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Clean hydrogen-related news globally and around the Middle East & North Africa (Mena) region have ramped up in the final weeks of 2020.
These include Canada’s clean hydrogen strategy; the launch of the Green Hydrogen Catapult - a European-Chinese-Australian-Saudi consortium supporting the deployment of renewable energy to produce the carbon-free fuel; as well as the growing support for Saudi Arabia’s $5bn Helios Green Fuels Project.
Notably, topics on green hydrogen remained in the periphery of policies and energy discussions until July this year, when the European Commission published a Clean Hydrogen Strategy followed by the formation of the Clean Hydrogen Alliance.
Not coincidentally, US-based Air Products and Saudi Arabia's utilities developer Acwa Power and Neom signed and announced in July an agreement for the Helios Green Fuels Project, a $5bn hydrogen-based ammonia production facility powered by renewable energy.
The proposed plant will use 4GW of renewable power from solar, wind and storage to produce 650 tonnes of green hydrogen a day using Danish firm Haldor Topsoe’s ammonia technology. The hydrogen will be converted into 3,200 tonnes a day of green ammonia to be transported and then converted back into hydrogen for transport fuel applications.
Based on the initial plan, the Helios Green Fuels Project appears to have anticipated the challenge in every step of the production process as well as the required supply chain for green hydrogen.
In its current phase, the main challenges for clean hydrogen are the most important ones. These include finding a market and how to cost-effectively store and get the product there.
As of now, the main potential market for green hydrogen produced in the Middle East would be the European countries that aim to become net-zero economies.
On 17 December, Abu Dhabi-headquartered International Renewable Energy Agency (Irena) issued a report highlighting the potential of green hydrogen to compete with fossil fuels on cost possibly by 2030, and certainly, before 2040, which is by far the most conservative industry estimate.
However, Irena’s report also stressed that “regulations, market design and the costs of power and electrolyser production are still major barriers to the uptake of green hydrogen”.
Save the cost of renewable electricity, these are the same limitations that the Middle East will have to contend with if green hydrogen is to play a significant role in its clean energy transition.
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