Oman’s green hydrogen ambitions are entering a new phase as state-owned sector developer Hydrom introduces sweeping incentives to attract investors ahead of its third auction round.
The package responds to investor feedback from a recent market sounding exercise and reflects a global shift in hydrogen project economics, where high capital costs and policy competition are reshaping investment flows.
The incentives target early-stage financial bottlenecks that have slowed progress toward final investment decisions (FIDs). Land lease fees during the development phase will be cut by 90%, with additional relief possible during front-end engineering design (FEED) work. Base royalties in the initial years of production will be significantly reduced, and qualifying projects could secure corporate tax exemptions for up to a decade. According to Hydrom, these measures are designed to improve internal rates of return (IRRs) and shorten the time between project award and construction start.
The third auction, launched in April, offers developers a land block of up to 300 km² in the Duqm special economic zone, with bids required to cover at least 100 km². The request for qualification (RfQ) window closes on October 31. Hydrom reports that more than 100 registrations have already been submitted, spanning major industry players and consortia active across the hydrogen value chain — a sign that Oman’s policy recalibration may be drawing renewed interest despite tightening competition from markets such as Saudi Arabia, the UAE, and Australia.
Oman has awarded eight green hydrogen projects to date, spread between Duqm and Dhofar, with combined output potential of around 1.38 million tonnes per year by 2030. Yet, no projects have reached FID, with the first expected between 2026 and 2027, according to Energy Minister Salim Al Aufi. The timeline reflects the long lead times and financing hurdles common in large-scale hydrogen ventures, where offtake agreements, technology selection, and infrastructure integration remain decisive factors.
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