IT'LL DO BOTH BY 2030:

Green hydrogen, a climate-friendly energy carrier obtained by splitting water molecules using electrolysis powered by renewables, is emerging as a clean fuel of the future to power transportation and energy-intensive industries such as steel manufacturing.

For the Arab Gulf states, which have some of the highest solar exposures in the world, the prospect of exporting large volumes of renewable electricity in the form of hydrogen is a timely opportunity as they attempt to diversify away from oil and gas revenues. In the United Arab Emirates (UAE), three state-run entities formed the Abu Dhabi Hydrogen Alliance to position the fossil fuel-rich emirate as a major exporter of blue and green hydrogen.

"The expansion of the hydrogen market is part of a very large, deep, gigantic movement to transform the world's energy systems toward green energy sources," Mestrallet told Al-Monitor. Although estimates vary widely, a European Union report said analysts predict clean hydrogen could meet 24% of world energy demand by 2050.

Yet green hydrogen remains a lot more expensive than other fuels, and S&P Global Ratings estimated that the climate-friendly energy carrier's production costs would need to "fall by over 50% to $2.0-$2.5/kg" to become a "viable alternative to conventional fuels."

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