Green hydrogen is a type of hydrogen produced through the electrolysis of water using renewable energy sources. The process of electrolysis splits water molecules into hydrogen and oxygen atoms using an electric current. The hydrogen produced can be used in a variety of ways, including as a fuel for vehicles or as a way to store energy. A key advantage of green hydrogen is that it does not produce greenhouse gas emissions when used. This is in contrast to traditional hydrogen, which is produced from natural gas and emits carbon dioxide when burned. Green hydrogen can therefore help to reduce greenhouse gas emissions and combat climate change.

Several green hydrogen projects are being lined up in countries such as Oman, Egypt, Saudi Arabia, Morocco, and UAE amongst others. At present, there are over 45 known green hydrogen and ammonia projects across the MENA region, with an expected total budget of over USD 92 billion.

Middle East/North Africa (MENA) Green Hydrogen Market Scope and Report Structure

Market Trends and Drivers

Rise in investment in Green Hydrogen is anticipated to augment industry growth.

The Government is focused on decarbonizing the MENA economy, in which green hydrogen would play a crucial role. Saudi Arabia and the United Arab Emirates are portraying themselves as frontrunners. For instance, in 2021, Saudi Arabia formed a strategic green hydrogen development alliance with Germany to generate, process, utilize, and transport clean hydrogen, marking a significant step forward as the Kingdom ramps up its green hydrogen production. “The development of green hydrogen is now being driven mostly by hydrogen developers such as NEOM, ACWA Power, Masdar, and OQ.” These players are aided by the public sector, which is responsible for enabling factors such as hydrogen valleys, access to technology, clear legislation, and the availability of human resources.

The International Renewable Energy Agency projects that by 2050, hydrogen and its derivatives will be able to supply 12% of the world’s energy needs, making green hydrogen one of the major pillars of the energy transition. The UAE aims to acquire 25% of the worldwide hydrogen market, while Saudi Arabia hopes to become the world’s largest provider. Oman and Egypt are two other countries in the region making significant improvements. As of now, Siemen’s several green hydrogen projects across the Middle East and Africa are in the works. More than 40 investments totaling more than $20 billion have been announced for the period up to 2030, in addition to numerous smaller projects. Countries like Saudi Arabia have announced massive investments in hydrogen. Dubai and Qatar are also investing in hydrogen and solar panels, which again are an enabler for green hydrogen production.

Further, the green hydrogen cost development by technology is declining year-on-year. This is further expected to lead to the demand for green hydrogen market.

Rising demand for hydrogen in the fuel cell-based automobile sector is anticipated to stimulate industry growth.

The automotive and transportation sectors are currently experiencing rapid technical improvement as a result of numerous government efforts to minimize carbon emissions from vehicles. Moreover, large investments have been made in electric and hydrogen fuel cell vehicles as a result of growing environmental concerns and the quick emergence of inventive hydrogen fuel stations around the MENA region. For instance, in April 2022, PowerTap Hydrogen Capital  Corp., announced partnership with Viridian Hydrogen UAE  to help establish a hydrogen  ecosystem in UAE  and throughout the middle east to meet the demand  for alternative fossile fuel. Similarly, Mitsubishi Power is involved in exciting hydrogen power projects in MENA, such as at Alexandria National Refining and Petrochemicals Company (ANRPC) in Egypt, enabling a refinery boiler to fire up to 100% hydrogen by the end of next year. Such aforementioned factors anticipated to positively influence industry growth.  Furthermore, in order to address the rising demand for hydrogen fuel from a variety of end-use sectors, manufacturers are primarily concentrating on expanding the supply of FCEVs in the Middle East. For instance, in September 2020, Hyundai Motor exported four fuel cell electric vehicles to Saudi Arabia, its first-ever FCEV exports to the Middle East.

Demand for carbon-free steel is expected to increase in the coming year as people become more aware of the benefits of using carbon-free products. The increasing use of carbon-free steel in a variety of applications, such as construction projects, automobiles, electrical appliances, cargo ships, and surgical scalpels, is likely to drive the market over the forecast period.

