2023GreenHydrogenOpportunitiesfortheGulfRegionSustainabilityResearchPaperMayTheAl-AttiyahFoundationOURMEMBERS2023May01TheAl-AttiyahFoundationisproudlysupportedby:ResearchSeriesINTRODUCTIONSUSTAINABILITYRESEARCHPAPERThisresearchpaperispartofa12-monthseriespublishedbytheAl-AttiyahFoundationeveryyear.Eachin-depthresearchpaperfocusesonacurrentsustainabilitytopicthatisofinteresttotheFoundation’smembersandpartners.The12technicalpapersaredistributedtomembers,partners,anduniversities,aswellasmadeavailableontheFoundation’swebsite.2023MayGreenhydrogencanhelpdecarbonisehard-to-abatesectorslikerefinery,steelandheavydutytransportandthechemicalindustry.TheGulfregioniswellpositionedtoestablishitselfasahydrogenhubasithascheapandabundantrenewableenergyresourcesandislocatedinthevicinityofmajorhydrogenconsumptioncentreslikeEuropeandAsia.Whatrisksdoesamassiveuptakeofgreenhydrogenposetotheregion?Whatisgreenhydrogenandwhatisitscurrentandfuturecontributiontoasustainableglobaldevelopment?WhichhydrogenpolicyframeworksarecurrentlyexistingintheGulfregion?02ResearchSeries•Greenhydrogencanhelpdecarbonisehard-to-abatesectorslikerefinery,steelandheavydutytransportandthechemicalindustry.•Today’shydrogendemandisforecastedtogrowfive-folduntil2050whichopenssignificanteconomicopportunitiesforrenewableenergyrichregionsliketheGulfcountries.•TheGulfregioniswellpositionedtoestablishitselfasahydrogenhubduetovariousreasons:oIthascheapandabundantrenewableenergyresources.oItisgeographicallywelllocatedinthevicinityofmajorhydrogenconsumptioncentreslikeEuropeandAsia.oIthastheexperienceandinfrastructureaswellasthefinancialmeanstodeveloplarge-saleenergyprojects.oThedomesticproductionofcheap,greenhydrogenmightattractenergyintensiveindustriesfromotherregionswhichcancontributetothediversificationofacountry’seconomy.•Morestringentglobalclimatecommitmentsmightheavilyreducetheregion’srevenuesresultingfromfossil-fuelexportswithrelatedimpactstocountries’economies.•Regardingthedifferenthydrogenproductiontechnologies,theGulfcountrieshavevaryingapproaches.Omanfocusesonproducinggreenhydrogen,Qatarisoptingforbluehydrogen,andtheUAEandSaudiArabiaplantostrikeabalancebetweenbothoptions.•Aglobaluptakeofhydrogendemandisadouble-edgedswordfortheGulfcountries.Itcanbeseenasasignificanteconomicrisktotheregionduetodecliningdemandforfossilfuels,butitalsobringsimmenseopportunitiesforsustainableeconomicdiversificationandpositioningtheregionasaworldleaderforproducingandexportinggreenhydrogen.03EXECUTIVESUMMARY2023MayResearchSeriesBACKGROUNDClimatechangeisoneofthemostsignificantchallengesofourtime.Theworldisfacingunprecedentedchangesinclimatepatterns,withpotentiallydevastatingeffectsonnaturalecosystems,humanlivelihoods,andglobaleconomicgrowth.Theurgencytoreducecarbonemissionsandtransitiontowardssustainableenergysourceshasbecomeatoppriorityformanycountriesandregionsworldwide(UNFCCC2023).Inthiscontext,greenhydrogenhasemergedasapromisingsolutionfordecarbonisation,especiallyinthehardtoabatesectorslikeheavyindustryandheavy-dutytransportaswellasaviationandmaritimetransport(IEA2022).TheGulfCooperationCouncil(GCC),consistingofBahrain,Kuwait,Oman,Qatar,SaudiArabia,andtheUnitedArabEmirates(UAE),isoneoftheworld’slargestandmostestablishedenergyexporters,withabout1/3oftheworld’soiland1/5oftheworld`snaturalgasreserves(SWP2022).Theemerginggreenhydrogenmarketpresentssignificantopportunities,butalsorisks,fortheGulfregion.Ontheonehand,theregionhasabundantrenewableenergyresources,includingsolarandwindpower,thatcouldbeharnessedtoproducegreenhydrogen–pavingthewayforlargescaleexportsofgreenhydrogenanditsderivatives.Moreover,itsvicinitytomajorhydrogenconsumptioncentreslikeEuropeandAsiaaswellasitsestablishedenergytransportinfrastructuremakestheregionaperfectcandidatetobecomeamajorhubforPower-to-X(PtX)export.However,theregionalsofacestheriskofoilandgasdemanddecliningbyalarge-scaleramp-upofthehydrogenmarketswhichcouldheavilyaffectitseconomy(Michaelowa&Butzengeiger2019).04Gulfstateshaverecognisedtheimportanceofdiversifyingtheireconomies;andmanycountrieshaveannouncedsignificantinvestmentsinrenewableenergiesandPtXtechnologies.EspeciallytheUAE,SaudiArabiaandOmanhavepublishedambitiousroadmapstosupplyAsiaandEuropeaswellastheirdomesticeconomieswithgreen(andblue)hydrogen.Hence,greenhydrogencouldprovideasignificantboosttotheregion’seconomicgrowthbycreatingnewsustainableindustries,jobs,andexportopportunities(Koch2022).Thisreportelaboratesonthequestion“whichopportunitiesandrisksarisefortheGulfregionfromagloballyemerginggreenhydrogen/PtXmarket?”.ResearchSeries2023May05HYDROGENPRODUCTIONANDDEMANDFigure1:SchematicofPEMelectrolyzercellGlobalhydrogenproductionreached94milliontonnesin2021andwasmainlyusedasafeedstockintherefiningandchemicalindustry.Approximately82%ofthisproductionwasmetbyunabatedfossilfuel-basedproductiontechnologiesandapproximately18%asaby-productfromchemicaloperations–intotalemitting900MtofCO2.Thisequalsapproximately2.5%ofglobalGHG-emissions.Thetwomostmaturetechnologiesforlow-carbonhydrogenproductionarebluehydrogen(fossil-fuelbasedhydrogencombinedwithCarbonCaptureandStoragetechnologies)andgreenhydrogen(hydrogenproducedviaelectrolysispoweredbyrenewableelectricity).Today,low-emissionhydrogenrepresentslessthan1%ofglobalproduction(IEA2022).Today’shydrogenproductionisexpectedtogrow5-folduntil2050.Maindemanddriversaredemandfromtransport-mainlyheavy-dutytransportaswellasairandmaritimetransport-steelproduction,electricitystorage/generationandtoasmalleramountthebuildingsector.However,demandintheseapplicationswaslimitedtoaround40ktH2in2021(IEA2022).Itisimportanttomentionthatgreenhydrogenproductionishighlyenergyintensive,andlessefficientthandirectelectrificationwithrenewableenergies(e.g.,inthehouseholdsector).Therefore,policymakersshouldaimtoprioritisehydrogenuseinthosesectorswherethehighestandmosteconomicallyeffectiveCO2-mitigationscanbeachieved(IRENA2022A).Greenhydrogenreferstohydrogenwhichisproducedviaelectrolysispoweredbyexclusivelyrenewableenergies(RE).Thisrenewableenergysourceshouldbenewlybuiltinordertoguaranteethatcurrentresourcesarenotdivertedfromtheexistingenergygridandthusensurethatactualemissionmitigationsareachieved.Withinthiscontext,thisconceptiscalledadditionality(IEA2022)andisakeycriterionforconsideringtheproducedhydrogenas“green”–e.g.,inthecontextofEUclimatepolicylegislation.ResearchSeries2023May06Anelectrolyserisanelectro-chemicaldevicewhichsplitswaterinacatalyticreactionbytheapplicationofaconstantcurrent.Anelectrolyzercellconsistsoftwoelectrodes(anode,cathode)andanelectrolyte(SeeFigure1).Whenwaterissplit,theoxygenisattractedtothecathode,whilethehydrogenisattractedtotheanode.Thereareseveraldifferenthydrogentechnologiesonthemarket.Themostmatureandwidelyusedonesarethealkalineandtheproton-exchange-membraneelectrolyserwhichbothhaveanefficiencyofapproximately60-70%meaningthat50kWhofelectricityisneededtoproduce1kgofhydrogen.(Abad&Dodds2020)Sincethegaseoushydrogenreleasedfromelectrolysishasaverylowenergydensitywhichmakesithighlyinefficientandcostlytobetransported,ithastobeprocessedtoabettertransportableform.Thetwomostpromisingwaystotransporthydrogenoverlongdistancesiseitherincompressedformviapipelines(wheregeographicalconditionsarebeneficial)orthesynthesisofhydrogenwithnitrogenfromambientairtoammoniaviatheso-calledHaber-Boschprocessanditstransportationviaships.Bothalternativescanaddsignificantcostsandenergyrequirementstothehydrogensupplychainandshouldbeconsideredcautiously(IRENA2022B).ResearchSeries2023May07CURRENTENERGYANDTHEENERGYEXPORTMATRIXThecombinedprovenoilreservesoftheGCCcountriesrepresentabout30%oftheworld'stotaloilreserves.TheGCCcountriesarealsohometosignificantresourcesofnaturalgas,withatotalprovenreserveofca.40trillioncubicmetersasoftheendof2019whichaccountforabout13%ofglobalexports(IRENA2019).TheenergysectorisamajorcontributortotheGDPoftheGCCcountries.Oilandgasexportsin2019accountedforapproximately42%ofKuwait’s,24%ofSaudiArabia’s,25%ofOman’s,17%ofQatar’sand16%oftheUAE’sGDP,showingthestrongdependencyofthesecountriesonfossilfuelexports.TheonlyexceptionsareBahrainandOmanwhereitaccountedforalowershare(Al-Sarihi&Mansouri2022).Thelargestshare(approximately70%)oftheGCC`sprimaryenergyresourcesareexportedtotheAsianmarket(primarilyChina,India,andJapan).Therelevanceofthesecountriesascustomershasbeengrowingoverrecentyears(IRENA2019).TheGulfcountries’geographiclocationinthesunbeltoffersremarkablepotentialforrenewableenergyproductionlikesolarandwindenergy.DespitetheabundantrenewableresourcesavailableintheGulfstates,theprimaryenergyneedsoftheGCCcountriesarestillmet99%byhydrocarbons.Recognisingtheshiftingenergylandscape,theGCCcountrieshavegraduallyincreasedtheirinvestmentsinrenewableenergies.Thetotalinstalledcapacityofrenewableenergieshasrisenfrom17MWin2011to3,271MWin2020.However,thecurrentcontributionofrenewablestotheregion'stotalprimaryenergyconsumptionremainsbelow1%.Nonetheless,theGulfcountrieshavesetambitioustargetsforrenewableenergydeployment,withagoalofreachingatotalinstalledcapacityofatleast80GWby2030(Al-Sarihi&Mansouri2022).ResearchSeries2023May08THECHALLENGEOFTHEGROWINGPUSHFORGLOBALENERGYTRANSITIONAsmentionedabove,theGulfcountriesareeconomicallyhighlydependentonoilandgasexports.Thosesubstantialcashflowswhicharepartlydistributedtoresidentsthroughincometransfers,public-sectoremployment,andpublicservices,areanimportantpillarofcurrentgovernmentsintheregion.However,transitioningfrompetroleumtootherindustriesandadoptingatax-basedfiscalsystemwoulddisruptthismodel,jeopardisingthegovernments’accesstocashflowsandthuscreatingastronginertia(Ansasri2022).ClimateandsustainabledevelopmentgoalsoftheGulfcountriesthemselvesbutalsoofmajorimportingcentresmakeaphase-outoffossilfuelsinevitableincomingdecades.Thisongoingtransitionposesmajorriskstotheeconomicandpoliticalstabilityintheregion.Furthermore,thecountriesfacesignificantrisksfromclimatechange,includingcoastalerosion,flooding,andsaltwaterintrusionduetorisingsealevels.Theregion’sextremeheatisexpectedtoworsen,leadingtomorefrequentandintenseheatwaveswithimplicationsforpublichealth,infrastructure,andenergydemands.Additionally,changingweatherpatternswillexacerbateexistingwaterscarcitychallenges(UNFCCC2023).Forthosereasonsatransitionawayfromfossil-fuelswhilestillmaintainingtheirpositionasmajorenergyexportersisobligatoryfortheGulfcountries.Hydrogenisconsideredkeytoenableasmoothtransitionawayfromtheircarbonintensivepracticestoamoresustainableanddiversifiedeconomy.Withtheirabundantrenewableenergyresources,theirexpertiseintheenergysector,thegeographicvicinitytomajorimportcentresandtheirmassiveinvestmentresources,Gulfcountriescanestablishthemselvesasahydrogenexporthub(Öko-Institut2022).ResearchSeries2023May09HYDROGENPRODUCTIONPOTENTIALOFGULFCOUNTRIESAsalreadynoted,theGulfregionboastsimpressiverenewableenergyresourcesandranksamongthecheapesthydrogenproductionlocationsintheworld;withexpectedhydrogenproductionpricesof<1.50$/kgH2in2050(IEA2021).Figure2showsarenewableenergysuitabilityanalysisthatcombinesrenewableenergyresourceswithvariousfactorssuchaspopulationdensity,topography,landcover,andprotectedareas.IntermsofsolarPVtechnology,theanalysisrevealssubstantialpotentialfordeploymentacrossallGCCcountries,whereutilisingjust1%ofthesuitableareacouldyieldaremarkable608GWofsolarPVcapacity.Similarly,thewindanalysisindicatesthatharnessingjust1%ofthesuitableareaforwindpowercouldtranslatetoanimpressivecapacityequivalentto26GW(IRENA2019).Figure3showstheannualtechnicalproductionpotentialforgreenhydrogenintheGulfregion.Thisdataisexclusivelybasedonwindspeedandsolarirradiationdata.Ascanbeseen,especiallySaudiArabiaandOmanandtolesserextendQatar,KuwaitandUAEhaveasignificantpotentialtoproducegreenhydrogen.Otheraspectslikewateravailability,distancetoinfrastructure,orproximitytocitiesorthecoastarenotconsideredinthiscontext.Ifonewouldtakethoseaspectsintoaccount,theproductionpotentialwouldbereducedbymorethanoneorderofmagnitudeascanbeseeninFigure4(Öko-Institut2022).However,waterstressincertainregionsisnotnecessarilyanexclusioncriterionforhydrogenproduction,sincewaterdesalinationplantscanproducefreshwaternearcoastlinesandentailonlymarginalcostsofapproximately1%oftheoverallhydrogenproductioncosts,althoughinitialinvestmentcostsaresignificant(Ansasri2022).ThisisspecificallyrelevantfortheGulfregion,whichmightturnouttobeacompetitiveadvantagecomparedtopoorercountrieswithlessfinancialresourcestoinvestinrenewableenergy-drivenwaterdesalinationfacilities.Figure2:Suitabilityanalysisresultsforon-gridsolarPV(left)andon-gridwind(right)ResearchSeries2023May10Figure3:TheoreticalgreenhydrogenproductionpotentialFigure4:AnnualproductionpotentialforgreenhydrogenconsideringadditionalrestrainingfactorsRegardingproductionpricesanexemplarycalculationforhydrogenproduction,conversion(toAmmonia,liquidhydrogen,sustainableaviationfuel(SAF))andtransportfromtheUAEtoGermanywasconductedandcanbeseeninFigure5.Thepricesshownhereareaveragelevelizedcostofhydrogen(LCoH)between2023and2050.Productioncostsareapproximately103€/MWhH2.DependingonthespecificPtXproductsignificantcostsforconversionandtransportbetween38and68€/MWhareaddedtotheproductioncosts.ResearchSeries2023May11Table1:CarbonintensityofdifferenthydrogenproductiontechnologiesEventhoughthisstudyinvestigatestheopportunitiesofgreenhydrogenfortheGulfregion,bluehydrogenmustbeconsideredasanalternative,especiallyregardingtherichnaturalgasreservesintheregion.Bluehydrogenis–likegreyhydrogen–producedbythesteammethanereformationprocess,splittingnaturalgas(CH4)inH2andCO2.Tomakegreyhydrogen“blue”,partoftheCO2iscapturedandstoredorutilised.ThecapturerateandshareofpermanentlystoredCO2arethekeydriversofCO2-intensityof‘blue’hydrogen.Inaddition,theemissionintensitydependssignificantlyonthesystemboundarychosen.Especiallyupstream(extraction,processing,andtransportofnaturalgas)anddownstreamemissions(transportemissions)canhaveasignificanteffectontheoverallembodiedemissions.Upstreamemissionsfromgreyandbluehydrogencanleadtoembodiedemissionsofupto5.2kgCO2/kgH2.Table1shows,bluehydrogenproductioncanhavesimilarlyhighembodiedemissionsasgreyhydrogenwhichmakestheecologicalbenefitquestionable.Especiallynaturalgasexportingcountrieslikei.e.,Qatarhaveahighinterestindevelopingbluehydrogentechnologies.IfbluehydrogenwillbeatruealternativeorjustasunkeninvestmentfortheGulfcountries,willheavilydependonthepoliticalwillofboththeexportingandimportingcountriesaswellastherawmaterialandtechnologypricesnecessaryfordifferenthydrogenproductiontechnologies.Figure6showsacomparisonofgreenvsbluehydrogenpricesdependingonnaturalgasprices.Figure5:CostbreakdownofPtXproductionandtransportcostsfromUAEtoGermanyResearchSeries2023May12Figure6:LCoHofbluehydrogenatvariousgaspricesvsgreenhydrogenResearchSeries2023May13Countriesproducinggreenhydrogencaneitheruseitdomesticallyorexportit.Ifuseddomestically,greenhydrogencanbeusedtodecarbonisetheindustryandtransportsector,andsupportgridstabilityinscenariosofaveryhighrenewableenergyshare.Theindustrysector,thechemicalsector,fertiliserproductionandtheheavyindustry(e.g.,steelproduction)areprimecandidates.Hydrogencanalsobeusedtodecarbonisethetransportsector;thisapplicationthoughshouldbelimitedtoheavy-dutyandlong-distancevehicles(IEA2022).Usinggreenhydrogeninsteadofoilandgasdomestically,nomatterinwhichsector,willalsohelpGulfstatestoachievetheircommitmentsundertheParisAgreement.SeveralGulfstateshavepledgednet-zerotargetsintheirNationallyDeterminedContributions(NDCs):forexample,SaudiArabia&Bahrainby2060,theUAEandOmanwanttobecarbonneutralby2050,Qatar25%andKuwait7.4%reductionby2035(Khan,&Al-Ghamdi2023).PotentialdomesticapplicationsintheGulfregionwillmostprobablyfocusmainlyonoilrefineries,fertiliserproduction,steelindustryandthetransportsector.Especiallyforthesteelandchemicalsectoritispossiblethatduetothehighhydrogentransportcosts,inthelongterm,industriescurrentlylocatedinregionswithlowerrenewableenergypotentialswillrelocatetheiroperationstocertainGulfcountriesandrathertransporttheendproducttodemandcentresinsteadofimportinggreenhydrogenathighprices(IRENA2022C).Thiscouldopensubstantialneweconomicopportunitiesfortheregardedcountries.Duetotheaforementionedreasons,Gulfcountrieshavethepotentialtoestablishthemselvesasworldleadingexportersofgreenhydrogen.Themostimportantquestionsregardingfuturehydrogentradeare:•Whatquantitiesofhydrogenwillbedemanded?•Whatwillbethemaindemandcentres(markets)?•Whattypeofhydrogenwillbedemanded?IRENAexpects5000TWh/yearofhydrogenandhydrogenderivativestobetradedby2050.Figure7showsexpectedtradevolumesglobally(IRENA2022C).RecentreportsbyIRENA,theHydrogenCouncilandDNVsuggestthattheEU,Japan,andSouthKoreawillbecomekeyimportersofhydrogen,whereasAustralia,theMiddleEast,NorthAfrica,andSouth/CentralAmericaarecommonlyseenasmajorpotentialexporters–withvaryingmarketpositionsduetotransportdistances.China,India,andtheUSareexpectedtojointheclubofdemandcentres,buttheyhavethepotentialtobecomeself-sustainingorevenexportersdependingontheirpoliticalchoices(DNV2022;IRENA2022C;HydrogenCouncil,2022).DOMESTICUTILISATIONANDEXPORTPOTENTIALFORGREENHYDROGENResearchSeries2023May14Figure7:Globalexpectedhydrogentrademapin2050Notallcountries/regionswillbecomesimilarlyactive.Investmentcapabilitiesandpoliticalpreferencesplayanimportantrole.Gulfcountrieshavetheabilitytoinvestbothinhydrogeninfrastructure-andbenefitfromexistingenergyinfrastructuresandlongexperienceasenergyexporters-,whereasfinancialcapacitiesincentral/southAmericaarelimited,andevenmoresothoseinmanyAfricancountries(IRENA2022A).Thequestion“Whattypeofhydrogenwillbedemanded?”iscrucialfortheinvestmentstrategyof(future)hydrogenproducers.Greyandbluehydrogenfollowadifferentproductiontypethangreenhydrogenand,hence,agoodunderstandingoffuturedemandpatternsisdecisiveforasuccessfulinvestmentstrategy.Theemissionintensityofhydrogenisexpectedtobecomeakeyparameterforbuyersandwillthereforeaffectachievableprices.TheEUforexamplealreadyimplementsstrictregulationsonthecarbonintensityofhydrogen.TherecentlyagreedRenewableEnergyDirective(REDII)definesrenewablehydrogenas:i)Itderivesitsenergycontentfromrenewablesourcesotherthanbiomass;andii)achievesa70%GHGemissionreductioncomparedtofossilfuels.Low-carbonhydrogenisdefinedashydrogenwithanenergycontentthatisderivedfromnon-renewablesources,andthatmeetsaGHGemissionreductionthresholdof70%comparedtofossil-basedhydrogen.Thiscanbetranslatedtoanemissionintensitythresholdofapproximately3.4kgCO2/kgH2(EUCommission2022).Fromatechnicalpointofview,itwillbeverychallengingtoreachthisthresholdwithbluehydrogen.Withthisregulationinplace,theEuropeanmarketisexpectedtobecomethekeydemandcentreforgreenhydrogeninthenextyears.TheUSseemmoreagnostictodifferenthydrogentypes,butitsrecentlyintroducedtaxincentivesgiveaclearprioritytogreenResearchSeries2023May15hydrogen:theInflationReductionAct(IRA)givestaxincentivesforlow-carbonhydrogenproductionbetween0.60USD/kgH2toupto3USD/kgH2.Thelowerthecarbonintensity,thehigherthetaxcredit(BlueGreenAlliance2022).Japanisanotherexistingkeydemandcentre.Asoftoday,Japanisopentobothblueandgreenhydrogen,butonecanexpectthatinthemid-tolong-run,Japanwillfocusongreenhydrogenaswell,inordertomeetitsnet-zerotargetfor2050(MinistryofEconomyJapan2017).Overall,inviewofmoreambitiousnationalclimatepoliciesandinternationalclimatecommitments,onecanexpectthatsomecountries/regionswillacceptbluehydrogeninatransitionalphasebutwillswitchtogreenhydrogenwithclearlydefinedemissionthresholds(suchasthe3.4kgCO2/kgH2alreadydefinedbytheEU)inthemid-tolong-term.Insummary,bluehydrogenmayserveasaninterimsolutionduetothecurrentlylowerproductioncostscomparedtogreenhydrogeninmostlocations.Investmentinnewfossil-fuelbasedhydrogenproductionmightentaillong-termlock-ineffectsforproducersandresultinmissedopportunities(i.e.,lackofgreenhydrogenproductioncapacities)if,inafewyearsfromnow,theworlddemandmoreandmoregreenhydrogen.Gulfcountriesshouldthereforedevelopaforward-lookinggreenhydrogenstrategythatenablesthemtoproactivelyparticipateintheglobalenergytransformationandbecomeworld-leadersincleanenergyproduction.Whenitcomestothehydrogencolourspectrum,theGulfstateshavedifferentapproaches.Omanisprimarilyfocusedonproducinggreenhydrogen,Qatarisoptingforbluehydrogen,whiletheUAEandSaudiArabiaareplanningtostrikeabalancebetweenbothoptions.InOctober2021,SaudiArabia'sMinisterofEnergy,expressedtheambitiontobecometheworld'slargesthydrogenproducer.Whilethenationalhydrogenstrategyiscurrentlybeingfinaliseditwasalreadystatedthathydrogentechnologieswillattract$36bn(www.csis.org).Thecountry'shydrogenpolicyiscloselyalignedwithVision2030.Vision2030outlinesacomprehensivetransformationofSaudiArabia.Althoughhydrogenisnotexplicitlymentionedinthedocument,itsstrategicobjectivesemphasisesignificantincreasesindomesticvaluecreation,non-oilexports,renewableenergy,andthenaturalgasindustry.Furthermore,SaudiArabiaplayedaroleinco-developingtheCircularCarbonEconomy,aconceptadoptedbytheG20duringitspresidency,whichisrelevantto(blue)hydrogen.Thisframeworkfocusesonenergyefficiency,carbon-neutralpowergeneration,naturalcarbonreduction,andextensivecarboncapture.Furthermore,SaudiArabiahassignedseveralMoUs(i.e.,withGermanyandJapan)toestablishcooperationsregardinghydrogen(Öko-Institut2022).Similarly,Oman'sVision2040doesnotexplicitlyrefertohydrogenbutemphasisesthegeneraldiversificationofenergysources.InFebruary2020,anationalhydrogenstrategywasDIFFERINGFRAMEWORKOFGULFCOUNTRIESREGARDINGHYDROGENResearchSeries2023May16announcedandisexpectedtobeunveiledsoon.InAugust2021,Omanestablishedthe"Hy-FlyAlliance,"whichbringstogethergovernmentagencies,theoilandgassector,educationalandresearchinstitutions,andtheportsofSoharandDuqminacollaborativeplatform.Additionally,severalministrieshaveestablishedhydrogendivisions,andastate-ownedhydrogencompanynamedHydrogenDevelopmentOmanhasbeenformed(Öko-Institut2022).In2021theUAEpublisheditsHydrogenleadershiproadmapwiththeobjectiveofestablishingthecountryasaleaderinthehydrogensector.Theroadmapaimstocreatenewvaluechainsfortheexportoflow-carbonhydrogenanditsderivatives,aswellastheproductionofsteelandjetfuelusinghydrogen.TheUAEplanstodeveloparegulatoryframeworkwithappropriatepolicies,standards,andcertificationstosupporttheseefforts.WithintheroadmaptheUAEhassetatargetofcapturing25%oftheglobalhydrogenmarket,aimingtobea“top10”globalhydrogenproducerby2031(www.solarquarter.com).Qatar'sapproachfocusesonthepotentialforpartnershiptoproducebluehydrogen,bycapitalisingonitspositionastheleadingexporterofliquefiednaturalgas(LNG).UntilrecentlyQatardidnothaveplansforapolicyframeworkormeasurestoincreasedomestichydrogenproduction.Instead,itsfocuswastoexportLNGandalloworpartnerwithimporterstoproducebluehydrogenabroad(Öko-Institut2022).However,ithasrecentlybeenannouncedthatQatarintendstobuildtheworld`sbiggestbluehydrogenplantwithaproductioncapacityofapproximately1.2milliontonsofammoniaperyearwhichissupposedtostartproductionin2026(www.reuters.com).Furthermore,hydrogenismentionedinQatar'sNDCsasameanstofulfillitsdeterminedcontributions.WhileKuwaithasyettoadoptanationalhydrogenstrategy,awhitepaperforastrategywaspresentedin2021.ThewhitepaperalignswiththeoverarchingVision2035"NewKuwait"andsuggestspromotingcarboncapture,renewableenergy,andbothgreenandbluehydrogenproduction.ItalsoadvocatesfordomesticuseofhydrogenandincreasedcooperationwithotherGCCcountries.GreenhydrogenisconsideredmorerealisticforKuwait,asthecountryisanetimporterofnaturalgas(www.tresor.economie.gouv.fr).Bahraininitiallyapproachedhydrogencautiously,commissioningfeasibilitystudiesforadomestichydrogeneconomyinNovember2020.However,thegovernmentexpresseditsintentiontoobservedevelopments.Itwasn'tuntilthepublicationoftheIndustrialStrategy2022-2026inJanuary2022thattheproductionofgreenandbluehydrogenwasdeclaredagoal(Öko-Institut2022).ResearchSeries2023May17CONCLUSIONTheGulfcountrieshaveoutstandingpotentialforhydrogenproductionandtoestablishthemselvesasmajorhydrogen/PtXexporthubs.Therearemainlyfourreasonsforthisauspiciouspotential:1.Theregionboastsenormousrenewableenergyresourcesandhasthenecessaryspacetoproducegreenhydrogenonlargescaleandathighlycompetitiveprices.Additionally,themajorgas-exportingcountrieslikeQatar,havesignificantnaturalgasreservesforproducingbluehydrogenatverylowcosts.2.Theregion’sgeographicalvicinitytomajordemandcentresliketheEuropeanUnionbutalsoAsia,positionsitattheforefronttoestablishitselfasamajorexporthubduetorelativelylowtransportcosts.3.Mostcountriesintheregionareestablishedprimaryenergyexporters,whichgivesthemvastexperienceaswellasexistinginfrastructuretorealiseinnovativeenergyprojectslikehydrogenorPtX.4.Duetomassivecashflowscausedbytheexportoffossilfuels,theGulfcountrieshaveasubstantialinvestmentpotentialattheirdisposal,whichisnecessarytoestablishthemselvesasmajorproducersandexportersofhydrogen.Additionaltotheeconomicopportunitiesofexportinghydrogen,theavailabilityofcheapdomesticallyproducedhydrogenmightattractindustriesfromotherregionsintheworldwhicharedependentoncheapsustainableenergyandhencediversifytheregion’seconomy.Primeexamplesforthisarethesteelandthechemicalsector.However,Gulfcountriesareheavilydependentontheexportoffossilfuels.Morestringentclimatetargetsmightinthelong-termheavilyreducetherevenuesfromoil-andgasexports.Inthisregard,aglobaluptakeofhydrogenisadouble-edgedswordfortheGulfcountries.Itmaybeseenasasignificanteconomicrisktotheregion.However,hydrogenwouldbethebestalternativefortheGulfcountriesinacarbon-constraintworld,because–contrarytoascenarioinwhichmainoilandgasconsumerstransitionto100%domesticallyproducedrenewableenergies–itstilloffersGulfcountriestheopportunitytocontinuetheirrolesasglobalenergyexporters.Toestablishitselfasagreenhydrogenproductioncentreandgloballyleadingexporter,theGulfcountriescantakevariousactions.Itisimportanttocreateaclearhydrogenvisionuntil2030and2050andtomobilisefinancingforlargescalehydrogenprojects.Additionally,itisimportanttodevelopinternationalhydrogenpartnershipswithenergy-importingcountries.Europecanbecomeakeypartnerforhydrogen,buttheGulfregionmaycompetewithNorthAfricanandSouthAmericancountries.Hence,itisimportanttobeamongthefirstmoversbeforeEuropefocussestoostronglyonotherhydrogensupplyregions.Also,theGulfregioniswell-positionedforhydrogendeliverytoJapan,SouthKorea,andotherSouth-EastAsiancountries.Inthisregion,competitionwithAustraliacanbeexpected.ResearchSeries2023May18APPENDIXAbad,A.V.;Dodds,P.E.(2020):Greenhydrogencharac-terizationinitiatives:Definitions,standards,guaranteesoforigin,andchallenges.EnergyPolicy,138,p.111300.¬Al-Sarihi,A.,&Mansouri,N.(2022).RenewableenergydevelopmentintheGulfcooperationcouncilcountries:Status,barriers,andpolicyoptions.Energies,15(5),1923.Ansari,D.(2022).ThehydrogenambitionsoftheGulfStates:Achievingeconomicdiversificationwhilemain-tainingpower.Ansari,D.