UAE Advances as Regional Leader in Hydrogen Production and Carbon Capture Technologies

The United Arab Emirates (UAE), particularly Abu Dhabi, has long been a dominant force in the global energy sector. While widely recognized for its oil and gas production, the UAE has also been a trailblazer in adopting and developing new technologies that contribute to global decarbonisation efforts. Key entities such as Abu Dhabi Future Energy Company PJSC (Masdar), Abu Dhabi National Oil Company (ADNOC), Abu Dhabi National Energy Company PJSC (TAQA), Emirates Water and Electricity Company (EWEC), and Mubadala Investment Company PJSC (Mubadala) have played pioneering roles in this transformation.

Currently, the UAE is focusing on advancing carbon capture and storage (CCS) alongside low-carbon hydrogen production as the next frontier in energy innovation. These sectors are poised to benefit from the UAE’s unique advantages, including existing oil and gas infrastructure, engineering expertise, and renewable energy resources.

The UAE’s National Hydrogen Strategy articulates the country’s ambition to become a leading producer and exporter of hydrogen while pursuing Net Zero emissions by 2050. The strategy targets capturing a significant share of the global hydrogen market and integrating hydrogen into domestic industries such as steel, cement, and transportation.

CCS forms a critical pillar of the UAE’s net-zero roadmap. The UAE Net Zero by 2050 initiative includes substantial investments in carbon capture technologies, with ADNOC spearheading efforts to scale CCS capacity. Notably, the UAE is the first country in the Middle East and North Africa (MENA) region to set such a target. This approach aligns with regional initiatives, particularly in Saudi Arabia, to develop CCS infrastructure and establish a regional hub for carbon dioxide (CO2) storage and utilization, consistent with the UAE’s commitment to the Paris Agreement.

The UAE’s competitive edge in hydrogen and CCS stems from several factors. It can repurpose existing oil and gas infrastructure, including CO2 pipelines and enhanced oil recovery systems, to support large-scale hydrogen and CCS projects. The country also hosts the world’s largest solar farms, providing renewable power essential for green hydrogen production. Furthermore, the UAE benefits from established export networks to key markets such as Europe, Japan, and South Korea.

Following the global adoption of carbon regulations, especially within the European Union, major UAE industries like steel, aluminium, and cement are transitioning to hydrogen-based processes and exploring CCS integration to reduce emissions and maintain access to international markets.

Public and private investments underpin the UAE’s hydrogen and CCS initiatives, with government entities and state-owned companies playing central roles. A notable development is the establishment of XRG, an $80 billion energy investment platform within ADNOC. XRG’s Low Carbon Energies platform is dedicated to investing in decarbonisation technologies and low-carbon energy solutions to meet growing demand and drive economic growth during the energy transition. The market for low-carbon ammonia alone is projected to expand by 70 to 90 million tonnes annually by 2040.

In May 2021, the UAE commissioned its first green hydrogen plant in Dubai, the MENA region’s inaugural solar-driven green hydrogen facility. Developed through a $14 million public-private partnership, the plant is located at the Mohammed bin Rashid Al Maktoum Solar Park, which aims for a total capacity of 5GW by 2030. The facility uses solar photovoltaic electricity to produce 20 kilograms of hydrogen per hour, which is stored and utilized by the Dubai Electricity and Water Authority (DEWA) to support electricity generation.

ADNOC is advancing large-scale blue and green hydrogen projects by leveraging its existing gas infrastructure. It has partnered with Mubadala Investment Company PJSC and Abu Dhabi Developmental Holding Company (ADQ) to form the Abu Dhabi Hydrogen Alliance, aiming to position the UAE as a key hydrogen exporter.

Hydrogen-related investments are also prominent in Khalifa Economic Zones Abu Dhabi (KEZAD). AD Ports Group and Masdar are exploring the creation of a green hydrogen production hub within KEZAD to serve both domestic and export markets. This hub could include export terminals for green products, attracting further investment into Abu Dhabi’s green hydrogen value chain and offering opportunities for current and future tenants of KEZAD and Khalifa Port to develop green industries.

ADNOC and ADQ are collaborating on the TA’ZIZ Industrial Chemicals Zone in Ruwais, anticipated to become a major hydrogen and ammonia hub. This facility is expected to reinforce Abu Dhabi’s leadership in low-carbon fuels and capitalize on rising demand for low-carbon ammonia as a clean hydrogen carrier. In November 2024, TA’ZIZ awarded engineering, procurement, and construction contracts exceeding $2 billion (AED 7.34 billion) for essential site infrastructure development. A preliminary life cycle assessment indicates that phase one of the plant will produce ammonia with 50 percent lower carbon intensity compared to conventional methods, with further emissions reductions planned through carbon capture in subsequent phases. The project involves partnerships with Japanese and Korean entities.

ADNOC has also signed agreements with Germany and Japan to supply blue ammonia, solidifying the UAE’s role as a major hydrogen exporter. In 2024, ADNOC completed its first certified low-carbon ammonia shipment to Japan for power generation use.

An industrial-scale green hydrogen-to-ammonia project is underway through a partnership between TAQA and Abu Dhabi Ports. This initiative includes a 2 GW solar photovoltaic power plant dedicated to producing green hydrogen, which will be converted into liquid ammonia. The ammonia will serve as bunker fuel for ships and be exported via specialized gas carriers from Abu Dhabi Ports. The solar farm, electrolyser, and ammonia production plant will be located within KEZAD, with a pipeline connection to Khalifa Port enhancing export capacity to international markets including Europe and East Asia.

ADNOC has a proven track record in CCS, operating Al Reyadah, the world’s first commercial-scale facility capturing and storing CO2 from the steel industry. Operational since 2016, Al Reyadah captures up to 800,000 tonnes of CO2 annually from Emirates Steel Industries and injects it into oil fields for enhanced oil recovery.

ADNOC plans to expand CCS capacity to 5 million tonnes per year by 2030. A significant project in this regard is the Habshan CCS facility, a $615 million investment by ADNOC Gas plc. In 2023, ADNOC awarded a $615 million EPC contract to Petrofac Emirates for constructing carbon capture units, pipeline infrastructure, and CO2 injection wells at the Habshan gas processing plant. Scheduled to become operational in 2026, the facility will capture and permanently store 1.5 million tonnes of CO2 annually in geological formations, contributing substantially to ADNOC’s goal of reducing carbon intensity by 25 percent by 2030.

The UAE’s hydrogen policy framework is established through the UAE Energy Strategy 2050, the UAE National Hydrogen Strategy, and the Low-Carbon Hydrogen Regulatory Framework. These policies foster hydrogen project development and CCS integration to reduce industrial emissions. A clear regulatory framework for hydrogen is a key component of the National Hydrogen Strategy’s action plan.