21st March 2023

Royal Decree to strengthen Oman’s position in renewable energy and green hydrogen projects

MUSCAT: The Sultanate of Oman is making great efforts to promote investment opportunities in clean energy, as it seeks to be a global center for the production of green hydrogen in light of the availability of ingredients such as the presence of solar energy, wind energy, and vast lands that attract investments in the production of clean energy, as it aims to produce no less than one million tons annually of green hydrogen by 2030, while it aims to produce 8 million tons annually of green hydrogen by 2050.

In accordance with the Royal directives and in order to enhance the development of this sector, attract investments and develop the infrastructure, Royal Decree No. 10/2023 was issued to allocate lands for the purposes of renewable energy and green hydrogen projects, which aims to maintain the competitiveness of green hydrogen production in the Sultanate of Oman and gain investors’ confidence in the demand for investment opportunities. It aims to enhance energy security, economic diversification programs and environmental preservation.

The decree included defining the areas designated for green hydrogen projects, which provides planning for the infrastructure for investment in the energy sector and its promotion, determine the mechanism for allocating and contracting investment opportunities in clean hydrogen that enhance confidence among investors in the sector.

Vast areas for clean energy production
Eng. Abdulaziz bin Said Al Shaithani, Director General of Renewable Energy and Hydrogen at the Ministry of Energy and Minerals, said: The Royal Decree reflects the importance of the renewable energy sector and clean hydrogen for the state. From the perspective of investors and developers, it represents the government's interest in structuring the green hydrogen sector and promoting the principle of transparency, publicity and competition, and reflects the Sultanate of Oman's desire to attract serious investments to participate in public auctions by allocating vast lands rich in natural resources.

Al-Shaithani added that the ministry, since last March, has been seeking, following the royal directives, the importance of accelerating the preparation of the regulatory and legal frameworks and policies necessary for the growth of the green hydrogen sector in the Sultanate of Oman and allocating suitable lands for green hydrogen production projects, by working on several parallel tracks, where a team was formed to unify the efforts of renewable energy projects headed by the Ministry of Energy and Minerals and the membership of a number of relevant authorities, and that these efforts resulted in defining about 50,000 square kilometers of land areas in the Al Wusta and Dhofar governorates allocated for green hydrogen production projects, in addition to more than 15,000 km in other governorates for clean energy projects.

The ministry also announced investment opportunities and a mechanism for offering them in October 2022, according to a strategy built to distribute roles among the various parties, including the establishment of the Oman Hydrogen Company (Hydrom), which was entrusted with promoting investment opportunities in this sector, coordinating procedures and managing the bidding process under regulatory supervision from the Ministry of Energy and Minerals.

The Royal directives set a clear path with the importance of keeping pace with the global shifts towards reducing carbon emissions, switching to energy alternatives, exploring and developing opportunities and maximizing them in the green economy.

Last year, the Sultanate of Oman announced its commitment to achieving zero carbon neutrality by the year 2050 through five main sectors, which are the green sector, Oil and gas, the electricity sector, the transportation sector, the industry sector, the buildings sector and urban planning. Oman also announced the establishment of the Oman Sustainability Center to follow up on the implementation of sectoral commitments and to unify and coordinate efforts. The first investment opportunities were on November 6, last year, through the Oman Hydrogen platform.

Al-Shaithani explained the most important industrial zones and free zones that can embrace such projects, pointing out that the green hydrogen projects in the first phase are concentrated in the governorates of Al Wusta and Dhofar, and other areas have been identified that serve the removal of carbon from the industrial and free zones in Sohar and Sur, pointing out that coordination has been made with The parties concerned with developing a general vision focusing on the production of clean electricity outside the scope of special economic zones and free zones, and providing these areas with clean energy to transform existing industries and attract new industries based on green energy.

He pointed out that the global expectations for hydrogen production are heading towards the production of about 400 million tons of hydrogen per year by 2050, of which 200 million tons of green hydrogen, with expectations of establishing more than 900 projects, where the announced projects in the construction or operation phase currently constitute 1%. More than 25 countries around the world have announced their ambitions and plans to establish projects in this field.

Targeting more investments
Najla Al-Jamali, CEO of Alternative Energy at OQ, said: “The decree reflects the supreme interest of His Majesty Sultan Haitham bin Tarik, may God protect him, in alternative energy and its importance in the future, and the government’s vision to benefit from renewable energy sources in the country, develop this sector and attract more Investments, and is a complement to the legislative framework for the hydrogen and renewable energy system, and is a factor of reassurance and attraction for investors.

She noted that OQ plays an important role in the field of alternative energy as the national developer of hydrogen and clean energy, considering that alternative energy is the locomotive that contributes to building a company that is leading locally, regionally and globally, expressing pride that renewable energy is among the company's strategies and its importance in removing carbon emissions to reach zero neutrality.

To this end, the company signed agreements in joint development and memorandums of understanding to develop four green hydrogen production projects with prominent international partners in the Special Economic Zone at Duqm, as well as in the governorates of Al Wusta and Dhofar, explaining that green hydrogen projects lie in its ability to play a vital role in global energy security while ensuring the reduction of carbon emissions, especially in light of the increasing demand and political crises.
Carbon neutrality
Dr. Firas bin Ali Al Abdwani, Acting Managing Director of Oman Hydrogen Company (Hydrom), stated: This decree is the first legislation in the renewable energy and clean hydrogen sector after His Majesty’s adoption of the goal of carbon neutrality by the year 2050 and his royal orders to establish a general directorate concerned with renewable energy and green hydrogen in the Ministry. Energy and minerals, in addition to the establishment of the Oman Hydrogen Company as an independent company, also represents the cornerstone towards enabling the green hydrogen economy in the Sultanate of Oman and strengthening its position among the countries of the world in moving towards clean energy and carbon neutrality.

Al-Abdwani indicated that the decree reflects the interest of the Sultanate of Oman in the field of renewable energy and green hydrogen and its desire to play a pivotal and vital role in achieving the security of energy supplies globally, as it seeks to diversify and enrich the local economy, localize supply chains and associated industries and create attractive and promising job opportunities. The Sultanate of Oman is serious about providing a competitive hydrogen sector at a competitive cost and creating a suitable environment for foreign direct investment.

Adapting to global changes
Al-Abdwani explained that Hydrom is dividing and allocating lands in stages according to well-studied plans to ensure the achievement of the Sultanate of Oman's ambitious goals in the field of renewable energy and clean hydrogen, and to verify the compatibility of allocation processes with Oman's Vision 2040 and the goal of carbon neutrality 2050, and the flexibility to adapt to global changes in the field of energy in terms of supply. And demand, and the process of land division and allocation aims to maximize the benefit from the Sultanate’s potentials represented in solar energy, wind energy, vast areas, its proximity to global markets, its stable credit rating, and its exceptional international relations on the other hand.

The issuance of the Royal Decree coincides with the first bidding phase put forward by Hydrom in November 2022, and the public bidding consists of two phases, as the first is concerned with allocating two areas for green hydrogen projects in the Wilayat of Duqm by April of this year, followed by the second phase with an allocation of 2 to 4 regions in the Dhofar Governorate with the aim of producing at least one million tons of green hydrogen by 2030.
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