Global green hydrogen market to reach $700 billion by 2050

31 May 2022 3 min. read
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The Middle East’s green hydrogen market is set for a major boom in the coming decades, on the back of a global market that is set to reach $700 billion by 2050, according to a report by Arthur D Little.

In its report titled ‘Paving the way for green hydrogen’, the global management consultancy explores the role green hydrogen will have in the future energy mix, concluding that green energy “can be a key technology to bridge decarbonization ambitions.”

“Decarbonization is high on the world’s agenda and countries are actively seeking to lower emissions and transition to clean energy sources,” explained Carlo Stella, a partner at Arthur D Little in Dubai.

Carlo Stella and Eddy Ghanem

Based on market demand, as well as the commercial opportunities that can be unlocked, the green hydrogen economy could reach $700 billion worldwide by 2050.

A natural hotspot for renewable energy, the Middle East has a role to play on the global stage. Alongside fueling domestic energy use, several countries in the region are seeking to capitalise on the rapidly expanding green hydrogen export segment of the market.

In the sector, Saudi Arabia and the United Arab Emirates are positioning themselves as frontrunners. Last year, Saudi Arabia announced a strategic green hydrogen development alliance with Germany to generate, process, use, and transport clean hydrogen, representing a significant stride as the Kingdom ramps up its volumes of green hydrogen.

In the UAE, a green hydrogen project was inaugurated at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai in 2021. In collaboration with Dubai Electricity and Water Authority, Expo 2020 Dubai, and Siemens Energy, the project was the first solar-driven green hydrogen producing facility in the MENA region.

Also in the UAE, energy policy makers have joined forces with the Netherlands to boost its research and efforts on hydrogen energy. Stella: “Such partnerships contribute to catalyzing the transition towards hydrogen energy and support the two countries’ orientation in formulating projects and initiatives to support the Paris Agreement on climate change.”

Another regional use case is Neom in Saudi Arabia, where the world’s largest green hydrogen plant is being developed. There, policy makers are building dual sources of renewable energy (solar and wind) to fuel the production process of green hydrogen.

Eddy Ghanem, a principal at Arthur D. Little in Beirut, said: “Upon completion, the availability of both solar and wind energy in Neom is expected to yield a combined electricity cost of $2-3 ct/Kwh, which will reduce the total cost of green hydrogen production to approximately $2/kg.”

The fundamentals for success

However, successfully deploying green hydrogen is easier said than done. “To be successful, thriving conditions need to be secured in the areas of policy, supply, infrastructure, and demand,” said Stella. “The conditions must be in place to ensure cost-competitive production, reliability of production and supply, and hedging of risks to attract investors.”

“Through a collective effort based on transparency, collaboration, and innovation, interested parties can deliver on companies and countries decarbonization commitments, successfully deploying green hydrogen to usher in a new chapter of renewable energy transformation,” concluded Stella.