The UAE-UK cross–border investment opportunities in hydrogen will support decarbonisation and create thousands of jobs in both countries, a new report has found.
By 2050, hydrogen is estimated to deliver up to Dh32 billion ($8.7bn) annually to Dubai’s economy and £13bn gross value added to the UK, said the report by the Dubai-based World Green Economy Organisation, HSBC and sustainability consultancy Zest Associates.
The development of the hydrogen industry will also create more than 100,000 new jobs in each country under high-adoption scenarios.
“The UAE and UK enjoy a strong bilateral relationship and are already working together to advance the clean hydrogen industry,” the report said. “Deeper and broader collaboration across policy, innovation, investment and business could unlock mutual benefits for climate and economic development.”
Last year, British energy company BP, clean energy company Masdar and the Abu Dhabi National Oil Company (Adnoc) said they would work together to develop low-carbon hydrogen hubs and decarbonised air-travel corridors between the UK and UAE.
The three companies will initially focus on producing two gigawatts of low carbon hydrogen in the UK and UAE and expand the partnership further as the project progresses, they said.
Hydrogen produced from both renewable energy and natural gas is expected to become a critical fuel as economies and industries transition to a low-carbon world to mitigate climate change and global warming.
Globally, the hydrogen industry is expected to be worth $183bn by 2023, up from $129bn in 2017, according to Fitch Solutions. French investment bank Natixis estimates that investment in hydrogen will exceed $300bn by 2030.
The report talks about mobilising investment in both countries to support hydrogen projects as the demand for clean fuel rises globally.
“With forecast investment in hydrogen at just 40 per cent of global need, the UAE and UK need to improve the bankability of hydrogen projects to mobilise investment," it said. "UAE entities like Masdar or the Emirates Development Bank and the UK’s Infrastructure Bank could act as green investment banks to reduce risks, build technical capability and crowd in private sector finance for this relatively new market."
There is an opportunity to “enhance UAE-UK cross-border investment into new and refurbished pipelines, storage facilities, electricity transmission and port infrastructure”.
The UAE and the UK may also consider building a “strategic hydrogen reserve, stocked at market prices and backed by the government”, the report said.
The UAE is drawing up a comprehensive road map to position itself as an exporter of hydrogen and tap into the clean fuel's potential. Last year, Adnoc, Mubadala and industrial holding company ADQ signed a preliminary agreement to form a hydrogen alliance focusing on low-carbon green and blue hydrogen as part of the UAE’s energy diversification efforts.
Dubai also inaugurated its first green hydrogen plant at the Mohammed bin Rashid Al Maktoum Solar Park, the UAE's biggest solar facility.
Opec’s third-biggest producer aims to capture about 25 per cent of the global hydrogen market and is in discussions with many countries to export it, Suhail Al Mazrouei, Minister of Energy and Infrastructure, said this year.
“The UAE and the UK are already strong bilateral partners in the hydrogen sector and are collaborating across investment innovation and trade," Jeffrey Beyer, managing director of Zest Associates and author of the report, told The National on the sidelines of the World Green Economy Summit in Dubai on Thursday. "The report demonstrates that there is even further to go.
“New investment partnerships can be forged, new innovation exchanges can happen and infrastructure can be built in both countries through bilateral investments.”
The UAE and UK aim to become carbon neutral by 2050 and are boosting investment in the clean energy sector.