Gulf Nations Set to Shape Hydrogen Economy's Future
Abu Dhabi, Thursday, 6 November 2025.
Gulf nations are leveraging low-cost power and supportive policies to lead the hydrogen economy, promising cleaner industries and better energy security. It’s a crucial step for global sustainability.
Gulf’s Strategic Position in Hydrogen
The Gulf region’s vast oil reserves are well known, but its potential to lead the hydrogen economy is gaining attention. At the ADIPEC 2025 conference, experts highlighted how the Gulf’s low-cost power and strategic policy frameworks could anchor the next phase of global hydrogen development [1]. Saudi Arabia and Oman are at the forefront, with Saudi Arabia’s Neom Green Hydrogen project requiring 4.2 gigawatts of renewable power to produce 600 tonnes of hydrogen daily, marking it as one of the largest global projects [1]. Meanwhile, Oman is streamlining its approach with policy reforms and mid-sized projects [1].
Challenges and Opportunities
Despite its promise, the hydrogen economy faces hurdles. As noted by industry leaders, progress has been slower than anticipated due to a lack of committed buyers and regulatory unpredictability [1]. The high costs associated with hydrogen production, especially for green hydrogen, remain a sticking point [2]. The cost of a single 200MW electrolyser can reach approximately €500 million, necessitating strong market confidence and buyer commitment [1]. Yet, there’s optimism. Ammonia is emerging as a viable hydrogen carrier, with companies expanding facilities to reconvert ammonia back to hydrogen at destinations [1].
The Debate on Hydrogen’s Future
In a spirited debate, experts like Erik Rakhou and Michael Liebreich discussed whether hydrogen can truly anchor a future economy. While Rakhou champions hydrogen’s role in industrial decarbonization, Liebreich points to economic challenges and real-world application limitations [2][3]. They agree that for hydrogen to succeed, economic and environmental challenges must be addressed, with clear policy and financial commitments from governments and industry [2].
Moving Forward
The Gulf nations are poised to drive significant changes in the hydrogen landscape. They are not only setting ambitious targets but also establishing infrastructure to support hydrogen’s growth [1]. The transition towards a hydrogen economy requires strategic coordination between policymakers and industry leaders. With over 500 hydrogen projects globally and substantial investments, the Gulf’s role could be pivotal in steering the hydrogen economy towards a sustainable future [4].