Hydrogen availability to spur growth of energy-intensive industries in Oman
Published: 03:06 PM,Jun 15,2023 | EDITED : 07:06 PM,Jun 15,2023
MUSCAT: With prodigious quantities of renewable hydrogen anticipated to come on stream starting from 2030, the Sultanate of Oman is well-placed to attract investments in large-scale, energy-intensive industries, according to a key report.
The International Energy Agency (IEA) noted in its recent report, underscoring the global-scale hydrogen production potential of Oman, that investments in low-emission steel, cement, aluminium and polysilicon industries would be well-suited to countries offering an abundance of cost-competitive hydrogen amid the current decarbonization drive.
“In addition to existing industrial needs, a large scale up of renewables supply can position Oman as an attractive location for new energy-intensive industries seeking to decarbonise at a low cost,” the Paris-headquartered intergovernmental agency said in its ground-breaking report on Oman released last week.
“Demand for low-emission goods is expected to increase as governments and companies aim to meet their climate goals. Some governments are already considering various policy tools to incentivise cleaner manufacturing such as carbon taxes or carbon border adjustment mechanisms,” it further stated.
Massive land blocks awarded recently by Hydrogen Oman (Hydrom), the master-planner and orchestrator of the country’s future green hydrogen industry, target the production of around 1 million tonnes per annum of renewable hydrogen starting from around 2030. A sizable chunk of this output is earmarked for domestic consumption as part of Oman’s ambitious decarbonisation drive.
Recognising the benefits of operating in a low-emission energy-rich environment, a handful of investors have already announced plans to set up projects at the Special Economic Zone (SEZ) in Duqm in southeast Oman, according to the IEA report.
The list includes Omani steelmaker Jindal Shadeed which plans to invest around $3 billion in a green steel manufacturing complex at Duqm with a capacity to produce around 5 million tonnes (Mt) of low-emission steel per annum.
Other likely candidates for renewable hydrogen uptake are existing industries currently consuming vast quantities of hydrogen produced from natural gas (also known as grey hydrogen), the report points out. Around 1.1 Mt of grey hydrogen was produced in 2021, of which 0.46 Mt was used in oil refining (0.35 Mt) for hydro-treatment and hydrocracking and steelmaking (0.1 Mt) for direct reduction iron – volumes that will be supplanted by low-emission renewable hydrogen when it becomes available from the end of this decade.
In particular, the use of renewable hydrogen in Oman’s refining and petrochemicals sectors will be significant from the decarbonization standpoint, says IEA.
“In 2021, industry was responsible for 32% of Oman’s total emissions and was the largest emitter of energy-related CO₂ emissions in the country. Industrial emissions are projected to grow by 27% to 36 Mt by 2050 under a business-as-usual scenario driven largely by petroleum refining, petrochemicals, cement, aluminium, iron and steel. Oman’s national carbon neutrality strategy identifies replacement of natural gas with green hydrogen as the second-largest emissions reduction opportunity for the industry sector (6.8 Mt CO₂ by 2050), behind electrification of industrial processes,” the report stated.
Importantly, the looming switch to renewable hydrogen will also free up massive quantities of natural gas currently used by the industrial sector for heating purposes. In 2021 alone, around 5 billion cubic metres (bcm) – equivalent to 60 terawatt-hours (TWh) of electricity – of natural gas was used by industries, notably for generating high-temperature heat required in cement, chemical, petrochemical, refining and aluminium smelting – also volumes that be replaced by renewable hydrogen going forward, it added.
The International Energy Agency (IEA) noted in its recent report, underscoring the global-scale hydrogen production potential of Oman, that investments in low-emission steel, cement, aluminium and polysilicon industries would be well-suited to countries offering an abundance of cost-competitive hydrogen amid the current decarbonization drive.
“In addition to existing industrial needs, a large scale up of renewables supply can position Oman as an attractive location for new energy-intensive industries seeking to decarbonise at a low cost,” the Paris-headquartered intergovernmental agency said in its ground-breaking report on Oman released last week.
“Demand for low-emission goods is expected to increase as governments and companies aim to meet their climate goals. Some governments are already considering various policy tools to incentivise cleaner manufacturing such as carbon taxes or carbon border adjustment mechanisms,” it further stated.
Massive land blocks awarded recently by Hydrogen Oman (Hydrom), the master-planner and orchestrator of the country’s future green hydrogen industry, target the production of around 1 million tonnes per annum of renewable hydrogen starting from around 2030. A sizable chunk of this output is earmarked for domestic consumption as part of Oman’s ambitious decarbonisation drive.
Recognising the benefits of operating in a low-emission energy-rich environment, a handful of investors have already announced plans to set up projects at the Special Economic Zone (SEZ) in Duqm in southeast Oman, according to the IEA report.
The list includes Omani steelmaker Jindal Shadeed which plans to invest around $3 billion in a green steel manufacturing complex at Duqm with a capacity to produce around 5 million tonnes (Mt) of low-emission steel per annum.
Other likely candidates for renewable hydrogen uptake are existing industries currently consuming vast quantities of hydrogen produced from natural gas (also known as grey hydrogen), the report points out. Around 1.1 Mt of grey hydrogen was produced in 2021, of which 0.46 Mt was used in oil refining (0.35 Mt) for hydro-treatment and hydrocracking and steelmaking (0.1 Mt) for direct reduction iron – volumes that will be supplanted by low-emission renewable hydrogen when it becomes available from the end of this decade.
In particular, the use of renewable hydrogen in Oman’s refining and petrochemicals sectors will be significant from the decarbonization standpoint, says IEA.
“In 2021, industry was responsible for 32% of Oman’s total emissions and was the largest emitter of energy-related CO₂ emissions in the country. Industrial emissions are projected to grow by 27% to 36 Mt by 2050 under a business-as-usual scenario driven largely by petroleum refining, petrochemicals, cement, aluminium, iron and steel. Oman’s national carbon neutrality strategy identifies replacement of natural gas with green hydrogen as the second-largest emissions reduction opportunity for the industry sector (6.8 Mt CO₂ by 2050), behind electrification of industrial processes,” the report stated.
Importantly, the looming switch to renewable hydrogen will also free up massive quantities of natural gas currently used by the industrial sector for heating purposes. In 2021 alone, around 5 billion cubic metres (bcm) – equivalent to 60 terawatt-hours (TWh) of electricity – of natural gas was used by industries, notably for generating high-temperature heat required in cement, chemical, petrochemical, refining and aluminium smelting – also volumes that be replaced by renewable hydrogen going forward, it added.