(2022).ThehydrogenambitionsoftheGulfStates:Achievingeconomicdiversificationwhilemain-tainingpower.BlueGreenAlliance(2022):AUserGuidetotheInflationReductionAct:HowNewInvestmentsWillDeliverGoodJobs,ClimateAction,andHealthBenefitshttps://www.bluegreenalliance.org,accessedFebruary2023.EUCommission(2022):Renewableenergy–methodforassessinggreenhousegasemissionsavingsforcertainfuels,https://ec.europa.eu,accessedFebruary012023https://solarquarter.com/2023/03/07/uae-to-publish-na-tional-hydrogen-strategy-in-april/#:~:text=The%20UAE%20aims%20to%20be,focus%20around%2010%20key%20elements.)https://www.argusmedia.com/en/news/2379719-oman-pledges-net-zero-emissions-by-2050,accessedApril2023https://www.climate-laws.org/document/uaes-hydro-gen-leadership-roadmap_a117,accessedMay2023https://www.csis.org/analysis/saudi-arabias-hydro-gen-industrial-strategy#:~:text=Saudi%20Arabia%20seeks%20to%20become,an%20increasingly%20car-bon%2Dconstrained%20world,accessedMay2023https://www.reuters.com/business/energy/qatar-build-worlds-largest-blue-ammonia-plant-qatarenergy-ceo-2022-08-31/,accessedMay2023https://www.tresor.economie.gouv.fr/Articles/04a6e749-3ebf-4024-b663-e8f0e6c5be60/files/1eefadd0-39bc-41e0-946b-500c4b04cf4a,accessedMay2023HydrogenCouncil(2022):GlobalHydrogenFlows:Hydrogentradeasakeyenablerforefficientdecarboni-zation,HydrogenCouncil,Belgium.InternationalEnergyAgency(2021):GlobalHydrogenReview2021,IEA,Parishttps://www.iea.org/reports/global-hydrogen-review-2021,License:CCBY4.0.InternationalEnergyAgency(2022):GlobalHydrogenReview2022,IEA,Parishttps://www.iea.org,License:CCBY4.0,accessedFebruary01,2023IRENA(2019),‘RenewableEnergyMarketAnalysis:GCC2019’.IRENA,AbuDhabi.IRENA(2022A)Press,E.,VandeGraaf,T.,Blanco,H.,Bianco,E.,Tsang,W.,Ferroukhi,R.,&Gielen,D.(2022).Geopoliticsoftheenergytransformation:thehydrogenfactor.IRENA(2022B).“GlobalHydrogenTradetoMeetthe1.5°CClimateGoal:PartII—TechnologyReviewofHydrogenCarriers.”(2022).IRENA(2022C):Globalhydrogentradetomeetthe1.5°Cclimategoal:PartI–Tradeoutlookfor2050andwayforward,InternationalRenewableEnergyAgency,AbuDhabi.GlobalHydrogenTradePartI,accessedJanuary27,2023Khan,M.I.,&Al-Ghamdi,S.G.(2023).HydrogeneconomyforsustainabledevelopmentinGCCcoun-tries:ASWOTanalysisconsideringcurrentsituation,challenges,andprospects.InternationalJournalofHydrogenEnergy,48(28),10315-10344.Lee,H.,Calvin,K.,Dasgupta,D.,Krinner,G.,Muk-herji,A.,Thorne,P.,...&Zommers,Z.(2023).UN-FCCCAR6SynthesisReport:ClimateChange2023.SummaryforPolicymakers.MinistryofEconomyJapan,TradeandIndustry(2017):BasicHydrogenStrategy.www.asiapacificen-ergy.orgÖko-Institut(2022)Hydrogenfactsheet–GulfCoop-erationCountries(GCC)ContributingAuthors:•PhilippVeh•SonjaButzengeigerResearchSeries2023MayHaveyoumissedapreviousissue?AllpastissuesoftheAl-AttiyahFoundation’sResearchPapers,bothEnergyandSustainability,canbefoundontheFoundation’swebsiteatwww.abhafoundation.org/publicationsPASTISSUESSeveralchallengespreventthewidespreaduptakeofAgrivoltaics(Agri-PV)includingexistingfarmingpractices,highinitialinvestmentcostsduetolowmarketpenetrationandawareness,lackofgovernmentincentivesandlimitedtechnicalknowledgeofbestpracticesforadoption.Agri-Pv:HarvestingAgricultureandSolarEnergyforaSustainableFutureFebruary-2023(QRCO.DE)Climatechangemitigationthroughgreenhousegas(GHG)reductionorremovalfromtheatmosphereisaglobalpublicgoodthatrequiressignificantinvestmentsbygovernmentsandbusinesses.TheImplicationsofCross-BorderCarbonTaxesonGeopoliticsandInternationalTradeMarch-2023(QRCO.DE)Sincethebeginningofthe21stcentury,renewableenergy(RE)forpowergenerationhasexperiencedremarkableglobalgrowthanddevelopment.Bytheendof2022,globalREgenerationcapacityamountedto3,372gigawatts(GW),growingtherenewablepowergenerationcapacitybyarecord295GWorbyalmost10%comparedto2021.RenewableEnergyInvestmentsinTimesofGeopoliticalCrisisApril-2023(QRCO.DE)19ResearchSeries2023MayOurpartnerscollaboratewithTheAl-AttiyahFoundationonvariousprojectsandresearchwithinthethemesofenergyandsustainabledevelopment.20OURPARTNERSResearchSeries2023MayAlAttiyahFndnTheAl-AttiyahFoundationAl-AttiyahFoundationTel:+(974)40428000,Fax:+(974)40428099www.abhafoundation.orgBarzanTower,4thFloor,WestBay.POBox1916Doha,QatarTheAl-AttiyahFoundation