Oman’s hydrogen economy for 380,000 jobs by 2050
Published: 02:12 PM,Dec 04,2023 | EDITED : 06:12 PM,Dec 04,2023
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MUSCAT : The Sultanate of Oman’s long-term strategy to develop a hydrogen-centric economy has the potential to create anywhere between 291,000 and 381,000 employment opportunities by 2050, according to a new report published this week.
Titled, ‘Hydrogen Fuelled Economies: Opportunities for economic value creation from green hydrogen in Oman,’ the report by business management consulting firm Guidehouse Germany delves into the job generation potential of this nascent sector, as well as its contribution to the country’s future GDP growth.
It was compiled for the German Federal Ministry for Economic Affairs and Climate Action (BMWK) and Ministry of Energy and Minerals (MoEM) of the Sultanate of Oman.
A central finding of the report is the future green-hydrogen economy’s sizable job creation potential. “Based on the 2050 production targets, the hydrogen economy is expected to create 291,000 to 381,800 employment opportunities, 46-50 per cent of which are connected to the deployment of renewable electricity, depending on the share of equipment and machinery that is imported to Oman (rather than produced locally),” it said.
Hydrogen production is targeted to reach around 8 million tonnes per annum by 2050, which part of this volume expected to be utilised locally as a zero-carbon energy resource for hard-to-abate industries, including steel, aluminium and cement. Oman expects a number of international manufacturers to set up their operations at Duqm SEZ, where much of this hydrogen capacity is anticipated to materialise over the coming decades.
Significantly, around a quarter of the total employment is direct employment while the rest is created indirectly, according to Guidehouse. The employment potential from renewable energy scale-up is the largest driver representing around half the overall potential employment the report noted.
Beneficial impacts to the country’s Gross Domestic Product (GDP) are also expected to be significant, according to the report. Future sales of green hydrogen and related products are also estimated to contribute in the order of 31–51 per cent of current GDP levels, with new revenue sources effectively offsetting expected declines in oil and gas revenues. The report stresses the need for Oman to tap the experience and technological capabilities of leading economies, notably Germany, in harnessing the full potential of its new green hydrogen economy. Also imperative, it notes, is a supportive regulatory and policy environment that is essential for attracting foreign investment into the hydrogen sector.
“This includes clear long term energy transition plans, encompassing renewable energy targets and measures to create local hydrogen demand, long-term visibility of hydrogen auction schedules and transparent and fair criteria,” the report points out.
Due consideration must also be given to a number of objectives in order to drive a rapid ramp-up of the hydrogen market, says Guidehouse. These factors include: “support for first-mover and pilot projects, hydrogen infrastructure planning and/or provision, and alignment with key offtake markets regarding their requirements as well as on instruments for creating offtake certainty”.
Titled, ‘Hydrogen Fuelled Economies: Opportunities for economic value creation from green hydrogen in Oman,’ the report by business management consulting firm Guidehouse Germany delves into the job generation potential of this nascent sector, as well as its contribution to the country’s future GDP growth.
It was compiled for the German Federal Ministry for Economic Affairs and Climate Action (BMWK) and Ministry of Energy and Minerals (MoEM) of the Sultanate of Oman.
A central finding of the report is the future green-hydrogen economy’s sizable job creation potential. “Based on the 2050 production targets, the hydrogen economy is expected to create 291,000 to 381,800 employment opportunities, 46-50 per cent of which are connected to the deployment of renewable electricity, depending on the share of equipment and machinery that is imported to Oman (rather than produced locally),” it said.
Hydrogen production is targeted to reach around 8 million tonnes per annum by 2050, which part of this volume expected to be utilised locally as a zero-carbon energy resource for hard-to-abate industries, including steel, aluminium and cement. Oman expects a number of international manufacturers to set up their operations at Duqm SEZ, where much of this hydrogen capacity is anticipated to materialise over the coming decades.
Significantly, around a quarter of the total employment is direct employment while the rest is created indirectly, according to Guidehouse. The employment potential from renewable energy scale-up is the largest driver representing around half the overall potential employment the report noted.
Beneficial impacts to the country’s Gross Domestic Product (GDP) are also expected to be significant, according to the report. Future sales of green hydrogen and related products are also estimated to contribute in the order of 31–51 per cent of current GDP levels, with new revenue sources effectively offsetting expected declines in oil and gas revenues. The report stresses the need for Oman to tap the experience and technological capabilities of leading economies, notably Germany, in harnessing the full potential of its new green hydrogen economy. Also imperative, it notes, is a supportive regulatory and policy environment that is essential for attracting foreign investment into the hydrogen sector.
“This includes clear long term energy transition plans, encompassing renewable energy targets and measures to create local hydrogen demand, long-term visibility of hydrogen auction schedules and transparent and fair criteria,” the report points out.
Due consideration must also be given to a number of objectives in order to drive a rapid ramp-up of the hydrogen market, says Guidehouse. These factors include: “support for first-mover and pilot projects, hydrogen infrastructure planning and/or provision, and alignment with key offtake markets regarding their requirements as well as on instruments for creating offtake certainty”.