Saudi Arabia's Bold $10 Billion Bet on Green Hydrogen
Riyadh, Monday, 21 July 2025.
Saudi Arabia plans to invest $10 billion in green hydrogen, aiming to lead the global market. However, scalability challenges and only partial output commitments could test its long-term success.
Saudi Arabia’s Green Hydrogen Vision
Saudi Arabia is taking a colossal leap into the realm of green hydrogen with a $10 billion investment aimed at dominating the global market. This initiative is nestled within the ambitious Neom project, which might sound like something out of a science fiction novel, but it’s very real indeed. By 2030, Saudi Arabia aspires to pump out enough green hydrogen to account for 15% of the world’s blue hydrogen and produce 1 million tonnes of green hydrogen annually [1]. This all sounds very impressive, but there’s a ‘small’ catch: currently, they’ve only secured one-third of the intended output. It’s like having a flashy sports car but only being able to drive it on half a tank [1].
Challenges and Opportunities
So, what’s the deal with scalability? The Neom project’s costs have already ballooned faster than a balloon animal at a child’s birthday party, rising from $5 billion to $8.4 billion [1]. With such high stakes, it’s crucial for Saudi Arabia to secure all off-take agreements. It’s a high-conviction bet on the energy transition, but as one analyst cleverly put it, it requires a ‘nuanced approach’ [1]. This is more than just a local issue, as the European hydrogen regulatory landscape continues shifting like sand dunes in the desert, adding another layer of uncertainty to the stew [1].
Technological Edge
Looking at the numbers and ambitions, one wonders: what’s driving this bold move into the hydrogen future? Apart from ample funds, thanks to low renewable energy costs and existing infrastructure, Saudi Arabia is ideally positioned to capture a significant slice of the global pie. With strategic partnerships aimed at reducing the energy intensity of hydrogen production, ACWA Power, a critical player, is partnering with Hysata to deploy groundbreaking technology. This involves utilising capillary-fed electrolysis technology to enhance revenues and keep the hydrogen rolling [1].
Global Industry Movements
Meanwhile, the European Investment Bank has thrown its hat into the hydrogen ring, approving financing for a green hydrogen project in Paraguay. This move reinforces the explosive growth expected in the green hydrogen market, projected at a mighty CAGR of 30-40% through 2030. This isn’t just some pie-in-the-sky dream; it’s an industry on the brink of revolutionary change, driven by a collective need to decarbonise sectors like mobility and steel [1].
Future Prospects
Still, with Saudi Arabia eyeing such massive stakes, the pressure is on. The kingdom’s budget and debt levels might constrain future investments, signaling a significant hurdle to watch out for. As they aim for a $250 billion asset base by 2030, the careful calibration of fiscal and project strategies will be necessary to sustain this green hydrogen juggernaut [1].