Abu Dhabi skyline. The UAE aims to be among the top 10 hydrogen producers. Shutterstock
Abu Dhabi skyline. The UAE aims to be among the top 10 hydrogen producers. Shutterstock
Abu Dhabi skyline. The UAE aims to be among the top 10 hydrogen producers. Shutterstock
Abu Dhabi skyline. The UAE aims to be among the top 10 hydrogen producers. Shutterstock

UAE to launch national hydrogen strategy in April, official says


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The UAE, the Arab world’s second-largest economy, will launch its National Hydrogen Strategy next month, a Ministry of Energy and Infrastructure official has said.

“There was phase one, which happened last year, and whereby we came up with just the general skeleton and, right now, we are working on phase two,” said Dipak Sakaria, energy transition expert at the ministry, during the World Hydrogen Mena conference in Dubai on Wednesday.

Last year in September, the UAE signed an agreement with Australia’s GHD and Germany-based Fraunhofer-Gesellschaft to develop its strategy for the low-carbon fuel.

The Emirates, which aims to achieve net zero emissions by 2050, is bullish about hydrogen and has been drawing up a comprehensive road map to position itself as an exporter of the clean fuel and tap into its future potential.

Hydrogen, which can be produced using renewable energy and natural gas, is expected to play a key role in the coming years as economies and industries transition to a low-carbon world to mitigate climate change.

The UAE currently has 28 hydrogen projects “on board”, of which seven have passed the financing stage, Mr Sakaria said.

Globally, 520 million tonnes of hydrogen will be needed to achieve net-zero targets by 2050, according to the International Energy Agency.

French investment bank Natixis estimates that investment in hydrogen will exceed $300 billion by 2030.

It comes in various forms, including blue, green and grey hydrogen. Blue and grey hydrogen are derived from natural gas while green hydrogen is produced using renewable sources.

“The demand [for hydrogen] is here. If you look at net zero and if you look at the energy mix [targets], you will get all those numbers … the question is on the supply [side],” said Mr Sakaria.

“We have looked at, like, 18 sectors that are calling for a lot of hydrogen by 2030 to 2031.”

Green hydrogen is expected to play an important role in reducing emissions in hard-to-abate industries such as cement, steel, aluminium and petrochemicals.

The Emirates is investing Dh600 billion in clean and renewable energy projects over the next three decades.

It is building the Mohammed bin Rashid Solar Park in Dubai with a five-gigawatt capacity.

Abu Dhabi, which is developing a two-gigawatt solar plant in its Al Dhafra region, has set a target of 5.6 gigawatts of solar PV capacity by 2026.

The UAE, which plans to use its hydrogen for both domestic consumption and exports, will closely monitor the latest EU regulations that specify the requirements a hydrogen project developer must fulfil for the fuel produced to be categorised as “renewable”, said Nawal Alhanaee, director of the ministry's future energy department.

The new rules apply to hydrogen produced both inside and outside of the EU, which aims to import 10 million tonnes of renewable hydrogen by 2030.

Last month, Abu Dhabi’s clean energy company Masdar signed a preliminary agreement with four companies from the Netherlands to explore the development of a green hydrogen supply chain between Abu Dhabi and Amsterdam.

Andrea Fontana, the EU Ambassador to the UAE, told The National last month that green hydrogen was an area where the two regions could team up.

  • Dr Sultan Al Jaber, President-designate of Cop28, told the Atlantic Council Global Energy Forum that the world will require 'transformational' progress to meet net-zero targets. All photos: Antonie Robertson / The National
    Dr Sultan Al Jaber, President-designate of Cop28, told the Atlantic Council Global Energy Forum that the world will require 'transformational' progress to meet net-zero targets. All photos: Antonie Robertson / The National
  • The energy forum brings together heads of state, policymakers and industry leaders for dialogue on movement towards to a net-zero future.
    The energy forum brings together heads of state, policymakers and industry leaders for dialogue on movement towards to a net-zero future.
  • Delegates at the Atlantic Council Global Energy Forum in Abu Dhabi on Saturday.
    Delegates at the Atlantic Council Global Energy Forum in Abu Dhabi on Saturday.
  • Suhail Al Mazrouei, Minister of Energy and Infrastructure, speaks to media on the sidelines of the event.
    Suhail Al Mazrouei, Minister of Energy and Infrastructure, speaks to media on the sidelines of the event.
  • Amos Hochstein, special presidential co-ordinator for global infrastructure and energy security with the US Department of State, addresses a session.
    Amos Hochstein, special presidential co-ordinator for global infrastructure and energy security with the US Department of State, addresses a session.
  • The Atlantic Council Global Energy Forum is a part of the Abu Dhabi Sustainability Week, which will run from January 14 to January 19.
    The Atlantic Council Global Energy Forum is a part of the Abu Dhabi Sustainability Week, which will run from January 14 to January 19.
  • Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, was named as president-designate of the UN Cop28 climate change summit, which will be held in the UAE this year.
    Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, was named as president-designate of the UN Cop28 climate change summit, which will be held in the UAE this year.
The bio:

Favourite film:

Declan: It was The Commitments but now it’s Bohemian Rhapsody.

Heidi: The Long Kiss Goodnight.

Favourite holiday destination:

Declan: Las Vegas but I also love getting home to Ireland and seeing everyone back home.

Heidi: Australia but my dream destination would be to go to Cuba.

Favourite pastime:

Declan: I love brunching and socializing. Just basically having the craic.

Heidi: Paddleboarding and swimming.

Personal motto:

Declan: Take chances.

Heidi: Live, love, laugh and have no regrets.

 

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Updated: March 01, 2023, 12:45 PM