Experts, lobbyists, and environmentalists are divided on how environmentally beneficial particular types of hydrogen are and how the substance is utilized to boost the image of energy producers in the hydrogen energy market, which is still developing.
Saudi Arabia is increasing its green and blue hydrogen output. The Kingdom’s massive natural gas reserves, as well as the large amounts of associated gas it generates in conjunction with crude oil, allow it to manufacture blue hydrogen. When gas is reformed and the carbon dioxide byproduct is absorbed, a new type of fuel is created.
Air Products and ACWA Power, a Riyadh-based power producer 50 percent controlled by the Kingdom’s sovereign wealth fund, will jointly own Saudi Arabia’s first green hydrogen plant, which is expected to cost SR19 billion ($5 billion).
The facility will be located in NEOM, a proposed gigacity on the Egyptian-Jordanian border. Production is expected to commence in 2025, and the plant will be fuelled by 4 gigawatts of wind and solar energy.
Saudi Aramco, on the other hand, is exploring manufacturing green hydrogen in order to compete with NEOM and expand Saudi Arabia’s market share in this crucial energy source.
According to Aramco’s chief technical officer Ahmed Al-Khowaiter, the company is looking at synergies between the two sources of hydrogen. He stressed that, at least at today’s solar and wind pricing, the cost of producing blue hydrogen was likely one-fifth of the cost of producing green hydrogen. This would not be an issue in the future, as many analysts predict that green hydrogen would be equally inexpensive in ten years.
Saudi Arabia, as one of the few G20 economies or OPEC members investing extensively in green and renewable energy, will be a prominent player in the hydrogen industry. NEOM seeks to provide a clean source of energy on a large scale using its unique profile of light and wind to convert water to hydrogen.
To put its impact into perspective, this first hydrogen factory will save the globe about 3 million tons of CO2 emissions per year and eliminate smog-forming emissions and other pollutants from nearly 1 million cars. And this is only the beginning.
