Saudi Arabia, traditionally reliant on its oil and gas sector, is making strategic moves toward a hydrogen-centric future.
The research team acknowledges the nation’s significant dependence on the oil industry, constituting 50% of its GDP, 70% of government revenue, and 90% of export earnings. The country launched its National Hydrogen Strategy in 2020, envisioning itself as a key hydrogen exporter. The ambitious Vision 2030 aims to generate 50% of the nation’s electricity from renewable sources by 2030.
Hydrogen in All Its Colors: Strategy and Investments
The researchers scrutinized Saudi Arabia’s hydrogen potential across various technologies, including green, blue, grey, and turquoise hydrogen. The current strategy emphasizes blue hydrogen, generated from natural gas with carbon capture and storage, and green hydrogen, produced using wind and solar electricity. The plan outlines an ambitious goal to produce 1.2 million tons of green hydrogen, catering to 10% of global demand by 2030. Noteworthy investments include a $5 billion green hydrogen-based ammonia production facility in NEOM, a joint venture between Saudi Arabia Public Investment Fund (SAPIF), Power, and Air Products.
To overcome these challenges, the researchers propose a roadmap structured around six main pillars:
- Stable Policy Framework: Develop a comprehensive regulatory framework for hydrogen production.
- Infrastructure Development: Invest in infrastructure for production, storage, and distribution.
- R&D Ecosystem: Establish a robust research and development ecosystem.
- Building Demand: Encourage and stimulate demand for hydrogen.
- Capacity Creation: Develop the capacity for large-scale hydrogen production.
- Cooperation: Foster collaboration among all stakeholders.
With the implementation of these strategic pillars, Saudi Arabia could emerge as a hydrogen exporter between 2030 and 2035. The focus would extend to increasing exports, particularly to Asia and Europe. The researchers advocate for strategic partnerships with countries transitioning to renewable energy, especially those with a substantial demand for hydrogen.
Saudi Arabia stands at the cusp of a historic transformation, balancing its economic stronghold in oil with a visionary leap into the burgeoning hydrogen economy. The journey entails not only technological advancements but a holistic and committed approach to policy, infrastructure, and international collaboration. If successfully navigated, Saudi Arabia’s hydrogen endeavors could reshape its energy landscape and contribute significantly to the global hydrogen market.
