A recent report from the International Energy Agency (IEA) reveals that Oman’s abundant renewable resources and expansive land areas could make it a formidable low-emissions hydrogen supplier by 2030.
The country’s potential in producing substantial amounts of low-emissions hydrogen aligns with its aim to diversify export revenues, reduce natural gas consumption, and lower emissions. IEA Executive Director Fatih Birol presented the report, titled “Renewable Hydrogen from Oman: A Producer Economy in Transition,” to Oman’s Minister of Energy and Minerals, Salim Al Aufi, during a roundtable meeting in Paris.
Oman’s target is to produce a minimum of 1 million tons per year (tpy) of renewable hydrogen by 2030, which could increase to 3.75 million tpy by 2040 and 8.5 million tpy by 2050. The 2040 hydrogen target alone would represent 80% of Oman’s current liquefied natural gas (LNG) exports in terms of energy-equivalence. If the 2050 target is achieved, it would nearly double their current LNG exports.
Dr. Birol commended Oman for its forward-thinking energy approach, emphasizing the country’s clear long-term vision and strong net-zero ambitions. He stated, “Thanks to its huge potential for low-cost solar and wind, renewable hydrogen is set to bring multiple benefits to Oman. The IEA is very pleased to be working with Oman on policy and technical matters as the country moves ahead on its journey to a net-zero economy and shows other producer countries what is possible.”
Minister Al Aufi highlighted that while Oman is traditionally known for its oil and gas production, the country is also blessed with globally competitive solar and wind resources. He expressed that leveraging these resources for sustainable energy production, including decarbonizing power generation, local industry, and hydrogen exports, is the most viable and sustainable path for Oman’s energy future.
Oman’s current energy landscape heavily relies on oil and gas, accounting for around 60% of its export income and over 95% of electricity generation. In 2022, Oman set a target to achieve net-zero emissions by 2050 and initiated efforts to reduce fossil fuel usage in its domestic energy mix. Based on the IEA’s analysis of global hydrogen projects, Oman is on track to become the sixth-largest global exporter of hydrogen and the largest in the Middle East by 2030.
The production of hydrogen in Oman will utilize electrolyzers powered by renewable electricity, extracting hydrogen from desalinated seawater. The country benefits from excellent solar photovoltaic (PV) and onshore wind resources, as well as ample available land for large-scale projects. Oman’s strategic location along major market routes between Europe and Asia, coupled with existing fossil fuel infrastructure that can be repurposed for low-emission fuels, further enhances its potential as a hydrogen producer. The country’s expertise in handling and exporting LNG and ammonia is directly transferable to renewable hydrogen and hydrogen-based fuels.
Oman is actively implementing measures to achieve its ambitious targets. The government established Hydrogen Oman (HYDROM), an independent entity responsible for leading and managing the hydrogen strategy. The country has allocated 1,500 square kilometers of land for development by 2030, with potential for up to 40 times more land for future production. Six projects have already secured land through Oman’s first auction process for renewable hydrogen.
Initially, Oman is likely to transport its renewable hydrogen exports in the form of ammonia. While the country already exports around 200,000 tpy of ammonia, increasing its ammonia export capacity by 20 to 30 times by 2030 is necessary to become a significant international hydrogen supplier within that timeframe. This would require significant investment, particularly in storage tanks and dedicated deepwater jetties.
Meeting Oman’s hydrogen targets will necessitate a significant expansion of renewable power, with approximately 50 terawatt-hours (TWh) of electricity required to meet the 2030 target. This is greater than the current capacity of Oman’s entire electricity system and is expected to accelerate cost reductions and benefit the country’s power system. Based on recent bid prices in the region, utility-scale solar PV and wind are already likely to be cost-competitive with natural gas-generated electricity in Oman. The IEA report indicates that Oman can achieve its targets cost-effectively, with renewables accounting for 20% of the country’s electricity mix by 2030 and 39% by 2040.
Scaling up renewable hydrogen production in Oman to 1 million tpy by 2030 would necessitate a cumulative investment of approximately $33 billion. An additional $4 billion would be required to achieve a 20% share of renewables in the national electricity mix. Meeting these targets and utilizing one-third of the renewable hydrogen domestically would significantly contribute to Oman’s clean energy transition, including a reduction in natural gas usage by 3 billion cubic meters per year and avoidance of 7 million tons of carbon dioxide (CO2) emissions.
