As the world’s leading nations continue to grapple with the challenges posed by climate change there are signs that the Gulf states are becoming increasingly focused on the development of green hydrogen, not just as an alternative to oil and gas, but as a fuel that could generate considerable energy revenues for the region.

However, the major challenge for hydrogen power has been the need for heavy usage of electricity to produce hydrogen in usable form and surmounting the challenges of long-term storage.  However, as is now widely acknowledged, the price of electricity generated from renewable sources such as solar and wind has now fallen to the point when it is comparable with electricity generated from hydrocarbons.  Moreover, the Gulf states have the potential for both solar and wind power in abundance enhancing the potential of green hydrogen as an exportable energy source.

Last month, the UAE announced that it is building a new facility to demonstrate the potential of green hydrogen. During Expo 2020, green hydrogen generated by the facility will power fuel-cell vehicles to travel the 50-kilometre distance between the Expo 2020 site and Mohammed bin Rashid Al Maktoum Solar Park.

Identifying these alternative fuels is emerging as of the utmost importance for Gulf oil exporters who appear to be seeing the potential to capitalise on their existing energy infrastructures and substantial expertise in the energy industry possibly to retain their position as global energy suppliers.  A recent report by the Hydrogen Council declared that a $2.5 trillion industry could be built on the basis of hydrogen production and fuel cell development by 2050 as the costs of renewable hydrogen production have the potential to fall faster than previously predicted.

Perhaps inevitably, there are also signs that these emerging Gulf ambitions to replace oil and gas with hydrogen power, are attracting competition amongst potential partners.  This week, Russia’s Deputy Prime Minister Alexander Novak announced that his country is very interested in cooperating with Saudi Arabia to build a new hydrogen energy industry.  Once again, as the Gulf states rapidly refocus on potential alternatives to oil and gas, there will be close interest in seeing whether the EU also has the vision and determination to seize on potential future partnerships with the Gulf as part of its New Green Deal.