Finding the right mix will position the Middle East as global leader in hydrogen

Energy consumption and economic growth are inextricably linked. As our world grapples with population growth and the challenge of reaching net zero, while simultaneously recovering from the economic shockwaves of the pandemic, a great deal of work lies ahead. Be it our economy, our communities or our environment, the long-term success of our world depends on the transition to greener energy sources.

Trillions are expected to be invested into renewables in the next 10 years. This means energy-based economies face a race against time to position themselves as the leading global exporter of green energy. With the right decision-making and investment, this is a race where the GCC countries would be in the pole position to win.

Boasting a long-standing energy economy, established supply chains, a skilled workforce and ambitious leadership, Middle Eastern countries have the potential to totally reshape the global energy landscape. But this can only be achieved by playing the lead role in global hydrogen production. It has even been estimated that by 2050 green hydrogen export could create up to one million jobs and generate up to $200 billion for the region. Evidently, becoming the world’s biggest exporter of hydrogen is a huge prize. 

However, establishing an export-scale green hydrogen industry won’t happen overnight. Growth must be steady and purposeful to meet an expected rising demand.

With the clock ticking on achieving ambitious net zero targets and a highly complex global energy transition in the offing, it is by no means certain that green hydrogen can grow quickly enough.

Creating the physical and digital infrastructure, not to mention delivery mechanisms to meet demand, is a huge challenge and will take some time, even in a region as agile and ambitious as the GCC. Therefore, building an understanding of the role that blue hydrogen will play is critical too.

To enable a swift energy transition towards a decarbonized future and meet rapidly accelerating demand, both green and blue hydrogen production must be pursued by industry – at least in the near term.

Blue hydrogen is made using either steam methane reforming (SMR) or autothermal reforming (ATR) with natural gas as the only feedstock. While this option does produce carbon, it can be installed with a carbon capture and storage unit. This prevents harmful emissions from polluting the atmosphere by storing the unwanted carbon safely underground in petroleum reservoirs that have trapped natural gas for millennia.

Green hydrogen, on the other hand, is made from splitting water using an electrolyser powered by renewable energy, thus avoiding carbon production – and the need for capture, sequestration and storage – altogether.

Clearly, the long-term solution to meet the growing demand for energy, while simultaneously driving down carbon emissions, lies with green hydrogen. But with blue hydrogen evidently being easier and cheaper to produce at this moment in time, leveraging both variations may prove to be the ideal interim step needed.

Not only does this provide a clear pathway to net zero through hydrogen, but it would also mean that Middle Eastern countries could be first out of the blocks, building supply chains, unlocking new revenue streams and creating export markets early.

Although the race to net zero might seem at odds with the region’s traditional economic heartlands of oil and gas, a new generation of industrial end-user and domestic consumer is on the horizon. Scaling up to meet this demand today could well mean that GCC countries lead the way in energy export for generations.  

Building an open, efficient and globally integrated business environment is of paramount importance. It will speak to the enormous potential that a locally grown hydrogen industry has for the wider region.  

Becoming the world’s largest net exporter of hydrogen is a huge task. It will require new infrastructure capable of supporting economic growth alongside a skilled, stable workforce.  

Yet, the GCC has a unique opportunity to set this emerging industry up for success, right at the outset, by applying lessons learned from the long-established oil and gas sector, and emerging blending technologies to lessen the carbon burden.  

Developing large-scale production and distribution of green and blue hydrogen is within the region’s reach. The key to success is to move quickly, invest smartly and play to existing strengths. Only then, could the Middle East well become the dominant force in global clean energy for generations to come.