Dh200 billion energy strategy shows the UAE is serious about a greener future

A man connects an hydrogen pump to a fuelcell-powered car. The development of a scalable hydrogen industry will provide UAE opportunities for many companies. AFP

Amid rising temperatures and the world’s hunt for cleaner, greener forms of energy, few hold out as much promise as hydrogen. As a fuel, it is sustainable and climate friendly, readily available and packed with potential. Although many are right to be excited about how hydrogen could change our world, the main processes currently used to isolate the chemical element come with a significant environmental footprint. Much work remains to be done to refine the technology and ensure hydrogen is a practical, transformative energy source.

Monday’s announcement by the UAE Cabinet that the country will invest up to Dh200 billion ($54.4 billion) over the next seven years in an updated national energy strategy – that includes hydrogen – is a tangible and public commitment to developing the UAE as an energy hub. At a time when calls for concrete action from governments are growing louder, it is hard to argue against the significance of an investment that translates to an average of $7.7 billion year.

Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said the plan aimed to make the UAE a “producer and source of low-emission hydrogen … by developing supply chains and creating hydrogen hubs to develop this promising industry, in addition to establishing a specialised national research and development centre for the hydrogen sector”.

Indeed, it is a sector that shows much promise. The development of a scalable hydrogen industry will provide investment opportunities for homegrown and foreign companies, who can take advantage of the UAE’s progressive business environment. Developing cleaner ways to produce, distribute and use hydrogen is knowledge that will not just benefit this country, but could be used collaboratively by other nations who are on the path to developing their own net-zero strategies. And when taken in context with the UAE’s Energy Strategy 2050 – particularly its continuing work on developing solar power – hydrogen will play an important part in the country’s energy mix for years to come.

Monday’s Cabinet commitment also builds on much of the tangible work already being undertaken by various entities in the UAE. For example, in May, Abu Dhabi’s clean energy company Masdar said it had nearly doubled its clean energy capacity and carbon dioxide displacement in two years. The company also grew its renewable energy capacity to 20 gigawatts in 2022, producing 18,000 gigawatt hours of clean energy and reducing carbon dioxide emissions by 10 million tonnes. That month, Masdar also signed an initial agreement with the International Renewable Energy Agency, Irena, to co-operate on a major research project that will lead to the tripling of global renewable energy capacity by 2030.

This latest investment commitment comes at a time when question marks hang over funding for alternative energies to mitigate climate change. In February, Irena released a report that said although renewables investment globally is rising, it is not enough to meet its 1.5°C temperature-rise scenario. It also claimed that investments were not on track to achieve the goals set by the UN’s 2030 Agenda for Sustainable Development.

That assessment, when contrasted with the considerable investment just promised by the UAE, should focus minds on the task ahead. The Cabinet’s seven-year commitment is a relatively short timetable to fully develop a low-emission energy source such as hydrogen. It shows the international community the priority it is being given at the highest level and chimes with comments from Dr Sultan Al Jaber, president-designate of the Cop28 summit who said in February the world is “playing catch-up when it comes to holding global temperatures down to 1.5°C”.

Hydrogen’s allure as a source of zero-emission energy is a strong one. To turn that promise into energy that can power businesses, transport and homes will take years of urgent work. The UAE has already fired the starting pistol in this race and is showing that when it comes to true climate action, it is already on its way.