Market Restraints and Challenges

One of the key challenges will be supporting the Middle East’s transition away from reliance on grey hydrogen to clean green hydrogen, particularly in industrial applications such as chemicals, cement, and iron and steel manufacturing. Further, transportation risk and cost attached with hydrogen along with lacking storage infrastructure may hinder industry growth.

The most important aspect that raises the price of manufacturing hydrogen using the electrolytic process is the price of electricity. Additionally, the real and anticipated prices of renewable hydrogen have decreased due to the recent substantial reduction in the cost of solar and wind energy. For instance, according to the International Renewable Energy Agency (IRENA) report, the global weighted average cost of electricity could fall by 26% from onshore wind, by 35% from offshore wind, by at least 37% from concentrating solar power (CSP) technologies, and by 59% from solar photovoltaics (PV) by 2025. This has led more potential end users to look closely at whether renewable hydrogen is becoming a competitive way to meet their needs and reduce their environmental impact.

Moreover, high capital expenditure is a significant challenge in the hydrogen electrolyzer sector. As the equipment requires high operating cost, small-scale and pilot plants cannot afford the capital investment, which is expected to hamper sales of hydrogen electrolyzers. However, efforts are being made to develop innovative products with lower operating costs. Key players are also working to maintain a seamless supply chain and production lines in order to minimize the price of hydrogen electrolyzers. Further, transportation risk and cost attached with hydrogen along with lacking storage infrastructure may hinder industry growth.

Middle East/North Africa (MENA) Green Hydrogen Market Segmental Overview

The report analyses the Middle East/North Africa (MENA) green hydrogen market based on technology, application, and country.

Middle East/North Africa (MENA) Green Hydrogen Market by Technology

Based on technology, it is segmented into proton exchange membrane (PEM) electrolyzer, alkaline electrolyzer, and others. Among these, alkaline electrolyzer segment accounted for the largest market share in 2021 due to it being the conventional electrolyzer technology used in green hydrogen projects. As compared to PEM electrolyzers, alkaline electrolyzers use a liquid alkaline solution of potassium or sodium hydroxide as its electrolyte and have longer running hours.  Additionally, alkaline electrolyzers have lower power and current densities with an operating temperature range of 100 to 105 degrees Celsius compared to 70-to-90-degree Celsius ranges of PEM electrolyzers. Furthermore, alkaline electrolyzes are projected to rise due to their low cost as compared to PEM electrolyzers are some of the major factors that may have a beneficial impact on segmental growth.

Middle East/North Africa (MENA) Green Hydrogen Market by Application

Based on the application, the Middle East/North Africa (MENA) green hydrogen market is divided into power generation, chemical feedstock, transportation, and others.  Of these above transportation segment is set to witness a significant CAGR through 2040. This growth is attributed to transportation, hydrogen can be used in fuel cells or internal combustion engines. Because of its energy efficiency, a hydrogen fuel cell is two to three times more efficient than an internal combustion engine fueled by gasoline. For instance, Alstom pioneers hydrogen mobility for rail to forge a sustainable future for transportation in the Middle East and North Africa. Similarly, Saudi Arabia signed eight preliminary agreements with the planned carbon-free city of Neom, the Red Sea Development Co. and other key national entities for the development of hydrogen fuel cell-based transportation and production of sustainable jet fuel, according to the country’s energy ministry.

 Geographical Analysis of Middle East/North Africa (MENA) Green Hydrogen Market

Country-wise, it is studied across UAE, Saudi Arabia, Qatar, Kuwait, Egypt, Morocco, Oman and Rest of MENA. Saudi Arabia green hydrogen market revenue is poised to grow significant CAGR during the forthcoming years. This is attributed to the massive investments made by the Saudi Arabian companies, aiming for an energy transition into a clean hydrogen-based economy over the coming years. For instance, EGYPT. Saudi company Alfanar has signed a memorandum of understanding with the Egyptian government to build a green hydrogen production plant at the Ain Soukhna port site. the company said the facility will produce 500,000 tons of green ammonia, used in agricultural fertilizers, from 100,000 tons of green hydrogen per year. The investment is expected to reach $3.5 billion. Additionally, Saudi Arabia hopes to attract more than $36 billion of investment by 2030 under its National Hydrogen Strategy will fuel the country market growth in the coming year.

