Saudi Arabia is expanding its green hydrogen and ammonia production and export to Europe. The latest move comes after the Kingdom’s ACWA Power and Germany’s SEFE signed a deal to produce and export these products to Europe.
The agreement was signed in Riyadh, with Saudi Energy Minister Prince Abdulaziz bin Salman and German Finance Minister Jörg Kukies in attendance.
Saudi Arabia regularly signs agreements with European countries to export its clean energy products. In January, ACWA Power also signed an MoU with Italy’s Snam to explore opportunities for a green hydrogen supply chain from Saudi Arabia to Europe.
Under the new agreement, ACWA Power will be the main developer, investor and operator of green hydrogen and ammonia production, while SEFE will be a co-investor and main buyer, responsible for selling the green hydrogen to customers in Germany and Europe.
Prince Abdulaziz and Kukies discussed key energy issues and clean hydrogen efforts between the two countries, building on a 2021 agreement.
Saudi Arabia is developing the NEOM Green Hydrogen Project, which will become the world’s largest facility for producing green ammonia and hydrogen using renewable energy.
When completed in 2026, the plant will produce 600 metric tons of clean hydrogen daily through electrolysis and will generate 1.2 million metric tons of green ammonia annually.
Dr. Mohammed Al-Sabban, former senior advisor to Saudi Arabia’s oil minister, told Asharq Al-Awsat that the partnership between the Saudi and German companies shows a strong interest in green hydrogen and ammonia, clean products aimed at European markets. SEFE will buy and market these products in those countries.
He said this is an important step to add value to Saudi Arabia’s green hydrogen and ammonia production, which will be exported globally. It will also help boost the country’s non-oil economy and support its climate change goals.
Energy expert and former OPEC information director Fuad Al-Zayer noted that Saudi Arabia plans to source 50% of its energy from renewables. The Kingdom’s location and the NEOM project give it a competitive edge in green hydrogen production.
Saudi Arabia has the right conditions for producing green hydrogen at low costs and is positioned to lead globally, Al-Zayer stressed to Asharq Al-Awsat.
He added that European countries, especially Germany, are looking for alternatives to oil and gas.
Germany, with its hydrogen strategy, is seeking reliable and affordable sources.
In 2022, Germany opened a hydrogen diplomacy office in Riyadh to explore these opportunities and strengthen cooperation. Al-Zayer said Saudi Arabia aims to export all forms of energy, aligning with both countries’ goals.
