Saudi Arabia is planning to lead the world’s hydrogen market as the world’s largest crude exporter seeks the burgeoning hydrogen business in China and Europe. The kingdom is building a $5 billion plant that will produce green hydrogen extracted from water using solar and wind power. When the plant starts production in 2025, it will be among the largest hydrogen makers in the world. The hydrogen plant is also part of the planned megacity of Neom that will run entirely on renewable energy.
Hydrogen has been long touted as a cleaner alternative to hydrocarbon. Many countries are embracing the opportunity in this new market. The UK is developing ten projects to heat buildings with Hydrogen. China is deploying hydrogen-fueled passenger and commercial vehicles. Meanwhile, Japanese companies are developing the distribution chain for the gas and plan to use it in steelmaking.
The International Renewable Energy Agency said that currently, it costs nearly $5 to produce a kilogram of hydrogen. However, Saudi Arabia’s perpetual sunshine and wind, as well as its vast unused land, can provide the kingdom with a competitive advantage in the hydrogen market, which is estimated to be worth $700 billion by 2050. Saudi’s planned hydrogen plant is expected to lower the production cost to around $1.5 per kilogram.
