In the GCC, large-scale green hydrogen production is likely to trail behind blue hydrogen, according to a report published by ratings agency Moody's Investors Service on Thursday and picked up by Zawya yesterday. The GCC’s access to cheap domestic natgas, local carbon capture and storage (CCS) expertise, and available infrastructure will make blue hydrogen production more feasible than the “more costly and challenging” green hydrogen — in the short-to-medium term, Zawya notes the report saying.

Significant investment in tech and infrastructure for storage and transportation is still needed to make GCC green hydrogen projects commercially viable, the report notes. Green hydrogen production growth is also hindered by “substantial delays in auctioning processes” faced by the region’s renewables projects, it adds.

But long-term supply and export potential is there: In the long-term, the UAE, Saudi Arabia and Oman could all be green hydrogen producers and exporters, Moody’s tells us, because of their access to cheap renewable energy and water desalination expertise.

Egypt leads the pack in MENA in terms of the value of green hydrogen projects, with some USD 63.8 bn — just over 35% of the USD 180 bn regional total.

• Morocco has announced some USD 16.85 bn worth of projects.

The GCC has a pipeline with some USD 70 bn. According to data from MEED in early October:

• Oman has announced USD 48.9 bn worth of projects,
• Saudi Arabia: USD 10.5 bn
• The UAE: USD 10.3 bn

The Moody’s report makes the economic case for GCC green hydrogen project development: Both green and blue hydrogen could offset the economic and fiscal impact on the GCC of lower global oil demand and prices when the energy transition gathers steam, the report notes.

But only green hydrogen could reduce GCC countries’ “heavy” hydrocarbon reliance and “underlying credit exposure to longer-term carbon transition risks,” it adds. Both green and blue hydrogen have a role in emissions reduction, it notes.

SOUND SMART- What’s the difference between green and blue hydrogen? Both involve splitting water via electrolysis. But while green hydrogen is produced using renewable energy, blue hydrogen production is powered by fossil fuels, using carbon capture to prevent CO2 from being released into the atmosphere.