Huge potential puts Oman on track to become sixth-largest hydrogen exporter by 2030

In a first-of-its-kind report, International Energy Agency (IEA) has presented how rich renewable resources and vast land expanses could make Oman a competitive low-emissions hydrogen supplier by 2030.

The report called Renewable Hydrogen from Oman: A Producer Economy in Transition is the first IEA report of its kind that analyses renewable hydrogen potential in a fossil fuel producer country.

It was released on 12 June and presented to Oman’s Minister of Energy and Minerals Salim Al Aufi during a roundtable meeting with senior IEA leaders and analysts at the Agency’s headquarters in Paris, building on the IEA’s ongoing technical cooperation with this Middle Eastern country to support its clean energy transition.

According to the report, Oman’s high-quality renewable energy resources and vast tracts of available land put the country on track to produce large quantities of low-emissions hydrogen – an industry that can attract investment to diversify and expand the country’s export revenues while reducing its natural gas consumption and emissions.

Oman aims to produce at least 1 million tons of renewable hydrogen a year by 2030, up to 3.75 million tonnes by 2040 – and up to 8.5 million tonnes by 2050, which would be greater than the total hydrogen demand in Europe today. IEA points out that the 2040 hydrogen target would represent 80% of Oman’s current LNG exports in energy-equivalent terms, while achieving the 2050 target would almost double them.

With abundant solar, wind and land resources, in combination with the existing fossil fuels structure that can be repurposed and extensive expertise in handling and exporting both LNG and ammonia that is directly applicable to renewable hydrogen and hydrogen-based fuels, Oman is on track to become the sixth-largest exporter of hydrogen globally, and the largest in the Middle East, by 2030, IEA analysis found.

“Oman is an oil and gas producer country that is taking an enlightened approach to its energy future, with a clear long-term vision and strong net zero ambitions,” said IEA Executive Director Fatih Birol. “Thanks to its huge potential for low-cost solar and wind, renewable hydrogen is set to bring multiple benefits to Oman. The IEA is very pleased to be working with Oman on policy and technical matters as the country moves ahead on its journey to a net zero economy and shows other producer countries what is possible.”

Oil and gas today represent around 60% of Oman’s export income, and domestic natural gas accounts for over 95% of the country’s electricity generation. However, in 2022, Oman announced a target to achieve net zero emissions by 2050 and began reducing fossil fuel use in its domestic energy mix. 

To achieve this target, the government established an independent entity, Hydrogen Oman (HYDROM), to lead and manage its hydrogen strategy. So far, 1,500 square kilometres of land has been put aside for development by 2030 – and up to 40 times more land has been identified for potential production in the long term. Six projects have already been allocated land for renewable hydrogen in the country’s first such auction process.

Furthermore, the report said that Oman’s renewable hydrogen exports are likely to be transported initially in the form of ammonia, adding that its ammonia export capacity would need to be 20 to 30 times higher by 2030 if it wants to become a significant international hydrogen supplier in that timeframe, requiring significant and timely investment, especially for storage tanks and dedicated deepwater jetties.

The analysis also showed that meeting hydrogen targets will require a massive increase in renewable power, with around 50 terawatt-hours of electricity needed to meet the 2030 target, greater than the current size of the country’s entire electricity system.

In terms of financing, scaling up the production of renewable hydrogen in Oman to 1 million tonnes by 2030 would require a cumulative investment of around $33 billion. An additional $4 billion would be required to bring renewables’ share of the national electricity mix to 20%, the report says.

Achieving its targets and using one-third of renewable hydrogen for domestic uses would significantly contribute to Oman’s clean energy transition. The benefits would include reducing domestic use of natural gas by 3 billion cubic metres a year and avoiding 7 million tonnes of carbon dioxide emissions. 

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• In with green hydrogen, out with black gold: Will this be a blueprint for the Middle East’s energy transition or is there something else in store?

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