Abu Dhabi’s Masdar to invest in green hydrogen programmes

Abu Dhabi’s clean energy company is investing in various programmes to determine the commercial viability of hydrogen and is forging new partnerships to position the Middle East as a global hub for the clean fuel, its chief executive said.

“Masdar will become a green hydrogen champion” through the new initiatives, Mohamed Al Ramahi said during Abu Dhabi Sustainability Week summit on Monday.

Hydrogen is emerging as an important cleaner fuel as the world focuses on reducing emissions to protect the environment.

Globally, the size of the hydrogen industry is expected to hit $183 billion by 2023, up from $129bn in 2017, according to Fitch Solutions. French investment bank Natixis estimates that investment in hydrogen will exceed $300bn by 2030.

Mr Al Ramahi also said Masdar will become Abu Dhabi’s “clean energy powerhouse” once Abu Dhabi National Oil Company and Taqa join as its new shareholders in the coming months.

“By summer when we expect our new investors to be formally on board, Masdar will be Abu Dhabi’s clean energy powerhouse,” he said. “We will have a portfolio of 23 gigawatts of clean energy capacity around the world and ambitions to reach at least 50 gigawatts by 2030.”

Taqa is set to take the leading role with a 43 per cent shareholding in Masdar’s renewable energy business with Mubadala retaining a 33 per cent share and Adnoc holding a 24 per cent stake after the completion of the transaction.

Adnoc will take 43 per cent shareholding in Masdar’s green hydrogen business, with Mubadala holding 33 per cent and Taqa 24 per cent, according to an announcement last month.

Renewable energy is also at the heart of the UAE’s ambitions to achieve carbon-neutrality. In October, the UAE became the first country in the Middle East and North Africa to pledge to offset all of its domestic carbon emissions by 2050, followed by Saudi Arabia and Bahrain.

The UAE plans to invest $160bn over the next three decades to accelerate the development of its renewable energy sector.

The Abu Dhabi Investment Office, a government body tasked with overseeing foreign investments into the emirate, last year developed a policy to maximise the environmental, social and governance (ESG) benefits of its incentives and public-private partnership programmes. It will encourage companies that have sustainability principles embedded into their management and operations and will initiate discussions with those that have not yet incorporated ESG standards.

"ESG initiatives are a must for businesses," Mohammed Ali Al Shorafa Al Hammadi, chairman of Abu Dhabi Department of Economic Development, said during the summit. "Not only do they help companies identify opportunities, but also improve performance, boost cash flow and reduce costs."

The Abu Dhabi government is committed to widespread ESG adoption by companies to help diversify the country's economy away from oil, with Adio at the centre of these efforts, Mr Al Hammadi said.

Abu Dhabi is focused on developing its non-oil sector, from advanced technology to local manufacturing, in line with the country's economic diversification strategy. Adio is facilitating private sector participation into the broader economy through public-private partnerships and maximises benefits to companies that adhere to sustainability standards.

Adio is seeking to attract companies with ESG policies at their core, for example by partnering with AgTech companies that that focus on locally relevant issues and globally exportable products.

"We are already feelings the impact committed to our vision of Abu Dhabi being a city that continues to prosper through leading sustainable development practises," Mr Al Hammadi said.

"This is the future," he said. "I urge you to seize the investment opportunities in Abu Dhabi by first getting in touch with Adio... a one-stop shop for all matters related to FDI with priority placed on ESG-focused companies."

To achieve net-zero targets by mid-century, countries must adopt more energy-efficient practises and essential lifestyle adjustments, Awaidha Al Marar, chairman of Abu Dhabi Department of Energy, said in a statement.

"Renewable energy is the alternative to fossil fuels and despite the decline in prices of solar and wind energy, it is somehow still not growing as fast as we need it to,” he said.

"Besides investment in research and development and technology, it is critical that we form new regional and international partnerships," Mr Al Marar said, adding that ADSW is the ideal platform to do that.

The UAE, which accounts for more than 70 per cent of all installed renewable energy capacity in the region, will be hosting the Cop28 in Abu Dhabi in 2023 at a platform that will bring stakeholders to work together on practical climate solutions and sustainable economic growth.