$230 bn required to unlock hydrogen export economy in Oman
MUSCAT: Oman’s National Strategy for an Orderly Transition to Net Zero envisions the need for an additional $230 billion in investments to help unleash the country’s full potential as a global scale green hydrogen exporter. This is on top of investments to the tune of $190 billion that will be necessary to fund the nation’s pathway to Net Zero by 2050.
The National Strategy, unveiled by the Ministry of Energy and Minerals, advocates an ‘orderly transition’ to Net Zero underpinned by five key objectives: environmental sustainability, energy system costs, economic impact, social impact and security of supply.
As a smooth and sustainable transition, it espouses the implementation of the lowest-cost decarbonization levers first as they become economically viable, followed by the activation of levers to address harder-to-abate emissions.
“An orderly transition path could help Oman abate 97 million tonnes of carbon dioxide equivalent (Mt CO2e) by 2050, with decarbonization through 2030 and 2040 accounting for 6 per cent and 54 per cent of the total pathway respectively relative to 2021 emissions,” the National Strategy points out.
“Industry, oil and gas and transport would drive these efforts,” it further explained. “This pathway would result in a remaining “last mile” gap of ~8 per cent (7Mt) that could be addressed through breakthrough decarbonization technologies and natural negative emissions (e.g., direct-air capture (DAC) of carbon with storage in depleted reservoirs or planting mangrove trees to absorb atmospheric carbon), and critical behavioral changes (e.g., substituting carbon-intense products or materials).”
Importantly, the national strategy identifies the six principal decarbonization technologies to drive the orderly transition to Net Zero: Energy and resource efficiency, Electrification and renewables, Battery electric technology, Sustainable hydrogen, Carbon capture and storage, and Negative-emission solutions.
Together, these technologies will help cover around 90 per cent of CO2 abatement by 2050. Nevertheless, they need to be supplemented by other initiatives, such as long-duration energy storage, building new infrastructure such as electric vehicle charging networks, ramping up adoption of electric vehicles, introducing new policies and legislation, such as policies to incentivize behavioral changes, and rolling out market mechanisms in the form of carbon pricing, for example.
Significantly, the pathway to Net Zero comes with hefty price-tags: A ballpark $190 billion in capital investment is estimated relative to Oman’s ‘business-as-usual’ scenario. This expenditure will cover allocations towards power and hydrogen infrastructure, including the upgrade and expansion of the country’s electricity grid, hydrogen pipelines and storage, as well as electric vehicle charging infrastructure and deployment of long-duration energy storage.
“If we include investment required to unlock a hydrogen export economy, the capital investment required would increase by an additional $230 billion (approximately),” it added.
Five sectors – industry, Oil & Gas, power, transport, and buildings – account for around 95 per cent of Oman’s net emissions estimated at 90 million tonnes of CO2-equivalent in 2021. Without serious interventions, emissions could rise 16 per cent to 104 Mt CO2e by 2050, the document warns.