The Mideast Gulf region has experienced a major shift in its energy production and consumption patterns over the past few years. Once closely associated with oil and gas extraction, it has gradually shifted toward cleaner and more sustainable energy sources that support its long-term environmental goals. Recent data from the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf showed encouraging progress in renewable energy development in the last decade, with the installed capacity of solar power plants increasing at an annual rate of 88.1% and wind energy capacity rising from 4.8 megawatts in 2015 to 567 MW in 2024. GCC members have also incorporated their climate resilience objectives into broader national strategies, exemplified in the net-zero targets of We the UAE 2031, Saudi Vision 2030 and Qatar National Vision 2030. The most promising source of clean energy for the region, however, has emerged in the form of hydrogen.
Hydrogen is the most abundant element in the universe, and, when used to generate energy, produces only water. It can be combusted, as we do with other gaseous fuels, and used in a fuel cell to generate electricity, power vehicles and heat buildings. Nevertheless, hydrogen does not naturally exist in its pure form on Earth at a large scale; it must be separated from other substances, which consumes energy. This process of producing hydrogen can occur in different ways, categorized by color as “blue hydrogen,” “green hydrogen’” or “gray hydrogen.” In the countries of the GCC — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — both blue and green hydrogen play a pivotal role.
The Promise of Green Hydrogen
Green hydrogen is produced by electrolysis, in which electricity from renewable sources such as solar and wind is used to split water into hydrogen and oxygen. As renewable electricity is used in the process, green hydrogen can be produced with very low operational carbon emissions.
The GCC has several natural advantages that make this pathway particularly attractive. The region has abundant solar resources, significant areas of land suitable for large renewable energy developments, and growing expertise in delivering large-scale energy projects. Renewable electricity costs have also declined considerably. According to the International Renewable Energy Agency, solar photovoltaic power remained one of the world’s most competitive sources of new electricity in 2025, with a global average cost of $44 per megawatt hour.
Several major projects are already testing the region’s ability to translate these advantages into a viable hydrogen industry. Saudi Arabia’s Neom Green Hydrogen project is one of the most prominent examples. Powered by 4 gigawatts of renewable energy, the project is designed to produce up to 600 tons of carbon-free hydrogen per day in the form of green ammonia. Oman has also placed green hydrogen at the center of its energy transition strategy, aiming to produce at least one million tons of renewable hydrogen annually by 2030.
However, green hydrogen continues to face economic and technical challenges. Electrolysers require a considerable upfront investment, while producing hydrogen at scale requires large and reliable supplies of renewable electricity. Water availability must also be considered in an arid region, particularly where desalinated water is required. The infrastructure needed to store, transport and export hydrogen, and its derivatives adds another layer of cost.
These challenges are visible globally. The International Energy Agency’s Global Hydrogen Review 2026 found that low-emissions hydrogen still represented less than 1% of global hydrogen production in 2025. High costs, uncertain demand, infrastructure requirements and slow project development are all factors that affect investment decisions.
Green hydrogen, therefore, has considerable long-term potential, but achieving commercial scale will require continued reductions in renewable energy and electrolyzer costs alongside stronger demand.
The Value of Blue Hydrogen
Blue hydrogen is produced through a different process that leverages the region’s existing capabilities. It is produced from natural gas, with carbon capture, utilization and storage technologies used to prevent a substantial proportion of the resulting CO2 from entering the atmosphere.
Gulf economies have extensive natural gas resources, established processing facilities, energy infrastructure and decades of technical expertise in managing large hydrocarbon projects. Some countries also have geological formations that could support the permanent storage of captured carbon dioxide.
This allows blue hydrogen projects to scale using parts of the region’s existing energy ecosystem while new green hydrogen infrastructure continues to develop. The UAE and Saudi Arabia are already developing this capability. Adnoc is working to produce 1 million tons of low-carbon ammonia annually through its TA’ZIZ ecosystem in Ruwais. In Saudi Arabia, Aramco completed the acquisition of a 50% stake in the Blue Hydrogen Industrial Gases Company in Jubail in 2025. The venture is expected to supply hydrogen, including lower-carbon hydrogen produced from natural gas using carbon capture and storage (CCS), to the Jubail Industrial City area.
Nonetheless, blue hydrogen has its own challenges: Its environmental performance depends significantly on the amount of CO2 captured during production and the management of methane emissions throughout the natural gas supply chain. CCS also requires investment in transport, storage and monitoring infrastructure. Clear standards for measuring hydrogen’s carbon intensity will therefore become increasingly important, particularly for exports to markets with strict emissions requirements.
The Present Looks Blue, But the Future Might Be Green
The question for the GCC is therefore less about choosing one form of hydrogen at the expense of another and more about determining where each pathway can deliver the greatest economic and environmental value.
In the near term, blue hydrogen offers a practical route to scale. It can draw on the region’s natural gas resources, industrial infrastructure and technical expertise while supporting the development of carbon capture capabilities.
Over the longer term, green hydrogen could offer a more sustainable pathway. Continued expansion of renewable energy, improvements in electrolyzer technology, economies of scale and production costs could gradually be reduced. Projects in Saudi Arabia and Oman will also demonstrate whether green hydrogen can be produced competitively at the scale required for international markets.
The Way Ahead
Hydrogen is unlikely to replace the GCC’s existing energy system in the near term. Its importance lies in its potential to complement the region’s expanding renewable energy sector while helping reduce emissions in industries that are difficult to electrify directly. Blue hydrogen can provide an important pathway during the early stages of this transition, while green hydrogen has the potential to assume a larger role as technology improves and costs decline.
For the GCC, pursuing both pathways with clear emissions standards, investment discipline and a strong focus on market demand may offer the most practical route toward building a competitive hydrogen economy.
Dr. Vahid Razaviarani is an assistant professor at the School of Engineering and Physical Sciences, Heriot-Watt University Dubai. The views expressed in this article are those of the author.