Moreover, Saudi Arabia is building a $5 billion green hydrogen project in NEOM, powered by renewable energy, to supply 650 tons of carbon-free hydrogen daily. The companies will use 120 Thyssenkrupp AG electrolyzers, each of them about 40 meters long, to split hydrogen from water. The fuel will be shipped from Saudi Arabia as ammonia, which is easier to transport than hydrogen in gaseous form. This sort of development along with projects under pipeline in Saudi Arabia will significantly aid the growth of the green hydrogen industry in the country in the foreseeable future.

COVID-19 Impact

COVID-19 outbreak has moderately impacted the green hydrogen industry landscape. The consumption of utilities including electricity was negatively impacted in early 2020 with a slowdown in annual growth. The imposition of partial to complete lockdown measures in response to COVID-19 led to an economic downturn in almost all countries and territories worldwide. The shortage in liquidity forced downsizing and other cost-cutting measures like reduced budgets for attending events and pay cuts. COVID-19 would however accelerate the need for reducing carbon emission by a couple of years which would mean an increased demand for green hydrogen in the future.

The COVID-19 outbreak has significantly affected numerous verticals such as the oil refining industry, chemical sector and steel manufacturing industry currently have witnessed huge hydrogen demand which the covid-19 outbreak has significantly impacted. Developing countries such UAE, Saudi arabia, oman Qatar, Kuwait largely focus on integrating clean power energy generation technologies have witness a setback by the outbreak of deadly disease.  Also, several countries in MENA region participating in clan energy installation. Such a factors positively influence the industry expansion.

MENA Hydrogen Electrolyzer Market

A hydrogen electrolyzer is a device that uses electrolysis to produce hydrogen gas. Electrolysis is a process that uses an electric current to split water molecules into hydrogen and oxygen atoms. Hydrogen electrolyzers are used in a variety of applications, including fuel cells, chemical production, and water treatment.

One of the most common ways of producing green hydrogen is through a process called electrolysis of water. In this process, (renewable) energy is used by an electrolyzer to split water into hydrogen and oxygen. Electrolyzers can range in size from small to large-scale, and can be used for a variety of applications, such as for renewable energy storage and buffering or to generate hydrogen for industry feedstock. Currently, the main electrolysis technologies are alkaline and PEM (Proton Exchange Membrane). For instance, ITM Linde Electrolysis (ILE) joint venture, is one of the world leading suppliers of PEM electrolyzer technologies, which means that their customers can rely on them for end-to-end, integrated green H2 solutions.

Green Hydrogen Projects

• The Oman-based Green Energy Oman (GEO) project is one of the largest announced projects in the region so far. This project is being built by OQ, the integrated energy company of the Sultanate of Oman, EnerTech, a Kuwait government-backed clean energy investor and developer, and InterContinental Energy, the leading dedicated green fuels developer. The capacity of the project is 25 GW and it will produce 1.8 million tonnes of green hydrogen from an estimated 14GW electrolyzer. The green hydrogen produced will be used to generate approximately 10 million tonnes of green ammonia per annum as the end product and it is scheduled to be commissioned in 2032.
• CWP Global is currently developing two green hydrogen projects in the MENA region – 30GW solar and wind Aman project in Mauritania and the 15GW solar and wind Amun project in Morocco.
• The United Arab Emirates energy companies, Abu Dhabi National Oil Company (ADNOC) and Masdar, will join British energy giant, BP’s H2Teesside and HyGreen Teesside hydrogen projects
• In July 2021, Ireland-based Fusion Fuel Green PLC, a green hydrogen technology company along with the Morocco government unveiled the HEVO Ammonia Morocco project. The project is one of the largest green hydrogen and green ammonia project in Morocco, with an estimated total investment value of around $850 million. It is expected that the project would be jointly developed by Consolidated Contractors Group S.A.L. (CCC) and Fusion Fuel. Besides, Vitol, a leading energy and commodities company, will manage the offtake of the green ammonia. The project, when fully commissioned, is expected to produce nearly 183,000 tons of green ammonia as well as abate 280,000 tons of CO2 annually.

