Saudi Arabia seeks to become a global supplier of hydrogen, primarily using hydrocarbons combined with the capture and storage of carbon emissions, as a key means to diversify its export profile away from oil, a report said.
“The Kingdom’s vast hydrocarbon resources, existing industrial capacities, and business expertise make it an attractive supplier candidate to those energy import–dependent economies that have begun to explore hydrogen imports,” Jane Nakano, a senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C., said in an analysis.
“While hydrogen likely speaks to Saudi Arabia’s strength as an energy supplier, the development of a fuel cell vehicle market and, more importantly, fuel cell vehicle manufacturing capacity at home could help the country to meet some of the major Saudi Vision 2030 mandates, such as the development of new industrial sectors and diversification of its exports,” said the report.
She said Saudi Arabia wants to become the top supplier of hydrogen worldwide. Hydrogen production would allow Saudi Arabia to become less reliant on domestic oil. This may be of particular value to the Kingdom in the carbon-constrained world that is characterized by a wave of net-zero targets from governments and industries around the world.
The Kingdom has clean hydrogen production targets of 2.9 million tons per year (t/yr) by 2030 and 4 million t/yr by 2035.
According to the report, the current focus is to gain a large market share in blue hydrogen, particularly in the form of blue ammonia in the coming decade.
Nakano described as a major step the decision in September 2020 for Saudi Aramco to ship 40 tons of blue ammonia from Saudi Arabia to Japan.
“This was the world’s first demonstration of blue ammonia supply chains, entailing the production and international maritime transportation of blue ammonia. This project reaffirmed Aramco’s view that existing technology solutions (i.e., the extraction, processing, and conversion of natural gas into hydrogen and ammonia) can help provide cost-effective and scalable low-emission solutions,” she said.
Nakano says that renewables-based hydrogen is a key focus of technological and economic experiments in the futuristic city of Neom, which features a $5 billion green hydrogen project.