A new green hydrogen firm? The Public Investment Fund (PIF) reportedly plans to invest at least USD 10 bn in green hydrogen production via a newly-formed company named Energy Solutions, Bloomberg reports, citing unnamed sources it says are familiar with the matter. News of the firm’s launch is expected as early as this month, sources say. Saudi Aramco is said to be a co-investor in the new company, although the size of its contributions is unknown.

Saudi has big green hydrogen plans: The Kingdom’s USD 8.4 bn green hydrogen plant at Neom is set to reach full capacity by the end of 2026. The Neom Green Hydrogen Company reached financial close with financing from 23 local, regional, and international banks and financial institutions back in May 2023. The mega facility will produce up to 600 tons of green hydrogen per day, with the capacity to produce 1.2 mn tons of green ammonia annually. The plant will source its power needs from up to 4 GW of solar and wind energy. US-based Air Products secured an exclusive 30-year off-take agreement for all the green ammonia produced at the plant.

ICYMI- Investment Minister Khalid Al Falih recently tapped Italy as a “partner of choice” through which the Kingdom can channel hydrogen exports to Europe. Al Falih also cited a need to build out ports and pipelines to carry low carbon energy exports to Europe.

Blue hydrogen is also on the cards: The Kingdom is looking to establish a global presence in blue hydrogen production as well, with a goal of eventually supplying 15% of the world’s blue hydrogen volumes, PIF Governor and Aramco Chairman Yasir Al Rumayyan said back in February. The country’s eastern region is well-positioned to support the development of a blue hydrogen industry due to existing oil and gas production infrastructure and access to deep saline aquifers for CO2 storage, according to the King Abdullah Petroleum Studies and Research Center.

SOUND SMART- Green vs. blue hydrogen: Green hydrogen is produced using renewable energy such as wind or solar power to split water into hydrogen and oxygen, emitting zero carbon in the process. However, it comes with a higher price tag due to costly production and infrastructure demands. Blue hydrogen on the other hand is produced from natural gas with carbon emissions captured and stored to mitigate environmental impact. It is less expensive to make and can be scaled faster with existing infrastructure but its reliance on fossil fuels presents a trade-off in terms of sustainability.

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