Middle East Blue Hydrogen Market: Current Analysis and Forecast (2023-2030)

Blue hydrogen is a type of hydrogen produced from natural gas through a process called steam methane reforming (SMR) or autothermal reforming (ATR). The term "blue" refers to the fact that hydrogen is produced with carbon capture and storage (CCS) technology to reduce carbon dioxide (CO2) emissions significantly. Blue hydrogen has garnered attention as a potential way to decarbonize various sectors, especially industries that heavily rely on hydrogen as a feedstock or energy source, such as chemical production, refining, and steel manufacturing.

The Middle East Blue Hydrogen Market is expected to grow at a steady rate of around 8.6% owing to the growing interest in developing a hydrogen economy coupled with the rising industrial demands of hydrogen for their processes. Also, the rising demand for hydrogen, ammonia, and methanol in the chemical subsector is fueling the blue hydrogen market. The Middle East area holds extensive natural gas deposits, which encompass the largest gas field globally, known as the South Pars/North Dome Field. Saudi Arabia and Qatar are positioned within the top six nations worldwide when it comes to confirmed gas reserves. At present, the Middle East possesses about 10% of the worldwide capacity for Carbon Capture, Utilization, and Storage (CCUS).

Based on the technology, the market is segmented into steam methane reforming, autothermal reforming, and partial oxidation. Among these, the steam methane reforming segment is leading the market due to the rising demand of cost- effective method to produce hydrogen on a large scale. This method involves using natural gas (methane) and steam in a process that extracts hydrogen. As natural gas is abundant and relatively affordable, it makes blue hydrogen production economically attractive and hence accelerating the market.

Based on the industry, the market is segmented into ammonia production, methanol production, petroleum refining, other. As countries strive to adopt cleaner energy sources, there is an increasing need for sustainable fuels and chemicals. Ammonia serves as a valuable carrier of hydrogen, making it an essential component of the blue hydrogen market's growth, offering a practical solution to both energy storage and transportation challenges while supporting a transition to a greener future and therefore holds the considerable share of the blue hydrogen market. Moreover, investments by the major players of the region are fueling the market. For instance, in August 2023, The Qatar Investment Authority (QIA) has acquired a 2.7% stake in Adani Green Energy. It purchased 42,604,601 shares at a price of INR 920 ($11.10) per share.

Based on the end-users, the market is segmented into chemical, refinery, power generation, others. Among these the refinery segment is leading the market owing to the growing demand of sustainable production methods. Blue hydrogen, produced through steam methane reforming with carbon capture, offers a more sustainable alternative to traditional hydrogen production methods, which often result in higher carbon emissions. Also, as the world focuses on reducing greenhouse gas emissions and transitioning to greener practices, the adoption of blue hydrogen in refineries becomes an essential step towards achieving a more sustainable and low-carbon future and hence this segment is fueling the blue hydrogen market. For instance, In May 2023, Saudi Arabian Oil Company confirmed that its goal of producing up to 11 million tons of blue ammonia, a carrier of blue hydrogen, by 2030.

For a better understanding of the market adoption of the blue hydrogen industry, the market is analyzed based on its presence in the countries such as the Middle East (UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, Rest of the Middle East). The blue hydrogen market in the Middle East region is currently emerging and gaining attention. Countries in the Middle East are exploring the potential of blue hydrogen as a cleaner alternative to traditional fossil fuels. The region's abundant natural gas resources make it well-suited for blue hydrogen production, which involves capturing carbon emissions during the hydrogen production process. Several Middle Eastern countries, including Saudi Arabia, the United Arab Emirates, Qatar and Oman, have started to invest in blue hydrogen projects and partnerships. These initiatives aim to leverage existing natural gas infrastructure to produce hydrogen with reduced carbon emissions. The Middle East's strategic geographic location and established energy industry could position it as a significant player in the global blue hydrogen market. For instance, in August 2022, Qatar made public its intentions to construct the biggest plant for producing blue ammonia globally. Blue ammonia is a substance formed by combining nitrogen and blue hydrogen using a process that stores away any extra carbon dioxide. Just like blue hydrogen, this blue ammonia can serve as a cleaner fuel option. What's interesting is that it's also well-suited for transportation, especially in shipping, and can be used to make fertilizers.

Some of the major players operating in the market include: Bankset Energy, GREENRAIL, Jakson Group, LG Electronics, Central Electronics Limited, WorldSolar, Trina Solar, KYOCERA Corporation, Canadian Solar, AXITEC, LLC.