The pace, scope and range of the UAE’s efforts to decarbonise its energy sector are accelerating as it prepares to serve as the controversial host of the UN’s flagship COP climate change summit in less than two months’ time.

State-owned Adnoc and affiliated clean energy developer Masdar have signed deals signalling intent to move into the production of green hydrogen-based synthetic methane (e-methane) with partners from northern Europe and Japan—the main target markets for the emirate’s hydrogen export ambitions.

Meanwhile, Adnoc picked the run-up to COP28 to highlight its contention that plans to significantly increase hydrocarbons production are compatible with its commitment to global decarbonisation by announcing FID on a major CCS plant in western Abu Dhabi.

5mt/yr – Adnoc’s 2030 CCS target

In July, the federal government published a long-promised National Hydrogen Strategy, adopting targets to produce 1.4mt/yr (split 5/2 between green and blue hydrogen) by 2031, 7.5mt/yr by 2040 and 15mt/yr by mid-century—both for export and for domestic abatement purposes.

The focus of Abu Dhabi’s ‘power-to-fuel’ efforts has been on converting low-carbon hydrogen production into ammonia. Adnoc, fertiliser affiliate Fertiglobe, Japan’s Mitsui and South Korea’s GS Energy signed a shareholders’ agreement in January on a planned 1mt/yr blue ammonia plant at the nascent Ta’ziz chemicals cluster near Ruwais, the emirate’s western hydrocarbons hub. Masdar, Fertiglobe and France’s Engie announced plans in 2022 for a 200MW green hydrogen facility intended to decarbonise the fertiliser firm’s existing ammonia production.

However, the Emirati companies’ synthetic fuel plans took a new direction in July through Masdar’s agreement with Japan’s state-owned Inpex to conduct a feasibility study on the potential development of e-methane production in Abu Dhabi for export to Japan.

Inpex and other Japanese firms have been deeply involved in the UAE’s hydrogen planning from the outset. This reflects the depth of their existing oil- and gas-based ties and the expected role of synthetic gas in Tokyo’s decarbonisation strategy.

In early September, Adnoc became directly involved in the e-methane sector by signing a strategic collaboration agreement with Belgium-based startup Tree Energy Solutions to study the feasibility of e-fuel production in both the UAE and the US, and to work on establishing a domestic and export market for the output.

The European firm’s flagship project comprises the development of an FSRU focused on the import of low-carbon fuel into Europe via the port of Wilhelmshaven in northern Germany.

Adnoc exported its first blue ammonia cargo to Germany in September 2022. E-methane is especially attractive to the firm for its compatibility with existing infrastructure.

US collaborations

The UAE also has ambitions to enter the US’ embryonic e-methane market. The two governments signed an agreement—the Partnership to Accelerate Transition to Clean Energy—in November to collaborate in stimulating $100b in financing, investment and other support for clean energy and carbon-management projects worldwide by 2035.

Separately, a strategic collaboration agreement between Adnoc and Texas-based Occidental Petroleum in August to explore co-investment opportunities in both markets in direct air capture (DAC) and CCS was placed in the context of the intergovernmental deal. The companies’ pact includes evaluating possible development of a 1mt/yr DAC facility in the UAE, the first such plant of that size outside the US. Abu Dhabi is already dipping its toe into DAC to feed a pilot CO₂ mineralisation project under construction in the eastern emirate of Fujairah.

Occidental already has strong ties with Adnoc, having developed its first sour gas plant, producing 1.45bcf/d at the Shah onshore gas field. The facility is envisaged as the site of Adnoc’s third CCS facility.

The second, on which FID was announced on 6 September, will be located at the vast Habshan gas-processing plant. It will capture 1.5mt/yr of CO₂ and store it in deep underground reservoirs, ahead of potential use in carbon-intensive enhanced oil recovery and in production of low-carbon fuels. Bids are under evaluation for the main construction contract. Adnoc’s stated aim is to increase CCS capacity just over sixfold to 5mt/yr by 2030.

In another strategically timed announcement, the company in late July brought forward its net-zero target by five years to 2045, although it still excludes scope three emissions from the calculation.

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Author: Clare Dunkley