Middle East & Africa Green Hydrogen Market By Technology (Alkaline Electrolyzer, Proton Exchange Membrane Electrolyzer, Solid Oxide Electrolyzer), By Renewable Source (Wind, Solar PV, Others), By End Use Industry (Power Generation, Automotive, Chemicals & Petrochemicals, Others), By Country, Competition, Forecast and Opportunities, 2029 2019-2029F

Middle East & Africa Green Hydrogen Market is expected to reach a significant value of USD 791.38 Million in 2023 and is anticipated to project robust CAGR growth of 8.21% in the forecast through 2029.

The Middle East and Africa (MEA) region, known for its vast energy resources, is now embracing the green hydrogen revolution. Green hydrogen, produced through the electrolysis of water using renewable energy sources, is heralded as a clean and sustainable alternative to conventional hydrogen production methods. As the world pivots towards decarbonization, the MEA region's potential to become a green hydrogen powerhouse cannot be underestimated.

The MEA green hydrogen market is gaining traction, with a growing number of key players contributing to its development. Notable players in the region include ACWA Power, Air Products and Chemicals, Inc., and ThyssenKrupp Industrial Solutions AG. These industry leaders are actively shaping the market by investing in green hydrogen projects and technologies.

Several factors drive the demand for green hydrogen in the MEA region. The abundance of renewable energy resources, such as solar and wind, creates a favorable environment for green hydrogen production. Moreover, the growing emphasis on sustainability and environmental commitments by governments and corporations has accelerated the development of green hydrogen projects.

Saudi Arabia and the UAE spearhead green hydrogen projects, valued at $10.5 billion and $10.28 billion, respectively. Meanwhile, Egypt, leveraging abundant wind and solar resources and a substantial port upgrade initiative, leads with a significant investment of $63.8 billion. Oman closely follows with projects totaling $48.9 billion. Egypt's strategic positioning and robust investments position it as a key contender in both regional competition for green hydrogen supplier dominance and global market development. As other regional players join the race, the competition intensifies to determine the key players in the upcoming phase of green hydrogen market development.

The future outlook for the Middle East & Africa green hydrogen market is promising. With abundant renewable energy resources and growing Middle East & Africa demand for clean hydrogen, the region is well-positioned to become a major contributor to the green hydrogen landscape. The industry's adaptability to changing market dynamics, investment in infrastructure, and alignment with Middle East & Africa sustainability goals will be crucial in shaping its growth trajectory.

Key Market Drivers

Abundant Renewable Energy Resources is Driving the demand for Middle East & Africa Green Hydrogen Market

The Middle East and Africa (MEA) region is experiencing a growing demand for green hydrogen, driven by the abundant renewable energy resources found at in this part of the world. Green hydrogen, produced through the electrolysis of water using renewable energy sources, is gaining prominence as a clean and sustainable energy carrier. The MEA region, known for its vast renewable energy potential, is positioned to play a pivotal role in the global green hydrogen market.

Saudi Arabia consistently achieves the lowest production costs for hydrogen, ranging from USD 2 to USD 7 per kg globally. The King Abdullah Petroleum Studies and Research Center (KAPSARC) forecasts that in the long term, Saudi Arabia could reliably achieve rates as low as USD 1 per kg, positioning them as the world's most cost-effective producer of green hydrogen. USD 7 per kg globally. The King Abdullah Petroleum Studies and Research Center (KAPSARC) forecasts that in the long term, Saudi Arabia could reliably achieve rates as low as USD 1 per kg, positioning them as the world's most cost-effective producer of green hydrogen

Moreover, the MEA region experiences consistent and strong wind patterns in many areas, making it a potential hub for wind energy generation. Wind farms in the region have the capacity to generate substantial amounts of clean electricity, which can be used to power the electrolysis process required for green hydrogen production. These abundant renewable energy resources are a key enabler of green hydrogen production and have the potential to position the MEA region as a major global player in the emerging green hydrogen market.

Governments across the MEA region is recognizing the strategic importance of green hydrogen and are taking proactive steps to foster its growth. Many countries in the region have set ambitious renewable energy targets and are investing in infrastructure and technology to support green hydrogen production. These initiatives are in line with global efforts to reduce carbon emissions, mitigate the impact of climate change, and ensure energy security for the future. As the MEA region aligns with international climate agreements and sustainability goals, green hydrogen is poised to become a significant component of its energy landscape.

Furthermore, the MEA region's potential as a global energy provider is driving the adoption of green hydrogen. As a region with extensive experience in the energy sector, it has the opportunity to diversify its energy offerings by exporting green hydrogen to international markets. This not only contributes to the region's energy security but also positions it as a key player in the global renewable energy transition. The MEA region can leverage its expertise in energy production and distribution to establish itself as a leading green hydrogen supplier to meet the global demand for clean energy.

