The UAE could consider becoming a manufacturing base for hydrogen equipment, as it looks to add the alternative fuel to its future energy mix, according to a senior adviser to the energy and infrastructure ministry.
"Being one of the first in this region to start preparing for hydrogen, we think there's an opportunity for us to be also a manufacturer of some of the equipment for hydrogen production," Yousif Al Ali told the World Hydrogen Mena conference, which took place online on Wednesday.
The UAE, an Opec oil producer, has been been looking to diversify its energy mix away from hydrocarbons. The country generates much of its power from natural gas and plans to add 50 per cent renewables capacity by 2050.
The amount of power generated by renewable energy in the UAE will increase to 21 per cent in 2030 and to 44 per cent by 2050, from 7 per cent last year, as more new projects come online, according to Rystad Energy.
The UAE is in the process of updating its 2050 strategy with a greater potential role for hydrogen, Mr Al Ali said.
"In 2017, we issued our 2050 energy strategy and it is due to be reviewed by 2022. Hydrogen is going to be a very important part of that revised strategy," he said.
Globally, the hydrogen industry is expected to grow to $183 billion by 2023, from $129bn in 2017, according to Fitch Solutions. French investment bank Natixis estimates that investments in hydrogen will exceed $300bn by 2030.
The UAE is drawing up a comprehensive roadmap on how best to position itself as an exporter of hydrogen, Mr Al Ali said.
Earlier this year, state entities Abu Dhabi National Oil Company, Mubadala Investment Company and holding company ADQ, formed a hydrogen alliance to ramp up production capabilities.
"There will be a lot of focus on the blue hydrogen production, being a hydrocarbon producer and having the natural sources," Mr Al Ali said.
Blue hydrogen refers to the clean fuel manufactured through steam methane reforming.
Adnoc, which already produces 300,000 tonnes of hydrogen annually for its downstream operations, plans to increase its output significantly.
The company plans to expand its manufacturing capacity for the clean gas to more than 500,000 tonnes.
The UAE is also looking at developing capabilities for green hydrogen, which refers to the gas produced through electrolysis powered by renewable sources.
The country plans to tap nuclear energy as a baseload to power hydrogen production in the future.
Nuclear energy provides a stable baseload capacity, unlike variable sources such as wind and solar.
"You can allocate nuclear production for industries including hydrogen in order to allow other sources of electricity to cater to the variability of demand here in the UAE," Mr Al Ali said.
Last month, the UAE Cabinet approved a nationwide system for hydrogen vehicles as the country ramps up production of blue and green variants of the fuel.