Hydrogen has been touted as an energy solution for the future and a leading mitigation technology against climate change. The International Energy Agency, for instance, identifies green hydrogen as one of its “key pillars of decarbonizing the global energy system” while the United Nations Industrial Development Organization has described it as “the fuel of the future.” Among the states of the Gulf Cooperation Council (GCC), hydrogen has come to be seen as central to their energy transition strategy and a means to retain the region’s hegemonic position within global energy relations.
In this context, hydrogen is not a primary energy source, but rather is a means to store and transport energy. As such, whether hydrogen is “clean” depends on the energy source that went into its production. Gray hydrogen is produced from natural gas, blue hydrogen when carbon capture and storage (CCS) is employed, and green hydrogen when renewable energy sources are used. In addition, producing hydrogen using current methods requires approximately nine liters of purified or deionized water to produce one kilogram of hydrogen. In the GCC, where states already heavily rely on desalination for their fresh water needs, hydrogen production may contribute to the environmental impacts associated with desalination and its brine byproducts.
The GCC’s abundance of hydrocarbons and renewable energy sources makes it well placed to become a world leader in hydrogen production. The World Bank has noted the region’s “potential to be a leading producer of green and blue hydrogen,” while forecasts predict that the GCC states’ annual revenues from hydrogen could reach $200 billion by 2050. On top of these geological advantages, it is expected that petrostates will be able to leverage their existing energy infrastructure, technological know-how, and international trade relations as well.
In a bid to capture potential future energy markets and profits, the GCC states have made a flurry of announcements in recent years regarding their blue and green hydrogen strategies. The region’s first industrial-scale green hydrogen project was launched by the Dubai Electricity and Water Authority in 2021. Kuwait’s 2021 white paper “Towards a National Hydrogen Strategy” outlined how it might “carve a competitive position for itself in the energy transition using low-carbon hydrogen.” This is likely to primarily occur through green hydrogen as Kuwait is currently a net importer of natural gas. In 2022, QatarEnergy announced plans to build the world’s largest blue ammonia plant at a cost of over $1 billion. Saudi Arabia’s Circular Carbon Economy framework stresses the importance of hydrogen as a green transition technology, and the country’s flagship project, NEOM, expects to produce 1.2 million tons of green hydrogen when its production facilities come online in 2026. Finally, Oman aims to produce at least 1 million tons of green hydrogen per year by 2030. In June 2023, the Omani hydrogen company, Hydrom, signed three agreements for the development of hydrogen projects in the sultanate worth $20 billion and expected to produce half a million tons per annum.
The GCC states have a comparative advantage in the production of both blue and green hydrogen. While blue hydrogen can piggyback on the region’s hydrocarbon sector, green hydrogen will rely on the development of green energy industries in the Gulf. The goal of the GCC states’ hydrogen strategies appears to be to retain the bloc’s techno-political dominance over global energy markets. Hydrogen is so appealing not only for its green credentials, but also because of its ability to mirror and maintain previous global energy export patterns. In other words, the attraction of hydrogen for the GCC states comes from its material, social, and economic similarities to hydrocarbons.
Though hydrogen tends to reinforce, rather than transform, historic energy geopolitics, this does not mean that hydrogen diplomacy and bilateral relations will not produce new forms of energy geopolitics in the Gulf and globally. Indeed, it appears that its similarity to hydrocarbons makes it more sensitive to geopolitical stresses and transformations. For example, there are signs that Europe will turn to GCC hydrogen as a long-term replacement for Russian oil and gas. The EU-GCC Dialogue on Economic Diversification has held high-profile discussions around the possibility of tying together the GCC states’ hydrogen strategies and the EU’s Green Deal. Meanwhile, a joint feasibility study by RINA, a Genoa-based multinational specializing in, among other things, marine, energy, and real estate, and the Swedish-Finnish company, AFRY, discussed the potential for hydrogen to be transported to Europe by pipeline rather than tanker. The study identified a “potential stable corridor to bring supply and demand together” connecting the Gulf, eastern Mediterranean, and Europe.
If GCC-Europe hydrogen relations have been spurred by Russian aggression, in East Asia GCC hydrogen is seen as a fuel that might both flow along — and grease — the economic linkages created by the Belt and Road Initiative. For instance, in 2022, Saudi Aramco signed a memorandum of understanding with China Petroleum & Chemical Corporation (Sinopec) that committed to cooperation on integrated hydrogen supply chains. At the same time, Saudi Energy Minister Prince Abdulaziz bin Salman held high-level talks with his Chinese counterpart on energy supply and cooperation, including clean hydrogen. It thus appears likely that the top destinations for Saudi and Emirati oil — Japan, China, and South Korea — will become its key hydrogen importers.
The attractiveness of hydrogen for existing hydrocarbons producers comes from its tendency to reinforce, rather than rearrange, historic energy geopolitics. The GCC states have identified hydrogen as a fuel carrier that will allow it to retain its dominant position within the world’s energy landscape. However, this does not mean that hydrogen will necessarily result in global energy security. When it comes to energy, continuity is not stability. Indeed, it appears that its similarity to hydrocarbons, and its lack of technological, geological, and geographic limitations, may make it more sensitive to geopolitical stresses and transformations — whether that be Russian aggression in Europe or China’s vision of a multipolar world. How the GCC chooses to navigate such geopolitical dynamics and their intersections with energy politics will play a not insignificant part in whether hydrogen becomes the global fuel solution its advocates have long promised.
There are signs that the political will is now present to ramp up hydrogen production and for it to play a central role in the GCC — and global — climate mitigation agenda. The United Arab Emirates has placed doubling hydrogen production by 2030 at the top of its agenda when it hosts the U.N. Climate Change Conference (28th Conference of the Parties, COP28) later this year. To fully realize hydrogen as a mitigating technology, however, requires environmental policies that decisively link it to green technologies — wind, solar, tidal, and CCS.
Achref Chibani is a Tunisian journalist, researcher, and civil society activist whose core areas of focus are climate change, renewable energies, and human rights.
Photo by Tasneem Alsultan/Bloomberg via Getty Images
The Middle East Institute (MEI) is an independent, non-partisan, non-for-profit, educational organization. It does not engage in advocacy and its scholars’ opinions are their own. MEI welcomes financial donations, but retains sole editorial control over its work and its publications reflect only the authors’ views. For a listing of MEI donors, please click here.