Last Updated on December 23, 2023 by Editor
The Middle East intends to lead hydrogen production since its demand is growing. The outbreak of the pandemic sparked massive attention on clean fuel. Hydrogen is a significant investment for oil companies in the Middle East. The emergence of hydrogen as a preferred energy source coincides with a broader worldwide shift to a carbon-free economy. Oil companies in the Middle East are attempting to establish new partnerships based on greener energies.
Hydrogen has quickly evolved into a decarbonization weapon. The largest oil producer in the world, Saudi Arabia, will be exporting hydrogen due to plenty of resources. Is hydrogen on its way to replacing oil as a source of energy? Saudi Arabia appears to be confident about the situation. Continue reading to explore how Saudi Arabia is leading the way, where hydrogen can be used, and how hydrogen will be shaping the economy and future.
In Saudi Arabia, clean fuel would be a spark for a decarbonized economy. The state has invested $5 billion in green hydrogen production in Neom in collaboration with Acwa Power and Air Products. Saudi Arabia plans to supply hydrogen to Europe through the pipeline. Hydrogen will play a significant role in cutting Saudi Arabia’s emissions and reliance on oil. The 4-gigawatt Neom city hydrogen project will use renewable energy sources to produce hydrogen, which will then be transformed into liquid ammonia.
An Overview of Hydrogen End Uses
The end uses of hydrogen are broad exceptionally, and it will shock you that hydrogen can even be found in lipstick. A significant proportion of hydrogen will be consumed in refining and chemical manufacturing, with a minor quantity contributing to fertilizer production. The balance percentage will be utilized for a variety of production activities. Industries like oil refining, iron and steel, ammonia, methanol, and other chemical industries will use a significant quantity of hydrogen. Additionally, hydrogen will be used in the mobility, centralized energy, and building and microgrid sectors.
Hydrogen as an Economic Engine
The hydrogen economy has a lot of potential for expansion. By 2050, global market growth is estimated at 500 million tonnes for green hydrogen with annual revenue reaching $200 billion during this time, Dii and Roland Berger reported. Dubai is aiming to establish an $11 trillion hydrogen market by 2050, Bader Chaudhry stated. A booming hydrogen economy will require the government to seek out technology partners and significantly increase funding for the sector, according to the banks.
A Glimpse into the Future of Fuel
Can the Middle East assist in lowering the fuel cost since the region has been putting extra effort into becoming a powerhouse of clean energy? Dii and Roland Berger stated that hydrogen costs might drop by 30% to 50% in the Gulf area in the coming years, consequently the state’s billion-dollar investment in hydrogen projects. The Mena area is strategically positioned to take advantage of the increasing hydrogen production. According to Badar Munir Chaudhry, the use of hydrogen as an independent energy source can be commercialized between 2040 and 2050.