As the global energy landscape shifts toward cleaner and more sustainable sources, the Gulf Cooperation Council (GCC) countries are positioning themselves as key players in the green hydrogen economy. The rapid shift towards green will be efficient for the GCC countries due to low-cost solar energy and high hydrogen production will provide Gulf nations with opportunities to diversify its economies, reduce carbon emissions, and maintain a leadership role in global energy markets.
Why Is Green Hydrogen Necessary For GCC?
Green hydrogen is crucial for the GCC as it offers a sustainable path for economic diversification, decarbonisation goals and energy export potential. Historically, the economies of GCC nations have been heavily dependent on oil and gas exports. However, as the world moves towards decarbonization, there is a growing need for these countries to diversify their economic activities. Green hydrogen allows the GCC to create a new revenue stream while leveraging its expertise in energy production and export infrastructure. According to the International Energy Agency (IEA), hydrogen could account for 10% of global energy consumption by 2050, and the market for green hydrogen could be worth up to $12 trillion. While the global oil demand may decline in the coming decades, the demand for clean energy sources like hydrogen is expected to grow exponentially.
Many GCC countries have set ambitious carbon reduction targets as part of their national visions. For example, Saudi Arabia’s Vision 2030 includes significant investments in renewable energy, while the UAE has its own “Net Zero by 2050” strategy. Green hydrogen will play a crucial role in these decarbonization efforts, enabling cleaner industrial processes, transportation, and energy storage solutions.
Projects Shaping the New Energy Era
Several large-scale green hydrogen projects are underway in the region, highlighting the GCC’s commitment to developing this industry.
- NEOM, Saudi Arabia: Saudi Arabia is in charge of its flagship green hydrogen project in the futuristic city of NEOM. In partnership with Air Products and ACWA Power, the $5 billion facility will use 4 GW of renewable energy to produce 650 tons of green hydrogen per day by 2025. The project aims to position Saudi Arabia as a global hub for green hydrogen production, with plans to export ammonia-based hydrogen to international markets.
- Masdar, UAE: The UAE has also announced its plans to become a major player in the green hydrogen market. Masdar, the Abu Dhabi Future Energy Company, is exploring the development of a $5 billion green hydrogen project, which will use solar energy to produce hydrogen at a competitive cost. The UAE has set a target to produce 25% of its hydrogen from green sources by 2030.
- Oman Hydrogen Alliance: Oman is emerging as a dark horse in the race for green hydrogen dominance. The Oman Hydrogen Alliance, formed by the Oman Investment Authority (OIA) and other stakeholders, aims to establish a hydrogen economy that contributes to the country’s economic diversification efforts. Oman’s Duqm port is set to become a hub for hydrogen exports, with several projects focusing on producing green hydrogen from renewable energy.
GCC’s Gateway To A Sustainable Economy
Despite challenges of high initial cost, water scarcity, and more, the GCC’s green hydrogen economy is poised for growth. Governments in the region are making substantial investments in infrastructure, research, and partnerships to ensure that they remain at the forefront of the hydrogen revolution. Moreover, the transition to green hydrogen aligns with the broader goals of reducing reliance on fossil fuels, achieving economic diversification, and positioning the GCC as a global leader in clean energy.
According to Masdar, the GCC could generate revenues of up to $200 billion annually by exporting green hydrogen to Europe, Asia, and other regions by 2050. Moreover, according to REPORTS AND DATA, as technology advances, the cost of green hydrogen could drop by 50% by 2030, making it a competitive alternative to traditional energy sources.
By investing in renewable energy infrastructure, pursuing ambitious hydrogen projects, and overcoming key challenges, the region is becoming a global hub for green hydrogen production. The rise of the green hydrogen economy offers the GCC a pathway to maintain its leadership in the global energy market while contributing to the fight against climate change.
