According to the report, the UAE has considerable natural advantages, in addition to its existing infrastructure and production capabilities.
The UAE has the foundations and competitive advantages to become one of the largest and lowest cost producers of low-carbon hydrogen in the world, according to a recently published report entitled ‘The United Arab Emirates’ Role in the Global Hydrogen Economy’.
Authored by Dr Julio Friedmann, a Senior Research Scholar at the Centre on Global Energy Policy at Columbia University SIPA, and Robin Mills, CEO of Qamar Energy and a non-resident fellow at the Arab Gulf States Institute in Washington D.C, the report details the importance of hydrogen as a potential fuel of the future and the UAE’s strong start in leveraging existing assets to position itself at the forefront of the market.
Hydrogen is expected to play a critical role as an enabler of international decarbonisation and sustainable development strategies, and the global transition to lower carbon energy sources. It is predicted to account for as much as 18 percent of global energy demand by 2050, with over 30 countries having released hydrogen roadmaps and more than 228 large-scale projects underway across the hydrogen value chain, according to the Hydrogen Council. Tapping into this emerging demand represents a significant opportunity for global energy players.
In the UAE, Adnoc with its many announcements related to hydrogen and its carrier fuels, demonstrate that progress is already being made. Recently the company announced the sale of three blue ammonia cargos to customers in Japan as well as plans to develop a new one million tonne per annum blue ammonia plant at TA’ZIZ in Ruwais.
The UAE is pursuing a balanced strategy covering both blue and green hydrogen, with blue hydrogen being easier to scale-up and is therefore crucial to supporting the growth of the emerging global market.
Blue hydrogen refers to hydrogen produced from natural gas with the associated carbon captured and stored underground; while green hydrogen refers to hydrogen made from the electrolysis of water with renewable electricity and minimal CO2 emissions. Blue hydrogen is currently lower cost and is considered an important step in the development of the low-carbon hydrogen economy; however, the cost of producing green hydrogen is expected to fall over time.
According to the report, the UAE has considerable natural advantages, in addition to its existing infrastructure and production capabilities for both types of hydrogen. The UAE’s competitive blue hydrogen production is enabled by its abundant and competitive hydrocarbons, existing large-scale hydrogen and ammonia production facilities, and large-scale carbon capture and storage capacities, which Adnoc already possesses and continues to advance.
Adnoc is already a producer of over 300,000 tonnes per year of hydrogen in its downstream facilities, which is predominantly used for industrial purposes. The company has plans to increase its hydrogen production to 500,000 tonnes per annum and is progressing a number of new growth opportunities, particularly in blue ammonia. This includes a new world-scale blue ammonia plant at TA’ZIZ, in Ruwais, and the sale of first blue ammonia trial cargos to customers in Japan.
The UAE’s green hydrogen production efforts stand to benefit from the nation’s excellent solar generation conditions and its low levelised cost of solar electricity. The Abu Dhabi Future Energy Company (Masdar) has launched numerous green hydrogen initiatives including the development of a green hydrogen demonstrator plant in Masdar City in partnership with Siemens Energy, Marubeni, Etihad Airways, Lufthansa Group, Khalifa University of Science and Technology (KU) and the Abu Dhabi Department of Energy (DoE).
The production of both types of clean, low-carbon hydrogen are also further facilitated by the UAE’s strong existing infrastructure and export facilities, central geographic location between key markets, and stable, business-friendly environment, note Dr. Friedmann and Mills in their report.
Hydrogen is an emerging business, it still must address significant challenges in technology, economics, and policy. For the hydrogen economy to take shape sustainably, a nascent market must be developed to give assurance to producers and consumers. Costs must be reduced as project sizes, and their associated financing requirements, increase. This requires partnerships at a government-to-government level, between companies and research institutions, and with companies and end-users.
Fortunately, the UAE has a strong track record of public-private partnerships with both domestic and international entities across the energy, infrastructure, and heavy industry sectors. The formation of the Abu Dhabi Hydrogen Alliance between Adnoc, Mubadala Investment Company (Mubadala), ADQ and the UAE Ministry of Energy and Infrastructure (MoEI) was an important step in what has become a coordinated effort to build the nation’s hydrogen economy.
Earlier this year, in a High-Level Ministerial Session at a virtual Hydrogen Roundtable, Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO, expressed optimism that alongside ADNOC’s existing infrastructure and commercial-scale carbon capture, utilisation, and storage (CCUS) capabilities, it can become a major player in developing the blue hydrogen market.
He revealed that Adnoc was developing a roadmap to create a hydrogen ecosystem to serve both the UAE and the global market. “We are working with our partners, our customers and other parties to create the value chains needed to kick-start the emerging hydrogen market globally.”