Saudi Arabia has the Potential to Produce Green and Blue Hydrogen Internationally—Study Says

Published on: 26 April 2022
by KnowESG
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According to a study commissioned by the King Abdullah Petroleum Studies and Research Center (KAPSARC), Saudi Arabia has the potential to produce green and blue energy globally. The report was released in the "Economics and Resource Potential of Hydrogen Production in Saudi Arabia". The country's sustainable efforts support the Saudi Green Initiative launched in 2021.

The cost of manufacturing blue and green hydrogen is expected to be $1.34/kg and $2.16/kg, respectively, based on current domestic gas prices and the average auction price of renewable energy projects granted in 2020.

Furthermore, depending on the hydrogen carrier employed, the transported cost of hydrogen from Saudi Arabia's western region to the Port of Rotterdam via the Suez Canal will range between $3.50/kg and $4.50/kg by 2030.

In Europe, the predicted cost of green hydrogen production in 2030 is estimated to be between $3 and $5 per kilogramme.

The report also emphasised the Kingdom's geographical resource distribution, noting that the eastern region is more likely to create and export blue hydrogen, but green hydrogen production is best suited in the western region, which is remote from the local oil and gas clusters.

Fahad Al-Ajlan, President KAPSARC, said: "As countries commit to a low-carbon future, Saudi Arabia’s hydrogen production outlook presents tremendous opportunities for the Kingdom and other countries in their energy transition."

The study comes after the Kingdom announced in March that construction on Helios, a $5 billion green hydrogen plant in NEOM, had officially begun, as the country pushes ahead with plans to export the carbon-free fuel in about four years, with the majority of demand expected to come from Europe and Asia.

The Saudi Green Initiative, which was introduced in October 2021 and pledged over $186 billion (SAR 700 billion) in investment to help establish a green economy, which aligns with the Kingdom's hydrogen ambitions.