The Rise of the Middle East as a Clean Ammonia Powerhouse
Key Ideas
  • The Middle East is transitioning from hydrocarbons to clean hydrogen and green ammonia production, leveraging abundant solar energy.
  • Green ammonia is becoming a key component of the clean fuel economy, with potential to decarbonize aviation and other hard-to-abate sectors.
  • Advantages such as cost competitiveness, abundant renewable energy, and international interest position the Middle East as a leader in clean ammonia production.
  • However, progress on announced projects remains slow, requiring government policy interventions to provide certainty and drive investment.
The article discusses the emergence of the 'New Industrial Sunbelt,' encompassing solar-rich countries in the Middle East, North Africa, Latin America, and Asia, which are transitioning towards clean industrial projects. The Middle East, historically reliant on hydrocarbons, is now at the forefront of clean hydrogen and green ammonia production due to its abundant solar energy resources. Governments in the region, from Saudi Arabia to Oman, are investing heavily in green hydrogen infrastructure, clean fuel export hubs, and ammonia synthesis facilities to capitalize on the shift towards a net-zero world. Green ammonia has significant implications for decarbonizing aviation and other hard-to-abate sectors. The Middle East's production of green ammonia, with projected cost advantages over grey ammonia by 2035, is set to play a crucial role in the global clean fuel economy. The region's renewable electricity, cost competitiveness, and infrastructure capacity give it a competitive edge, attracting international interest in offtake agreements. Despite the promising pipeline of projects, progress has been slow, with many initiatives stalled in pre-investment stages. The article emphasizes the importance of government policies to drive progress, including mandates for clean fuels, export regulations, carbon pricing, and public funding. Developing a domestic demand for clean fuels is also highlighted as a key strategy to attract investment and ensure resilience. The global impact of the Middle East's clean ammonia production could be transformative, offering opportunities for international trade partnerships and reducing Europe's reliance on fossil-based imports. The article concludes by underscoring the need for a combination of geography, policy, and leadership to facilitate the region's transition towards a post-oil future in the clean industrial revolution.
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