Saudi Arabia to introduce hydrogen for transportation

Neom Green Hydrogen Co., part of a $500 billion industrial and tourist development on Saudi Arabia’s Red Sea coast, will begin producing the fuel for transportation next year.

By mid-2024, the company will be making hydrogen for vehicles such as buses and trucks. A larger plant, focusing on exports, is also being developed.

Neom Green Hydrogen — a venture between local firm ACWA Power, state-backed Neom and US-based Air Products & Chemicals Inc. — is part of Riyadh’s ambitious plans to expand in clean-tech industries as it prepares for a future beyond fossil fuels. Green hydrogen is still far more expensive than oil and natural gas, but developers are confident they can reduce costs enough to make it competitive.

The bigger plant, a $8.4 billion project designed to produce 600 tons of hydrogen a day using wind and solar power, will start exporting fuel in the form of ammonia in 2026. The joint venture has a 30-year agreement to sell all of the ammonia to Air Products, a deal that helped underpin the financing of the project, Edmondson said.

Air Products will likely ship much of that fuel to Europe, where Edmondson says he sees buyers willing to pay a premium for cleaner products.

A third hydrogen facility, potentially up and running in 2028 or 2029, would likely be aimed at supplying energy to local industry, according to Edmondson.