Whereas Saudi Arabia continues to develop its oil business, it isn’t shying away from different power choices, with state-owned Aramco now closely investing in hydrogen know-how.
Saudi Arabia nonetheless leads the world in oil manufacturing and exports however following an Worldwide Power Company (IEA) report earlier this yr and up to date investor stress to undertake greener practices and embrace renewable options the nation is seeking to develop its hydrogen business.
Aramco Chief Know-how Officer Ahmad Al Khowaiter defined final week, “As we speak we’re displaying that the applied sciences for using hydrogen are mature and commercially out there… and we see this sort of as an inflection level out there for hydrogen.”
The announcement comes as Saudi Crown Prince Mohammed bin Salman launched a nationwide technique for transport and logistics with the target of accelerating the sector’s contribution to annual non-oil revenues to $12 billion by 2030.
Most present hydrogen tasks nonetheless depend on fossil fuels, which create brown or gray hydrogen. The top product could also be clear, however the manufacturing course of releases a big amount of carbon dioxide into the environment. In distinction, hydrogen created this fashion however utilizing carbon seize (CCS) know-how creates a cleaner product generally known as ‘blue hydrogen’, which is the main target of Saudi Arabia’s efforts.
Aramco, the world’s greatest oil firm, is seeking to construct a market and promote its hydrogen technique as different international locations lag behind, anticipating to ascertain a big buyer base by the tip of the last decade.
Saudi Arabia has already made efforts to make sure its oil manufacturing processes have a low-carbon depth by funding in CCS know-how. This identical know-how is used within the manufacturing of blue hydrogen and means Saudi Arabia is without doubt one of the first international locations to have developed an infrastructure for substantial blue hydrogen manufacturing.
Financial institution of America expects hydrogen to interchange 25 % of all oil demand by 2050. If that prediction proves to be right, then Saudi Arabia is raring to make sure it maintains the identical dominance over hydrogen markets that it at the moment holds over oil markets.
Saudi Arabia can be seeking to develop inexperienced hydrogen from renewables. However Aramco acknowledges it might want to discover methods to scale back prices to make it viable, as inexperienced hydrogen manufacturing is round 5 instances costlier than blue hydrogen.
Wanting ahead, Pennsylvania-based Air Merchandise & Chemical compounds Inc. and Saudi’s ACWA Energy Worldwide are investing $5 billion within the building of a plant within the north-eastern metropolis of Neom, which is able to produce the extra environmentally-friendly inexperienced hydrogen.
This follows the development in Could of the area’s first industrial-scale inexperienced hydrogen plant, powered by photo voltaic power, by Siemens Power and Dubai Electrical energy and Water Authority (DEWA), in neighboring Dubai. Abu Dhabi is predicted to observe in Dubai’s footsteps by constructing a $1 billion inexperienced ammonia and hydrogen plant.
With these investments, Saudi Arabia and the UAE may prepared the ground for blue and inexperienced hydrogen manufacturing and exportation, completely located between European and Asian markets.
Ben Cahill from the Power Safety and Local weather Change Program, on the US-based Heart for Strategic and Worldwide Research, believes that “In the end that is about shifting with the instances and assembly market demand for lower-carbon power.” He went on to say that “Aramco and ADNOC have large absolute emissions — particularly Aramco — however need to scale back emissions depth and decarbonize operations as a lot as they will.”
The race is now on to see if Saudi Arabia can turn out to be a world chief in hydrogen markets simply as it’s in oil markets.
By Felicity Bradstock for Oilprice.com
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