the region's seeming willingness to address climate change and find sustainable solutions. These events bring together countries from around the world to discuss and negotiate climate-related policies and actions, making them crucial platforms for international collaboration and progress.

Egypt hosting COP 27 in 2022 and the UAE hosting COP 28 in 2023 is a testament to this dedication.

Moreover, the pursuit of green hydrogen projects in the Arab region aligns with the goals of these climate events and further emphasises the region's dedication to sustainable solutions. Green hydrogen, produced from renewable energy sources, offers a viable alternative to fossil fuels and contributes to reducing carbon emissions.

Additionally, the export potential of hydrogen to neighbouring markets in Asia and Europe presents economic opportunities for the Arab countries involved in green hydrogen production.

Arab countries are sending a strong message about their readiness to take on leadership roles in the transition to a more sustainable future.

These efforts not only contribute to mitigating the impacts of climate change but also position the Arab region as an important player in the global clean energy market.

Biggest Arab Investors 

Jauad Al-Kharraz, the Executive Director of the Regional Centre for Renewable Energy and Energy Efficiency (RCREEE), explained to The New Arab that several Arab countries, including Morocco, Algeria, Egypt, Saudi Arabia, Oman, Mauritania, and the UAE, are actively embracing the green hydrogen era and have set ambitious targets.

"The UAE aims to achieve net-zero emissions by 2050, while Saudi Arabia has set a goal for 2060 and is planning a large-scale green hydrogen project in NEOM City. Morocco has invested $13 billion to produce one million tonnes of ammonia by 2026."

In May 2023, the Saudi NEOM Green Hydrogen Company (NGHC) announced the completion of the financial closure phase for the world's largest green hydrogen production plant.

The project, with an investment of $8.4 billion, received financial agreements from various local, regional, and international banks and investment companies. The plant is being built in the city of "Oxagon" within the "NEOM" city.

"The recent warning from the Intergovernmental Panel on Climate Change (IPCC) serves as a reminder to align with the targets set by the Paris Agreement and transition away from fossil fuels, which contribute to greenhouse gas emissions"

During COP27 in 2022, the Egyptian government signed agreements with international partners, including a collaboration between Egypt's Hassan Allam Utilities and the UAE's "Masdar" company for clean energy.

The agreements aim to develop green hydrogen production facilities in the Suez Canal Economic Zone and along the Mediterranean coast. The zone has also received proposals from Danish, German, and Norwegian firms to establish green hydrogen projects.

Hesham Eissa, an environmental expert, explained to The New Arab how Qatar - one of the world's leading producers of natural gas - has also shown interest in green hydrogen and is currently exploring opportunities to produce hydrogen from renewable sources, including solar and wind. 

Kuwait is also considering investments in renewable energy and has expressed interest in green hydrogen as a potential solution to reduce its carbon footprint.

Finally, Oman is actively involved in exploring green hydrogen projects. The country has partnered with international companies to develop hydrogen production facilities and has demonstrated its commitment to renewable energy and hydrogen technology.

The fuel of the future

The recent warning from the Intergovernmental Panel on Climate Change (IPCC) serves as a reminder to align with the targets set by the Paris Agreement and transition away from fossil fuels, which contribute to greenhouse gas emissions.

Industries that are particularly challenging to electrify, such as aviation, marine shipping, and heavy industrial sectors, may find a viable solution in electrolytic hydrogen, which offers a clean and emissions-free alternative.

The Paris Climate Agreement was adopted in 2015 with the objective of limiting the global average temperature increase to well below 2°C above pre-industrial levels and striving to keep it within 1.5°C above pre-industrial levels. This agreement highlights the critical importance of taking immediate action to mitigate climate change and avoid the most severe consequences of global warming.

In a series of articles, Rachel Fakhry, Energy and Climate Policy Analyst at the Natural Resources Defence Council, said that there are different kinds of hydrogen such as Grey hydrogen which is produced by steam methane reformation; Blue hydrogen which is produced by steam methane reformation but a portion of the carbon emissions are captured and either sequestered or utilised; Pink hydrogen which is produced if the electricity used to split water into hydrogen and oxygen is sourced from a nuclear plant.

The fourth and most popular kind of hydrogen is Green hydrogen, which is produced when renewable (wind, solar, hydro) electricity is used to split water into its constituents, hydrogen, and oxygen. The hydrogen production process is zero-carbon and air pollution-free, explained Rachel.

"Investing in green hydrogen does not detract from other adaptation solutions, such as the circular economy and water management"

According to Jauad, the trend of green hydrogen is driven by the commitment to global climate targets and the urgent need to decarbonise industrial and economic sectors. He emphasises the importance of investing in green hydrogen and reducing its cost to make it more affordable, thereby contributing to international efforts in combating climate change.

"Investing in green hydrogen does not detract from other adaptation solutions, such as the circular economy and water management." Jauad went on to suggest that both approaches should work in parallel, recognising the importance of multiple strategies to address climate change.

Green hydrogen not only aligns with the developmental needs of Arab countries but also contributes to the goals of mitigating climate change. The growth of green hydrogen can synergistically complement other climate solutions, rather than divert attention from them.

Hesham explained that while green hydrogen is receiving significant attention and investments, "it is just one part of a broader portfolio of climate solutions." He stresses the necessity of collective efforts and investments in multiple technologies and strategies to effectively tackle climate change and achieve sustainable results.

Arab’s energy hub 

Both experts The New Arab interviewed detailed the potential of the Arab region to emerge as a prominent energy hub for green hydrogen and ammonia.

This potential stems from the region's advantage of having the lowest electricity prices derived from renewable energy sources, with solar and wind energy offering substantial potential in particular.

The geographic location of the Arab region is advantageous due to its proximity to the European market, which is one of the most ambitious markets for green hydrogen, especially Germany.

Jauad pointed out the existing connections between the region and the European market, such as pipelines linking Morocco and Spain, Tunisia and Italy, as well as Egypt and Cyprus with Greece. Additionally, the extensive coastlines of Arab countries serve as a valuable asset for supplying the necessary desalinated water for green hydrogen and ammonia production.

Moreover, Hesham underscored the role of investing in green hydrogen and ammonia in generating new employment opportunities and attracting investments in related industries. He further highlighted the potential to stimulate local manufacturing and develop supply chains, fostering economic growth and technological advancements within the region.

Mohammed El-Said is Science Editor at Daily News Egypt. His work has appeared in Science Magazine, Nature Middle East, Scientific American Arabic Edition, SciDev and other prominent regional and international media outlets.

Follow him on Twitter: @MOHAMMED2SAID