"The Gulf countries aspire to lead the global hydrogen market," says expert Karim El-Gendy from the London-based Chatham House. In a report by Agence France-Presse (AFP), Karim adds: "The Gulf countries see green hydrogen as essential because it allows them to remain major powers in the field of energy and to maintain their influence as demand for fossil fuels declines."

Unlike hydrogen, which is produced from polluting fossil fuels and is still widely used, green hydrogen is produced from water using renewable energies such as wind, solar, and hydropower. This clean fuel, which accounts for less than one percent of total hydrogen production, is not yet viable for commercial use and requires a massive increase in renewable energy sources,  according to a report by AFP. But the report also says the process could take years,

While fossil fuels produce greenhouse gases, green hydrogen emits only water vapour and is promoted for use in the most polluting sectors such as transportation, shipping, and steelmaking.

Saudi Arabia is a leader in exports

Thanks to its availability of massive investment capital, Saudi Arabia, the world's largest oil exporter, is building the world's largest green hydrogen production plant in the futuristic megacity of NEOM in the northwest of the kingdom. This city will cost USD 500 billion.

The green hydrogen production plant, which cost USD 8.4 billion, will combine wind and solar energy to produce up to 600 tonnes of green hydrogen per day by late 2026, according to Saudi authorities.

In July 2023, the UAE, which hosted the UN climate conference COP28 a year earlier, approved a hydrogen strategy to produce 1.4 million tonnes of hydrogen annually by 2031, making it one of the top 10 hydrogen-producing countries. "Hydrogen will be a key fuel for the transition to clean energy," said Hanan Balalaa, vice president of the UAE's state-run oil giant ADNOC, describing it as a "natural extension" of the company. "The UAE is well positioned to benefit from it," she told AFP.

However, Oman, which lags behind its neighbours in fossil fuel production, appears poised to lead the clean hydrogen race in the Gulf Cooperation Council (GCC) countries. By the end of the decade, Oman will become the world's sixth-largest exporter of green hydrogen and the largest in the Middle East, according to a report by the International Energy Agency published in June.

The Sultanate aims to produce at least 1 million tonnes of green hydrogen annually by 2030 and up to 8.5 million tonnes by 2050, "which would be larger than the current total demand for hydrogen in Europe," according to the International Energy Agency.

According to the financial giant Deloitte, Middle Eastern countries, primarily the Gulf countries, will lead the global hydrogen trade in the short term by exporting half of their local production by 2030. By 2050, North African countries and Australia are expected to be the leading producers, although the Gulf countries will remain the leading exporters, according to a report by the company issued in June 2024.

The road is still long

Investment in green hydrogen has not prevented the expansion of oil and gas projects, as the UAE and Saudi Arabia plan to develop their hydrocarbon industries. Experts expect that it will take years for the Gulf countries to be able to produce green hydrogen at a cost competitive with fossil fuels. While renewable energy costs have fallen,  thanks to technological advances, green hydrogen cannot yet be produced profitably.

"Gulf countries will focus on maximising hydrocarbon sales for as long as possible," says Aisha Al-Sarihi, a research associate at the Middle East Institute at the National University of Singapore. "It will take years of trial and error for green hydrogen to become a commercially viable commodity," she says, noting, "it could be the new fuel of the future" once the technology matures and costs fall.

While demand for hydrogen remains unclear, Gulf countries have long supplied energy to Asian countries that rely on imports, such as Japan and South Korea, plan to use green hydrogen in their decarbonisation strategies.

UAE Minister of Climate Change and Environment Abdullah Al-Nuaimi warns that hydrogen transport infrastructure is not sufficient and will require huge investments to retrofit it. "The time required to address the challenges that hinder the production of green hydrogen is very long," Al-Nuaimi told AFP.

Photo: A hydrogen production plant powered by renewable energy sources. (by Adobe)