The Middle East is moving towards a faster and more important position on the global green hydrogen production map, especially with the adoption of the establishment of a new economic corridor starting from India and reaching Northern Europe. A recent international report forecasts the future of the industry and confirms the region's ability to double the planned clean hydrogen production on an annual basis, with the first large production projects getting the start signs in preparation for the export race by 2030.

As part of its plan to produce clean and renewable energy, the Arab region today has 83 projects producing hydrogen and ammonia with a combined production of nine million  tonnes annually, from only 37 projects with a capacity of 4.2 million tonnes in October of last year, according to data from Standard & Poor's Commodity Insights. This means the possibility of increasing investments in this field, especially since hydrogen production projects and its derivatives represent the largest share of announced hydrogen investments in Arab countries, since a large number of them are designated for export purposes.

Oil-producing countries, such as Saudi Arabia, are betting strongly on this industry, according to Ashwani Dudega, head of the business sector at the Clean Energy Solutions Group (CESI). His vision is for the company to produce green hydrogen and ammonia.

The region's greater ambitions were reflected in the G20's announcement on September 9 of a planned economic and trade corridor that includes hydrogen pipelines across India, the Middle East and Europe. This corridor will be the most direct link to date between India, the Arabian Gulf and Europe, along with a railway line that will make trade between India and Europe 40 per cent faster, and a power cable and green hydrogen pipeline to boost clean energy trade.

New commercial corridor

In Cairo, Khaled Naguib, Chairman of the Board of Directors of Egyptian-based green hydrogen production company, Hydrogen Egypt, is betting on Saudi Arabia's prime location to establish a headquarters for his company. Naguib says that the goal is to take advantage of Saudi Arabia's location since it is perfectly situated to cover the needs of the Asian continent, while his company in Egypt will work to cover part of the needs of the European continent, through pipelines to store and transport green hydrogen.

Naguib believes in the region's growing potential as a leading producer of clean and renewable energy. He believes companies based in the Middle East, especially Egypt, will cover a very large portion of what Europe needs from green hydrogen. Naguib believes that Egypt alone can meet about 30 per cent of European demand, at three million tonnes, out of 10 million that Europe imports from abroad every year. But this production capacity will need huge investments to be pumped into the sector, he adds.

The Standard & Poor's report points out that the Middle East has already begun to ship its production, especially since the Saudi Arabian Mining Company (Ma'aden) shipped blue ammonia to China last May, as part of an agreement to export 25,00 tonnes of clean fuel to the Xinghong company, for petrochemicals.

The world's largest factory for producing clean and renewable energy

These ambitions are evident in the construction of the largest factory in the world for the production of clean and renewable energy in Riyadh, Saudi Arabia. In the city of Oxagon, NEOM's port, in the north of the country, Saudi Arabia also has the largest electricity network in the region, which allows it to exchange electrical energy with other countries in the region. Saudi Arabia wants to transform the global energy market.

A hydrogen analyst at Standard & Poor's, Matthew Hodgkinson, believes there is a lot of export activity in the Middle East. This is demonstrated by experimental shipments of clean ammonia.

Saudi NEOM project

Saudi Arabia is also aiming for NEOM to produce hydrogen. (NEOM is a huge urban development project in the country's north). The report notes that the project succeeded in achieving financial closure during the first quarter of 2023. About 23 banks and investment companies provided financing worth USD8.4 billion for the project, which aims to produce 240,000 metric tonnes annually of renewable hydrogen by the end of 2026.

During the past year, nine hydrogen production projects in the Middle East with a capital of USD50.02 billion received final investment decisions, according to Standard & Poor's Hydrogen Database.

Standard & Poor's is optimistic about the Middle East's potential. It expects the region to produce about 18.15 million metric tonnes of hydrogen by 2030, and export 1 million metric tonnes of low-carbon, mostly renewable hydrogen. The agency also expects that, by 2040, the region will be ahead of all others in terms of hydrogen production. It is estimated to reach 28 million metric tonnes of clean hydrogen, with exports amounting to 6.28 million tonnes.

Photo: Oil-producing countries in the Middle East are betting strongly on hydrogen  (by Adobe)