The United Arab Emirates (UAE), one of the world’s leading oil exporters, is taking a firm step towards a cleaner future for energy. The country is seeking to diversify its energy economy to maintain its global leadership in the post-carbon era.
The UAE‘s strategy is aligned with its plan to achieve carbon neutrality by 2050. Its public and private sectors are promoting a number of initiatives along the way, as we will see below.
In 2023, the UAE government launched the 2050 National Hydrogen Strategy, striving to produce 1.4 million tonnes of low-carbon hydrogen per year by 2031. As its contribution to this target, the state-owned Masdar company, the centrepiece of the UAE’s strategy, is expected to produce one million tonnes of renewable hydrogen. The remaining amount (around 400,000 tonnes) will come from what’s known as blue hydrogen, which is generated using natural gas with carbon capture technologies to mitigate its environmental impact. The target will be expanded to 15 million tonnes per year in 2050.
The UAE’s strategy envisages creating at least two large hydrogen clusters or hydrogen “oases” in key industrial areas such as Ruwais and the well-known KEZAD economic zone in Abu Dhabi by 2031, expanding the number of production centres to five by 2050. These clusters will serve as integrated hubs for the generation, distribution and consumption of hydrogen, particularly in hard-to-decarbonise sectors such as steel, aviation, heavy transport and fertilisers.
The UAE’s strategy envisages creating at least two large hydrogen clusters by 2031 and expanding the number of production centres to five by 2050
The plan will also strive to increase its renewable energy generation capacity from the current figure of 3.2 gigawatts to 14 gigawatts by 2030. This expansion could generate savings totalling between 100 and 150 billion dirhams (approximately €23 to €37.5 billion) in terms of electricity generation costs.
As part of its climate commitment, the UAE has also updated its national target under the Paris Agreement. The country now aims to cut its emissions by 40% by 2030, surpassing its previous 31% target.
Among the most significant renewable hydrogen projects in the United Arab Emirates, we should mention how the country was the driving force behind the first renewable hydrogen plant in the Middle East, with infrastructure located in the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.
The 2021 project, led by the Dubai Electricity and Water Authority (DEWA), has the capacity to produce about 20 kg of hydrogen per hour using solar energy. Some of the hydrogen produced by this plant was used to provision a service station at Expo City Dubai with the capacity to power around 500 fuel cell vehicles, thus preventing the emission of over 40 tonnes of CO₂.
We should also highlight the renewable hydrogen facility that Masdar and ENGIE have developed, with a capacity of up to 200 megawatts to supply Fertiglobe’s ammonia production plants in Ruwais.
Another key initiative under development is that of Emirates Steel, the only steel company in the Middle East to use renewable hydrogen on a pilot basis to produce environment-friendly steel. Together with Masdar, this company opened a pilot renewable hydrogen plant in Abu Dhabi at the end of 2024. It uses 2.1 MW to produce 5,000 tonnes of green steel.
The state-owned Masdar company has made a name for itself as one of the most ambitious global players in the hydrogen market
It’s clear that the state-owned Masdar company has established itself as one of the most ambitious players in the hydrogen market. In recent years it has signed partnerships with Japanese companies that include INPEX, Tokyo Gas and Osaka Gas to develop synthetic fuels such as e-methane, regarding renewable hydrogen as a vector.
At the same time, Masdar has recently collaborated with OMV from Austria to produce renewable hydrogen, sustainable synthetic aviation fuels and other synthetic chemicals. It has also teamed up with French company Hy24 through a fund amounting to over €2 billion for renewable hydrogen projects in Europe, the Americas, Asia Pacific, the Middle East and North Africa.
In 2024, another key player, the ADNOC (Abu Dhabi National Oil Company), invested in the Baytown project in Texas, USA, acquiring 35% of one of the world’s largest future low-carbon hydrogen facilities. The plant is expected to produce over one million tonnes of hydrogen each year once it starts up, foreseeably in 2029.
The United Arab Emirates has been working on its international relations in the field of the global hydrogen business for a number of years. This geopolitical strategy is already noticeable in the country’s participation in multilateral initiatives such as the COP28 talks.
Negotiations between the UAE and the European Union for a CEPA (Comprehensive Economic Partnership Agreement) are already underway, with renewable hydrogen identified as one of the key pillars. While the agreement is expected to cover trade in goods, services and investments, it will also prioritise strategic sectors such as, in this case, the development of renewable hydrogen supply chains.
The UAE has abundant sunshine, vast areas of available land, advanced industrial infrastructures and large-scale energy expertise
It would be an important step for the UAE in its quest to boost its role as an exporter of renewable hydrogen.
The success of this venture will also rely on a powerful combination of abundant sunshine, huge areas of available land, advanced industrial infrastructures and large-scale energy expertise. The UAE has some of the lowest solar generation prices in the world, drastically cutting down on the cost of producing renewable hydrogen. Similarly, its location between Asia, Europe and Africa makes it an ideal logistics hub for exports.
The transition to renewable hydrogen also constitutes a significant contribution to the UAE’s commitment to carbon neutrality by 2050. According to the official estimates, use of hydrogen in industrial sectors will cut emissions by up to 25% by 2031 and lead to full decarbonisation by the middle of the century.
The foregoing wouldn’t be possible without the country’s investment in changing its energy system and using cleaner sources. It’s already invested over €10 billion in this endeavour. In 2023, thanks to these investments, they managed to increase the amount of renewable energy they can produce by 70%, with their capacity totalling 6.1 gigawatts.
Almost 28% of the UAE’s energy now comes from renewable sources, and it has set a target of 32% by 2030.
Clearly, what’s happening in the UAE goes beyond a technical transition, as its aspiration is for it to be an economic transformation. If the plans take off as expected, the UAE could become one of the world’s leading suppliers of renewable hydrogen, strengthening its leadership of the post-oil era and actively contributing to the global climate goals.
