• Type General news
  • Date 17 August 2021

KAPSARC Assesses Saudi Arabia’s Challenges and Opportunities in the Transition to a Hydrogen Economy

Saudi Arabia aspires to be a global power in the field of clean hydrogen production. In early 2021, His Royal Highness, Minister of Energy and Chairman of the Board of Trustees of the King Abdullah Petroleum Studies and Research Center (KAPSARC), Prince Abdulaziz bin Salman, stated that Saudi Arabia aims to become another Germany when it comes to renewables.

As KAPSARC has a project dedicated to studying the challenges and opportunities in the Kingdom’s transition to a hydrogen economy, two researchers (Jan Frederik Braun and Rami Shabaneh) published a recent Commentary that seeks to discuss the opportunities and challenges of clean hydrogen in the Kingdom.

The Commentary indicated that the global commodity market for clean hydrogen is expected to reach $11 trillion over the next 30 years.

Rami Shabaneh, the researcher in the Markets and Industrial Development Program at KAPSARC, explains three roles that hydrogen plays as an energy vector: decarbonizing hard-to-abate segments of the energy value chain that cannot be electrified (e.g., high-temperature heavy industrial processes, heavy-duty and long-haul road transport, aviation and shipping), enabling sector coupling by integrating the electric power sector with the heating and cooling, transport and industrial sectors, in addition to complementing electricity in the energy transition more generally.

Shabaneh stated that Bloomberg New Energy Finance predicted that hydrogen would contribute to meeting 24% of final energy demand if global warming was limited to 1.5 degrees Celsius (°C) above pre-industrial levels, and 18% if global warming reaches 2°C by 2050. He added that achieving both scenarios requires placing comprehensive decarbonization measures, reducing the cost of hydrogen production, and building its infrastructure to create more demand for hydrogen.

For his part, the researcher Jan Frederik Braun stated that the Kingdom has the lead in producing blue hydrogen, which is expected to be cheaper to produce than green hydrogen until 2030. This advantage is considered crucial to secure its investment opportunities in this field for 10 to 20 years. He indicated that the Kingdom’s hydrogen economy can benefit immensely from scaling up production, cooperation, demand and infrastructure in cooperation with the GCC countries.

The paper emphasized that Saudi Arabia has both the ambition and opportunity to become a frontrunner in the nascent clean hydrogen market. The Kingdom must introduce dedicated policies to promote projects and provide government incentives in the near term to drive initial projects and construct the necessary infrastructure in order to improve the ability to scale up clean hydrogen production.

The Center plans to work on an upcoming joint project with the King Abdullah University of Science and Technology (KAUST), to explore creating a hydrogen market in general, ways of production on a large scale and cost reduction, and targeting end-use markets, infrastructure usage and resource requirements.


This article originally appeared on Arab News.