The Opportunities and challenges for Hydrogen in Saudi Arabia
Climate, Energy & Utilities Focus
The global energy sector is pivoting towards sustainable and environmentally friendly sources of energy in response to the urgent need to find alternatives to conventional fossil fuels.
Law Update: Issue 372 - Climate, Energy & Utilities Focus
Kowther AlKarimiAssociate,Corporate Commercial
The global energy sector is pivoting towards sustainable and environmentally friendly sources of energy in response to the urgent need to find alternatives to conventional fossil fuels. The need for change was given additional impetus by the Paris Agreement 2015 which, amongst other things, sets out framework for the achievement of net zero carbon emissions by 2050.
Hydrogen has several unique characteristics that foreshadow it making it an important contribution in the global push to reduce carbon emissions and fossil fuel dependency.
First, it is an energy vector (as opposed to an energy source) – this means hydrogen transports energy in a usable form from one point to another.
Second, hydrogen can be stored and transported in a stable way and stored for long periods (e.g. if transported by sea). Hydrogen can also be combined with carbon or nitrogen to make hydrogen-based fuels or used as an industry feedstock.
Third, hydrogen has the highest energy content of any fuel by mass.
So-called blue, grey, and green hydrogen are distinguished by their production methods. Blue hydrogen is produced from natural gas using steam methane reforming (SMR) but incorporates carbon capture and storage (CCS) to reduce CO2 emissions. Grey hydrogen, also derived from natural gas through SMR, releases significant CO2 emissions, while green hydrogen is generated from renewable energy resources producing no CO2 emissions at all. Currently most of the initiatives being developed in Saudi Arabia are focused blue and green hydrogen production.
The production of blue hydrogen involves capturing CO2 emissions that would otherwise be released into the atmosphere, making it a more sustainable option than grey hydrogen. Green hydrogen, on the other hand, is produced without any carbon emissions, utilizing renewable resources like wind or solar power.
The versatility of hydrogen as an energy carrier cannot be overstated. It can generate electricity, heat, water, ammonia, synthetic fuels, and various chemicals.. Its clean-burning nature present significant potential in reducing greenhouse gas emissions, thereby making it an attractive alternative to traditional fossil fuels.
The prevailing legal and regulatory landscape in Saudi Arabia regarding energy production unsurprisingly focuses heavily on hydrocarbons such as fossil fuels and natural gas.A regulatory framework needs to be developed to address the entire value chain for hydrogen, from the capture of carbon emissions to the eventual export and distribution of blue ammonia. Another key challenge is to align domestic and international standards around the technology required to utilize blue hydrogen.
Despite its promise, the hydrogen sector faces several challenges that must be addressed to realize its full potential in addition to the absence of regulatory framework for hydrogen. These include transportation costs and storage specification. Transporting hydrogen can be costly due to the requirement for a specialized infrastructure such as high-pressure tanks because of its low energy density. The storage of hydrogen requires advanced technological solutions.
Increasing reliance on hydrogen would significantly contribute to reducing greenhouse gas emissions and the development of a comprehensive regulatory framework for hydrogen, can pave the way for Saudi Arabia to achieve a leadership role in the global shift towards clean and sustainable energy. As the demand for cleaner energy solutions continues to grow, addressing these challenges will be crucial for unlocking the full potential of hydrogen.
For further information,please contact Kowther AlKarimi.
Published in December 2024
