Abu Dhabi strengthens hydrogen leadership with accelerated development

Abu Dhabi is forging ahead with hydrogen development and is emerging as one of the world’s leading global hydrogen hubs, according to a new report from the Abu Dhabi Chamber of Commerce and Industry (ADCCI)

The report, entitled Abu Dhabi's Positioning in the Hydrogen Economy, highlights that Abu Dhabi is moving from ambition to concrete project execution through investment in production, infrastructure, manufacturing, logistics and export-oriented value chains, even as progress slows in other markets due to the reassessment of hydrogen ambitions and policy uncertainty.

Competitive advantage

The report finds that the UAE benefits from a unique combination of structural advantages, including:
• abundant solar resources
• efficient electricity infrastructure
• strong industrial capabilities
• low cost of capital, and
• strong project delivery capability.

These factors combine to make Abu Dhabi among the most competitive global hydrogen hubs globally, with the levelised costs of hydrogen and ammonia set to be one of the lowest in the world by 2030, strengthening its position as a key exporter to early demand centres such as the European Union, Japan and South Korea. 

Abu Dhabi has set a 2031 production target of 1.4 Mt/year of low-carbon hydrogen. This is in line with the UAE’s hydrogen strategy, which aims to enhance the UAE’s position as one of the largest producers of hydrogen by that year and envisages the low-carbon fuel as a crucial tool in meeting the country’s net-zero commitments and reducing emissions in hard-to-abate sectors.

Shift to high-value hydrogen derivatives

The report highlights a global strategic shift away from just exporting pure hydrogen toward higher-value derivatives such as green ammonia, methanol, synthetic fuels, and Sustainable Aviation Fuel (SAF).

Abu Dhabi is pursuing a number of initiatives in these areas such as
• Development of methanol and SAF projects using green hydrogen and captured CO₂
• Exploration of e-methane production and bunkering infrastructure
• Expansion into green ammonia and synthetic fuels.

These initiatives could result in exports worth millions of dirhams, as well as creating new jobs and contributing to emissions reduction, creating new opportunities across manufacturing, trade, logistics and industrial production.

Offtake agreements critical

The report stresses that long-term offtake agreements are critical to accelerate investment and scale the hydrogen economy. As a recent IEA report notes, demand uncertainty remains a key constraint for scaling up low-emissions hydrogen development, and is cited by developers as one of the largest barriers to investment. Despite strong global momentum, the report notes that only around 12% of low-carbon hydrogen projects have secured confirmed customers.

Addressing these considerations, Abu Dhabi is demonstrating a viable delivery model through customer-aligned projects and partnerships:
• The EMSTEEL–Masdar green steel pilot (MENA’s first hydrogen-based steel project) is already operational
• Offtake agreements have been signed with Modon and Aldar to supply green steel to sustainable construction projects.

Equipment and technology offer opportunities

As well as production and derivatives, the report identifies opportunities in exporting hydrogen-related technologies and equipment to global projects, such as electrolysers, port infrastructure components and blending projects. Abu Dhabi's industrial zones — including KEZAD— and logistics infrastructure at Khalifa Port position the emirate as a manufacturing and re-export hub to markets such as China, Germany, the United Kingdom, the USA, and Australia. In a regional first, ADNOC, John Cockerill Hydrogen, and Strata Manufacturing signed an agreement in 2023 to produce electrolysers in the UAE for domestic use and export. Other similar arrangements will surely follow.