Emirate Positioned to be a Global Hydrogen Industry Leader
By Andrew Baird
The hydrogen strategy of the United Arab Emirates has moved forward through the announcement at COP26 of a new Hydrogen Leadership Roadmap, which demonstrates the UAE’s ambition to be a global market leader in the hydrogen industry.
The UAE Hydrogen Roadmap forms a blueprint for achieving three main aims:
1. Contributing towards the UAE’s net-zero ambition. As one of the world’s highest per capita energy consumers, the UAE’s commitment to net zero by 2050 is ambitious. The UAE’s hydrogen strategy is expected to form a key part of its net zero strategy.
2. Providing support to domestic low-carbon industries. While the UAE is well-positioned to be a leader in the production of blue and green hydrogen, it will need to collaborate internationally if its aims are to be achieved, and in particular in relation to green hydrogen which, while not yet fully developed from a technology perspective, will play a significant role in the strategy required to meet the target.
3. Establishing the UAE as a competitive exporter of hydrogen. The UAE plans to be a significant producer and exporter of hydrogen and has targeted a 25 percent market share in key export markets, albeit without clearly identifying the exact markets or the timeline.
The implementation of the UAE Hydrogen Roadmap will have a number of side effects, notably generating value through the export of low-carbon hydrogen and related products; decarbonizing existing industries, for example the steel industry; and developing new industry opportunities, such as the production of sustainable kerosene.
In addition to its US$163 billion investment program for the hydrogen industry, the UAE will put in place certain “enablers” to support the hydrogen industry as follows:
• Access to “green” financing domestically and internationally – it remains to be seen exactly how this will manifest itself.
• A clear regulatory framework – this is obviously essential for the development of the industry in a properly regulated and orderly manner, and on the basis of a level playing field.
• Best-in-class technology – there has been a significant investment made in local research and development and the UAE will clearly want to promote that further. In particular there is a clear desire to promote the forging of international partnerships more at a corporate level.
• Access to existing and new government-to-government relationships – for example, the UAE/German Hydrogen Partnership.
• Readily available land and infrastructure resources – the UAE has access to significant tracts of land to locate, for example, solar power generating facilities which will enable green hydrogen production.
There is much detail to be completed here of course, and there will no doubt be some devil in that detail, but it will be important to ensure that these “enablers” all work together and transparently.
The UAE Hydrogen Roadmap also highlights a number of existing projects that have been completed or are in development, including a green hydrogen production facility, a blue ammonia production plant, a green hydrogen demonstration plant (initially for road transport, then expanding to e-kerosene synthesis and ocean shipping), a UAE hydrogen hub in collaboration with BP, a green ammonia project, a large-scale green hydrogen-powered steel production project and the sale of various test cargoes of blue ammonia. This is just a snapshot of some projects that are now under way, and we expect to see the deal count accelerate as the strategies are implemented.
The UAE is already incredibly well-positioned to be a leader in the hydrogen industry, given it has a number of in-built competitive advantages for blue and green hydrogen production. While the whole industry remains in its infancy, the UAE Hydrogen Roadmap is a significant step forward, both in substantiating the UAE’s hydrogen ambitions, and in coordinating the efforts of the public and private sectors to develop the hydrogen industry.
Andrew Baird is a partner in the Dubai office of Watson Farley & Williams.
He authored a previous article, “Hydrogen in the UAE,” which can be viewed at https://www.wfw.com/articles/hydrogen-in-the-uae/.