Saudi Arabia will be one of the cheapest sources of clean hydrogen

 The US “S&P” agency said today, Wednesday, that the Kingdom of Saudi Arabia will be one of the cheapest sources of hydrogen in the world, amid its efforts to intensify its production of both green and blue types.

In a report, the agency estimated the price of hydrogen production in Saudi Arabia, through the methane recycling mechanism and carbon capture and storage (blue hydrogen), at $4.18 per kilogram, while the cost per kilogram of green hydrogen is estimated at $3.2.

The Kingdom seeks to be the main source of hydrogen in the world, as the fuel emits only water vapor upon combustion, which makes it less polluting than oil, natural gas and coal.

Saudi Aramco, the world's largest oil company, is also seeking to become a major exporter of blue hydrogen, which is seen as a critical component of the energy transition.

The platform quoted Aramco Vice President for Chemicals and Hydrogen, Oliver Thorrell, as saying that hydrogen production is "very expensive" and that there is a need to pass legislation that guides its use.

Thorell added that Aramco is focused on exporting hydrogen, targeting 11 million metric tons per year of low-carbon hydrogen by 2030.

The current markets for refining and fertilizer production will be the first target of Saudi hydrogen exports, according to Thorrell.

Aramco's chief technology officer, Ahmed Al-Khowaiter, recently said that the company has made progress in talks to supply blue hydrogen to Asia over the next five years.

He added, "We are in serious negotiations with a number of stakeholders. The discussions have come a long way with South Korea and Japan."

Aramco will focus primarily on blue hydrogen, though it will invest in a green variety of fuels through a $1.5 billion sustainability fund it announced last month.

In addition to Aramco, the Saudi company ACWA Power is also strong in the emerging hydrogen market, and it is leading a consortium to construct one of the largest projects in the world in Saudi Arabia's NEOM, and is heading for the financial closure of the project in the coming months.

Paddy Padmanathan, the company's chief executive, said they have already begun building a $5 billion plant in the northwest of the kingdom and it is very much on track to operate in 2026.

Green hydrogen is made when solar and wind energy is used to split water atoms, which contributes to zero carbon emissions.

The clean hydrogen market is expected to reach $700 billion annually by 2050 if manufacturers can cut costs, according to Bloomberg.