Sovereign funds and government entities in the Gulf states and Egypt are collaborating with international energy firms, pouring billions of dollars into the development of green hydrogen plants.
As the lightest and most abundant element in the universe, hydrogen offers versatile applications, including fuel combustion, energy storage, and industrial processes. Green hydrogen, produced using renewable electricity to split water into hydrogen and oxygen, is a carbon-free alternative to traditional hydrogen production methods.
While cost remains a significant challenge, a European Investment Bank report predicts that green hydrogen could achieve price competitiveness with conventional hydrogen by 2030. Countries like Saudi Arabia and the United Arab Emirates (UAE) are embracing green hydrogen as a critical component in their commitments to achieving carbon neutrality. Saudi Arabia, for instance, is constructing the world’s largest green hydrogen plant, with an annual production capacity of 219,000 tonnes. The project’s cost has increased to $8.5 billion from an initial estimate of $5 billion.
Saudi Arabia’s NEOM Green Hydrogen Company, a joint venture between state-owned NEOM, U.S. company Air Products, and Saudi Arabia’s ACWA, aims to start hydrogen production in 2026. The project is expected to mitigate 5 million metric tonnes of carbon emissions annually. In the UAE, Abu Dhabi National Energy Company (TAQA) plans to produce green hydrogen for manufacturing green steel in partnership with Emirates Steel. TAQA has also signed a memorandum of understanding with Japan’s JERA to develop thermal power and other green energy projects in the Middle East.
Masdar, another Abu Dhabi government entity, envisions producing up to 1 million tonnes of green hydrogen annually by 2030. It has formed joint venture projects with various partners to establish Abu Dhabi as a global hub for hydrogen production and export. Additionally, Masdar is collaborating with Etihad Airways, Siemens Energy, TotalEnergies, and others to develop green hydrogen for sustainable aviation fuels. The company is involved in the construction of a 200 MW green hydrogen plant in Abu Dhabi and co-owning a 2,000 MW offshore wind and green hydrogen project in Azerbaijan.
Egypt is also actively pursuing green hydrogen projects, signing several deals with foreign firms to develop green hydrogen facilities and aiming to become an export hub for the gas. The European Bank for Reconstruction and Development (EBRD) is providing $80 million to support the construction of Egypt’s first green hydrogen plant with a 100 MW electrolyzer capacity. Energy China is set to build a green hydrogen plant in Egypt with an annual capacity of 140,000 tonnes.
Oman is joining the green hydrogen race with the launch of Hydrom, aiming to produce 1 million tonnes of green hydrogen annually by 2030. The country has extended the deadline for bids to construct its first green hydrogen plant and plans to announce the winners in April.
In addition to green hydrogen, Saudi Arabia is exploring geothermal energy, aiming to have 1,000 MW of geothermal electricity capacity by 2040. The country has significant geothermal energy resources, particularly along its Red Sea coast, due to high subterranean heat-flow from volcanic fields.
The investments in green hydrogen and geothermal energy across the Gulf states and Egypt demonstrate a strong commitment to transitioning towards sustainable energy sources. These initiatives have the potential to reduce carbon emissions, create new economic opportunities, and position the region as a global leader in renewable energy production.