The MEA region's abundant renewable energy resources, government commitments to sustainability, the decarbonization of energy-intensive industries, and its potential as a global green hydrogen supplier are collectively driving the demand for green hydrogen in the region. The availability of solar and wind energy resources, combined with the region's commitment to clean and sustainable energy solutions, positions the MEA as a crucial player in the global green hydrogen market. As the region harnesses its renewable energy potential and transitions towards a greener energy landscape, green hydrogen is expected to play a significant role in achieving a sustainable and eco-friendly energy future.

Growing Focus on Sustainability is Expected to Propel the Middle East & Africa Green Hydrogen Market

The Middle East and Africa (MEA) are poised to play a pivotal role in the global transition to a more sustainable and renewable energy future, and the region's green hydrogen market is set to benefit significantly from this transformation. Green hydrogen, produced through the electrolysis of water using renewable energy sources, has emerged as a key solution for reducing carbon emissions and fostering a sustainable energy ecosystem. The MEA region, known for its abundant solar and wind resources, is well-positioned to capitalize on the growing global focus on sustainability and the transition to clean energy.

One of the primary drivers behind the expected growth of the MEA green hydrogen market is the region's immense potential for renewable energy generation. The Middle East, in particular, boasts vast solar and wind resources that can be harnessed for the production of green hydrogen. Solar energy, in the form of photovoltaic (PV) panels and concentrated solar power (CSP), is abundant throughout the region, with the potential to generate significant amounts of clean electricity for electrolysis. Additionally, the region's strong and consistent wind patterns make it conducive for wind energy generation, further contributing to green hydrogen production.

There are 46 viable green hydrogen projects in the MEA region, collectively valued at $92 billion. According to MEED, the total investment for the over 50 projects in the region amounts to more than $150 billion.

The industrial sector in the MEA region presents a significant opportunity for green hydrogen adoption. Industries, such as petrochemicals, steel, and cement, are energy-intensive and have traditionally relied on fossil fuels for their energy needs. By transitioning to green hydrogen, these industries can reduce their carbon emissions and environmental impact while ensuring a stable and sustainable energy supply. The use of green hydrogen in these sectors can lead to the decarbonization of industrial processes and contribute to a greener and more sustainable economy.

Another driving force behind the MEA green hydrogen market is the region's role in global energy security. As an essential player in the global energy landscape, the Middle East has an opportunity to diversify its energy offerings and export green hydrogen to international markets. Green hydrogen production can complement traditional hydrocarbon exports, offering a cleaner and more sustainable energy source to the world. This diversification not only secures the region's energy future but also positions it as a key player in the global renewable energy transition.

Investments in research and development are also expected to drive the growth of the MEA green hydrogen market. As governments and private entities in the region allocate resources to advance technology and improve the efficiency of green hydrogen production, the cost of production is likely to decrease, making green hydrogen more economically viable. Research institutions and universities in the MEA region are actively involved in exploring innovative solutions and technologies for green hydrogen production, driving progress in the field.

In conclusion, the growing focus on sustainability, the vast potential of renewable energy resources, government commitments to clean energy, the decarbonization of industries, and the role in global energy security are collectively expected to propel the Middle East and Africa green hydrogen market. As the region harnesses its renewable energy potential and transitions towards sustainable energy solutions, it is likely to become a significant contributor to the global green hydrogen landscape. The MEA region has the opportunity to lead the way in the adoption of green hydrogen and contribute to a more sustainable and eco-friendly energy future.

Accelerated adoption of renewable energy is Expected to Propel the Middle East & Africa Green Hydrogen Market Growth

The Middle East and Africa (MEA) region is on the cusp of a green energy revolution, driven by the accelerated adoption of renewable energy sources, and this shift is expected to propel the growth of the MEA green hydrogen market. Green hydrogen, produced through the electrolysis of water using renewable energy, is gaining traction as a clean and sustainable energy carrier. The MEA region, renowned for its abundant renewable energy potential, is poised to play a significant role in the global green hydrogen market, thanks to the rapid integration of renewable energy sources.

One of the primary factors contributing to the surge in demand for green hydrogen in the MEA region is the widespread adoption of renewable energy technologies. Solar and wind energy, in particular, have seen remarkable growth in the region. Solar photovoltaic (PV) panels and concentrated solar power (CSP) are extensively deployed in the Middle East due to the region's high solar irradiation levels. CSP, in particular, has the potential to generate substantial amounts of electricity for electrolysis, which is central to green hydrogen production. Wind energy is also gaining prominence, with wind farms becoming increasingly common in the region.

