Abu Dhabi National Oil Company, Mubadala and industrial holding company ADQ signed an agreement to form a hydrogen alliance focusing on low-carbon green and blue hydrogen as part of the UAE’s continued energy diversification efforts.
The alliance will look to establish Abu Dhabi as a "trusted exporter of hydrogen to emerging international markets and build a substantial green hydrogen economy in the UAE", according to a statement by the Abu Dhabi Media Office on Twitter.
The announcement follows plans revealed by Adnoc to establish a 'hydrogen ecosystem' as part of its latest spending push.
In November, the state oil company said it plans to ramp up production of hydrogen, which is already used in its downstream sector. The increased production will help meet emerging global demand for the gas and for ammonia derived from it.
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
The alliance plans to develop a roadmap to accelerate the adoption and use of the lighter, cleaner gas in the UAE across major sectors such as utilities, mobility and industry.
Under the agreement, the three companies will align their approach to position Abu Dhabi as a "reliable and secure supplier of hydrogen and its carriers to customers around the world".
Adnoc plans to explore "green hydrogen opportunities" and will place "special emphasis" on pursuing blue hydrogen projects by expanding on its existing hydrogen capacity, leveraging significant gas reserves and infrastructure, Dr Sultan Al Jaber, UAE minister of industry and advanced technology and Adnoc Group chief executive, said.
"Working together as an alliance, we will identify viable international market opportunities, while we develop a roadmap to create hydrogen production sites in Abu Dhabi, and the UAE," he added.
Grey hydrogen refers to the manufacture of the gas using fossil fuels and currently accounts for 95 per cent of production. Blue hydrogen is extracted from natural gas, through a process called methane reformation, which relies on carbon capture and storage. Green hydrogen, which refers to the gas produced entirely from renewable sources is a relatively expensive way to produce the clean fuel.
Hydrogen has become increasingly important in the energy mix of several oil-producing states in the Middle East.
Saudi Arabia, the world's largest oil exporter, is also putting together a strategy to develop hydrogen production capabilities as it looks for newer, alternative fuels to be part of its energy mix.
Mubadala's focus on hydrogen is part of its engagement in "new energy investments that will contribute to more efficient and lower-emission energy solutions," said Khaldoon Al Mubarak, managing director and group chief executive at the Abu Dhabi-based investment company.
"Hydrogen offers significant potential in this regard and with the renewables expertise and experience of Masdar, we are well placed to develop leadership in the green hydrogen value chain," he added. Masdar, which is owned by Mubadala is a renewable energy developer with a global footprint.
Presently, Adnoc produces 300,000 tonnes of hydrogen annually for use in its downstream operations. The company plans to expand its manufacturing capacity for the gas to more than 500,000 tonnes.
The alliance will pursue development of green hydrogen across the UAE, while Adnoc will continue to produce blue hydrogen using its existing infrastructure, independently.
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
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
