Enabling GH2 markets and developing trade corridors
Published: 04:02 PM,Feb 19,2025 | EDITED : 08:02 PM,Feb 19,2025
Currently, most hydrogen production and consumption—primarily derived from fossil fuels—occurs at the same geographic sites, particularly in ammonia plants and oil refineries. However, as industries shift toward sustainability, demand for hydrogen is expected to diversify, expanding into heavy industries, transportation, and power generation.
Unlike fossil fuel-based hydrogen, green hydrogen relies on renewable energy, often sourced from regions distinct from industrial hubs. This geographic and economic disparity, combined with evolving regulatory frameworks, is driving the need for global trade corridors to transport hydrogen across borders.
Several nations are planning to import green hydrogen or its derivatives to overcome domestic constraints such as limited land, high production costs, and regulatory hurdles. The European Union (EU), for example, aims to import half of its hydrogen demand, while South Korea, Japan, and Singapore have set ambitious import targets.
Major ports are now competing to become global hydrogen hubs. Key contenders in the EU include Amsterdam and Rotterdam in the Netherlands, Antwerp in Belgium, and Rostock in Germany. Oman, with strong ties to these nations, is strategically positioned to play a critical role in the emerging hydrogen economy. Recent visits by His Majesty Sultan Haitham bin Tarik to Belgium, Singapore, and Germany have further cemented bilateral cooperation, opening doors for joint investments in hydrogen and clean energy.
REGULATORY DRIVERS FOR GREEN HYDROGEN
Governments worldwide are enacting policies to accelerate the energy transition and reduce carbon emissions. The EU’s Carbon Border Adjustment Mechanism (CBAM), set to take full effect in 2026, will impose tariffs on high-emission imports, including steel, cement, fertilizers, hydrogen, aluminum, and electricity.
Additionally, the EU Renewable Energy Directive mandates that by 2030, at least 42% of industrial hydrogen use must come from green hydrogen, with 1% of transport energy also sourced from hydrogen. Member states are required to develop sectoral roadmaps and introduce financial incentives.
Germany, among other EU nations, has launched a domestic carbon trading system, increasing carbon pricing and imposing future penalties on industries reliant on conventional hydrogen. Meanwhile, Japan plans to cap carbon credits for high-emission industries starting in 2026, imposing fines for exceeding set limits.
GOVERNMENT INCENTIVES AND INFRASTRUCTURE EXPANSION
Beyond regulatory targets, governments are investing heavily in hydrogen production and infrastructure:
• The EU Hydrogen Bank has been launched to support the green hydrogen market through dual-bid auctions and the European Innovation Fund.
• Germany is developing 9,000 km of hydrogen pipelines by 2032, with a total investment of €19 billion.
• South Korea and Japan have introduced cost-gap subsidies to bridge the price difference between fossil fuels and clean hydrogen, boosting demand.
As a result, green hydrogen projects are rapidly expanding, including:
• Hybrit (Sweden) – A 700 MW green steel project in Boden.
• Holland Hydrogen (Netherlands) – A 200 MW electrolyzer in Rotterdam.
• Neom (Saudi Arabia) – Expected to produce 200,000+ tons of green hydrogen annually.
• Mintal (China) – A green ammonia project with a capacity of 650,000 tons per year.
These projects are driving cost reductions and knowledge accumulation, accelerating the global hydrogen economy. Future growth will depend on technological advancements, declining renewable energy costs, and global energy security concerns, including the impact of the Fukushima disaster and the Russia-Ukraine war.
THE RISE OF HYDROGEN AGGREGATORS
A new category of market players, Hydrogen Aggregators, is emerging to bridge the gap between producers and buyers. These entities—whether public or private—facilitate contracting, logistics, long-term purchase agreements, and market access for green hydrogen.
Aggregators cater to multiple sectors, including data centers, oil refineries, steel production, fertilizers, transport, gas grids, semiconductors, and sustainable aviation fuel. While individual demand may be limited, aggregators consolidate smaller needs into commercial-scale purchases.
For example, German companies EnBW and VNG are positioning themselves as hydrogen demand aggregators within the EU, engaging with industries and ports such as Amsterdam, Rotterdam, and Rostock to develop a robust hydrogen market.