The industrial sector in the MEA region presents a significant opportunity for the adoption of green hydrogen. Energy-intensive industries, including petrochemicals, steel, and cement production, are vital to the region's economy. Historically reliant on fossil fuels, these industries are now looking to transition to green hydrogen to reduce their carbon footprint. By doing so, they can align with sustainability goals, meet environmental regulations, and contribute to a cleaner and more sustainable energy ecosystem.

The accelerated adoption of renewable energy in the MEA region is also catalyzing the development of green hydrogen technology. Investments in research and development are increasing, leading to innovations in electrolysis processes, materials, and integrated renewable energy systems. Research institutions and universities in the region are actively involved in exploring advanced solutions to enhance the efficiency and cost-effectiveness of green hydrogen production.

Therefore, the rapid adoption of renewable energy sources is expected to drive the growth of the Middle East and Africa green hydrogen market. The abundant availability of solar and wind energy resources, combined with government commitments to sustainability, the decarbonization of energy-intensive industries, and the region's potential as a global green hydrogen supplier, positions the MEA region as a key player in the global transition to clean and sustainable energy. As the region harnesses its renewable energy potential and advances green hydrogen technology, it is likely to play a pivotal role in the realization of a sustainable and eco-friendly energy future.

Key Market Challenges

Lack of infrastructure Poses a Significant Obstacle to Market Expansion

The lack of infrastructure poses a significant obstacle to the expansion of the Middle East and Africa (MEA) Green Hydrogen market. Green hydrogen, produced through the electrolysis of water using renewable energy sources like solar and wind, is gaining prominence as a clean and sustainable fuel. However, the development of a comprehensive infrastructure for green hydrogen production, distribution, and utilization remains a considerable challenge in the MEA region.

To overcome this challenge and stimulate the expansion of the MEA Green Hydrogen market, governments, private sectors, and international organizations should collaborate to invest in the necessary infrastructure and create an enabling environment. Building a robust infrastructure network is crucial for the widespread adoption of green hydrogen and achieving the region's sustainability goals, including reducing carbon emissions and fostering clean energy solutions.

High Upfront Costs

High upfront costs are a substantial impediment to the growth of the Middle East and Africa (MEA) Green Hydrogen market. Green hydrogen, produced through renewable energy-powered electrolysis, is seen as a promising solution for clean energy and decarbonization. However, the initial investment required for setting up green hydrogen production facilities, including renewable energy infrastructure, electrolysis equipment, and related infrastructure, can be significant.

To address this challenge, governments, industry players, and financial institutions need to work together to provide incentives, subsidies, and financial mechanisms that make green hydrogen projects more economically viable. This could include grants, tax incentives, and innovative financing models that lower the barrier to entry and promote the development of green hydrogen infrastructure in the MEA region. Such measures are crucial for unlocking the potential of green hydrogen and accelerating the transition to a more sustainable energy future.

Key Market Trends

Government Initiatives and Incentives

Government initiatives and incentives are playing a pivotal role in driving the growth of the Middle East and Africa (MEA) Green Hydrogen market. This trend underscores the region's commitment to sustainability and clean energy, and it's setting the stage for a substantial transformation in the energy landscape.

Governments in the MEA region is actively introducing policies and initiatives to encourage the production and utilization of green hydrogen, a clean fuel produced using renewable energy sources like wind and solar power. These initiatives include financial incentives, subsidies, and regulatory support aimed at accelerating the development of green hydrogen projects. By providing financial backing and creating a favorable regulatory environment, governments are incentivizing private sector investments in green hydrogen infrastructure and technology.

In 2022, Egypt unveiled its National Hydrogen Strategy, outlining the nation's long-term goals regarding forthcoming hydrogen legislation and policies.

Overall, government initiatives and incentives are crucial in fostering the growth of the MEA Green Hydrogen market. They are not only attracting investments but also positioning the region as a key player in the global transition to clean and sustainable energy sources. As these initiatives continue to evolve and gain momentum, they are set to unlock significant economic and environmental benefits, shaping the future of the MEA's energy landscape.

Growing Demand for Sustainable Hydrogen Applications

The Middle East and Africa (MEA) Green Hydrogen market is experiencing remarkable growth, with the increasing demand for sustainable hydrogen applications emerging as a pivotal trend. This trend underscores the region's commitment to clean energy and its recognition of green hydrogen as a crucial solution to address environmental challenges and meet energy needs sustainably.

Green hydrogen, produced through the electrolysis of water using renewable energy sources, is considered a sustainable and environmentally responsible alternative to traditional hydrogen production methods, which rely on fossil fuels. The MEA region, endowed with abundant renewable energy resources like sunlight and wind, is uniquely positioned to harness green hydrogen's potential. With its growing emphasis on sustainability, countries in the MEA region are increasingly adopting green hydrogen in various applications.

