LOWERING COSTS AND IMPROVING EFFICIENCY IN THE SAUDI HYDROGEN VALUE CHAIN: A CORE ENABLER OF SAUDI ARABIA'S HYDROGEN EXPORT AMBITIONS UNDER VISION 2030

Resumen

Saudi Arabia considers low-carbon and green hydrogen to be a central component of its Vision 2030 plan and its net-zero goal in the longer term. Saudi Arabia has huge advantages: plenty of sunshine and winds, already established energy infrastructure, and adequate financing. Saudi Arabia must, however, leverage its potential to be a powerhouse in hydrogen export by optimizing its hydrogen value chain, from renewable energy to feedstock gas, then to hydrogen production, conversion to blue carrier fuels such as ammonia, to hydrogen transportation, to final imports. This report examines the cost drivers and efficiency boundaries in the hydrogen value chain that are relevant for the export strategy in the case of Saudi. The report proposes an action plan on how the costs could be reduced and efficiency increased. The report first provides the context for hydrogen under Vision 2030 and the market perspective. Then the report dissects the levelized cost of hydrogen (LCOH) for green and blue hydrogen for Saudi beyond. The article further includes policy instruments that can promote scale-up and attract private sector investment, like offtake contract models with a long-term perspective, low carbon certification for hydrogen, strategic industrial clustering, and global collaboration with importing nations. It concludes with a plan for Saudi Arabia to develop and transport cost-competitive hydrogen on a large scale and emerge as a major hydrogen supplier in the international market and also achieve its domestic decarbonization targets during the period of 2030-2040.