Major Players in the Middle East/North Africa (MENA) Green Hydrogen Market

The key players in the Middle East/North Africa (MENA) green hydrogen market are Hydrogen System, Air Liquide, Siemens Energy (Siemens AG), ENGIE, Cummins, Air Product, Thyssenkrupp, Linde plc., McPhy Energy, and Aashi  Kasei Corporation, CWP Global, Total Eren, OQ, InterContinental Energy, EnerTech, Scatec, ACME, Globeleq, K&K Group, EDF, Renew Power, Hassan Allam Holding, Tatweer, among others.

Recent Developments

• In August 2022, Saudi’s Alfanar and SCZone launched $3.5 billion green hydrogen project in Egypt.
• In November 2021, Scatec and its partners, OCI NV, Fertiglobe, The Sovereign Fund of Egypt and Orascom have selected Plug Power Inc. (NASDAQ: PLUG) as the technology provider of electrolyser for the 100 MW green hydrogen facility to be built at the Egyptian Basic Industries Corporation SAE (EBIC)’s facility in Ain Sokhna, Egypt.
• In November 2021, DNOC and Abu Dhabi National Energy Company launched a New Green Hydrogen Venture. The new strategic partnership will focus on domestic and internation renewable energy
• In May 2021, Siemens Energy, in collaboration with Dubai Electricity and Water Authority (DEWA) and Expo 2020 Dubai, has inaugurated the first industrial scale, solar-driven green hydrogen facility in the Middle East and North Africa.

MENA Green Hydrogen Market Report Coverage

• The report offers a comprehensive quantitative as well as qualitative analysis of the current MENA Green Hydrogen Market outlook and estimations from 2021 to 2040, which helps to recognize the prevalent opportunities.
• The report also covers qualitative as well as quantitative analysis of MENA Hydrogen Electrolyzers Market in terms of revenue ($Million) and Capacity (GW).
• The report includes list of green hydrogen projects as well as analysis of hydrogen electrolyzer market in the MENA region.
• Major players in the market are profiled in this report and their key developmental strategies are studied in detail. This will provide an insight into the competitive landscape of the MENA Green Hydrogen industry.
• A thorough analysis of market trends and restraints is provided.
• By country market analysis is also presented in this report.
• Porter’s five forces analysis, SWOT analysis, COVID-19 impact analysis, Russia-Ukraine war impact, and PESTLE analysis of the MENA Green Hydrogen Market are also analyzed.

Frequently Asked Questions

Q. What is the Middle East/North Africa (MENA) green hydrogen market growth rate?

Ans. The growth rate of the Middle East/North Africa (MENA) green hydrogen market is very significant.

Q. Which country holds a major market share for the market?

Ans. UAE holds a major market share of the Middle East/North Africa (MENA) green hydrogen market in 2021.

Q. Which segment accounted for the largest Middle East/North Africa (MENA) green hydrogen market share?

Ans. By technology, the alkaline electrolyzer segment accounted for the largest Middle East/North Africa (MENA) green hydrogen market share in 2021.

Q. Who are the key players in the Middle East/North Africa (MENA) green hydrogen market?

Ans. The Middle East/North Africa (MENA) green hydrogen market report includes players such as Hydrogen System, Air Liquide, Siemens Energy (Siemens AG), ENGIE, Cummins, Air Product, Thyssenkrupp, Linde plc., McPhy Energy, and Aashi  Kasei Corporation, among others.

Q. What are the factors driving the Middle East/North Africa (MENA) green hydrogen market growth?

Ans. The major factors driving the growth of the market are increasing production capabilities for green hydrogen and rising demand for hydrogen-fueled vehicles across MENA region.

Q. What are the key growth strategies of Middle East/North Africa (MENA) green hydrogen market players?

Ans. The key growth strategies of Middle East/North Africa (MENA) green hydrogen market players are partnership and business expansion.