Moreover, industries in the MEA region, including chemicals, steel production, and refineries, are recognizing the value of green hydrogen as a clean feedstock and energy source. Green hydrogen can be used to replace fossil fuels in various industrial processes, reducing the carbon footprint of these operations.

Segmental Insights

Production Method Insights

Based on the production method, the alkaline electrolyzer segment emerged as the dominant player in the Middle East & Africa market for Green Hydrogen in 2023. This can be attributed to its cost-effectiveness, reliability, integration with renewable energy, support for large-scale projects, and alignment with the region's hydrogen export ambitions. These factors collectively position alkaline electrolysis as the dominant player in the green hydrogen market in the Middle East & Africa.

Alkaline electrolyzers are known for their cost-effectiveness, making them an attractive option for green hydrogen production in the MEA region. This cost advantage is especially important in regions where economic efficiency is a priority. Alkaline electrolysis is a well-established and mature technology with a history of reliable operation. This maturity instills confidence in investors and project developers, driving its adoption in the MEA region.

The MEA region is home to several large-scale green hydrogen projects, many of which rely on alkaline electrolysis. These projects are often designed to produce significant amounts of green hydrogen for various applications, such as transportation and industrial use. Alkaline electrolyzers can effectively integrate with renewable energy sources like solar and wind power. The MEA region has abundant solar resources, and the coupling of solar energy with alkaline electrolyzers aligns with the region's emphasis on renewable energy solutions.

End User Industry Insights

Based on the end user industry, the power generation segment is projected to experience rapid growth during the forecast period driven by the region's abundant renewable energy resources, the role of hydrogen in energy storage and grid balancing, decarbonization objectives, and the potential for green hydrogen to enhance grid stability and support peak power generation. These factors collectively establish the power generation sector as the dominant player in the green hydrogen market in the Middle East & Africa.

The MEA region is blessed with abundant renewable energy resources, particularly solar and wind power. Green hydrogen production relies on renewable electricity, making it a strategic choice for the power generation sector in the region.

Many countries in the MEA region have set ambitious decarbonization and renewable energy targets. Green hydrogen, as a clean energy carrier, aligns with these goals and serves as a key element in achieving carbon reduction and transitioning to a low-carbon power generation sector.

Regional Insights

Based on the region, the Saudi Arabia emerged as the dominant player in the Middle East & Africa Green Hydrogen market in 2023, is driven by its abundant renewable resources, strategic location, government initiatives, investment in infrastructure and research, and a clear vision for a hydrogen-based economy. These factors collectively establish Saudi Arabia as a dominant player in the green hydrogen market in the MEA region and beyond.

Saudi Arabia has vast renewable energy potential, particularly in terms of solar and wind resources. The availability of these resources is crucial to produce green hydrogen through electrolysis, making the country a natural leader in the green hydrogen market. Saudi Arabia's geographic location offers a strategic advantage for green hydrogen production and export. The country's proximity to key global markets, as well as its well-established energy infrastructure, positions it as a dominant player in the export of green hydrogen.

Recent Developments

• In September 2023, NEOM Green Hydrogen Company, a subsidiary of NEOM, a megacity project in Saudi Arabia, signed a Memorandum of Understanding (MoU) with Air Products and Chemicals, a global leader in industrial gases and hydrogen production. The MoU aims to explore opportunities for collaboration on the development of green hydrogen production facilities in NEOM, with a potential capacity of up to 1 million tonnes per annum.
• In August 2023, OQ, ACWA Power, and Air Products and Chemicals announced the formation of a joint venture to develop a green hydrogen production facility in Oman. The project, which is expected to have a production capacity of 300,000 tonnes per annum, is expected to be operational by 2029.
• In July 2023, ADNOC, Abu Dhabi National Oil Company, signed an agreement with Siemens Energy to explore opportunities for collaboration on the development of green hydrogen production facilities in Abu Dhabi. The two companies will also collaborate on the development of hydrogen infrastructure, such as storage and transportation facilities.
• In June 2023, Hyphen Hydrogen, a South African-based company, announced that it had secured funding for its green hydrogen project in Namibia. The project, which is expected to have a production capacity of 120,000 tonnes per annum, is expected to be operational by 2026.
• In May 2023, Swell Energy, a South African-based company, announced that it had signed an MoU with the Port of Saldanha for its green hydrogen project. The project, which is expected to have a production capacity of 1 million tonnes per annum, is expected to be operational by 2030.

Key Market Players

• Abu Dhabi National Oil Company (ADNOC)
• OQ, ACWA Power, and Air Products and Chemicals (Oman)
• ENGIE Group
• Hyphen Hydrogen Energy (Pty) Ltd (“Hyphen”)
• CWP Renewables Pty Ltd
• NEOM Green Hydrogen Co