HYDROGEN INDUSTRIAL CLUSTERS IN SOUTH KOREA AND JAPAN
To strengthen their hydrogen economies, South Korea and Japan are developing hydrogen industrial zones:
• South Korea plans three coastal hydrogen clusters in Samcheok, Donghae, and Pohang to streamline domestic hydrogen production, import logistics, and infrastructure development.
• Japan, through its “Promotion of a Hydrogen Society” Act, will designate eight to ten hydrogen clusters over the next decade, including three large-scale hubs at major ports and five medium-sized hubs in regional areas.
OMAN’S ROLE IN THE GLOBAL HYDROGEN MARKET
The Ministry of Energy and Minerals and Hydrogen Oman (Hydrom) are actively collaborating with hydrogen aggregators and international ports to connect Omani hydrogen producers with global markets. Key partnerships include:
• EnBW and the Port of Amsterdam – Studying EU market demand and optimal hydrogen transport strategies.
• The Port of Singapore – Analyzing Asian hydrogen demand and regulatory impacts.
Hydrom is also facilitating negotiations between Omani hydrogen developers and global buyers to secure final investment decisions.
Additionally, Oman is exploring investments in various clean hydrogen types, including geological (natural) and blue hydrogen, while assessing domestic and international supply chain opportunities. Omani companies are encouraged to form strategic partnerships to integrate the hydrogen value chain and enhance global market access.
CONCLUSION
With global hydrogen markets taking shape, policy incentives, infrastructure investment, and technological advancements will determine the pace of development. Oman’s strategic positioning, strong international partnerships, and growing hydrogen ecosystem position it as a key player in the emerging green hydrogen economy.
The author is Director of Hydrogen Policies and Strategies Department – Ministry of Energy and Minerals
Unlike fossil fuel-based hydrogen, green hydrogen relies on renewable energy, often sourced from regions distinct from industrial hubs. This geographic and economic disparity, combined with evolving regulatory frameworks, is driving the need for global trade corridors to transport hydrogen across borders.
Several nations are planning to import green hydrogen or its derivatives to overcome domestic constraints such as limited land, high production costs, and regulatory hurdles. The European Union (EU), for example, aims to import half of its hydrogen demand, while South Korea, Japan, and Singapore have set ambitious import targets.
Major ports are now competing to become global hydrogen hubs. Key contenders in the EU include Amsterdam and Rotterdam in the Netherlands, Antwerp in Belgium, and Rostock in Germany. Oman, with strong ties to these nations, is strategically positioned to play a critical role in the emerging hydrogen economy. Recent visits by His Majesty Sultan Haitham bin Tarik to Belgium, Singapore, and Germany have further cemented bilateral cooperation, opening doors for joint investments in hydrogen and clean energy.
REGULATORY DRIVERS FOR GREEN HYDROGEN
Governments worldwide are enacting policies to accelerate the energy transition and reduce carbon emissions. The EU’s Carbon Border Adjustment Mechanism (CBAM), set to take full effect in 2026, will impose tariffs on high-emission imports, including steel, cement, fertilizers, hydrogen, aluminum, and electricity.
Additionally, the EU Renewable Energy Directive mandates that by 2030, at least 42% of industrial hydrogen use must come from green hydrogen, with 1% of transport energy also sourced from hydrogen. Member states are required to develop sectoral roadmaps and introduce financial incentives.
Germany, among other EU nations, has launched a domestic carbon trading system, increasing carbon pricing and imposing future penalties on industries reliant on conventional hydrogen. Meanwhile, Japan plans to cap carbon credits for high-emission industries starting in 2026, imposing fines for exceeding set limits.
GOVERNMENT INCENTIVES AND INFRASTRUCTURE EXPANSION
Beyond regulatory targets, governments are investing heavily in hydrogen production and infrastructure:
• The EU Hydrogen Bank has been launched to support the green hydrogen market through dual-bid auctions and the European Innovation Fund.
• Germany is developing 9,000 km of hydrogen pipelines by 2032, with a total investment of €19 billion.
• South Korea and Japan have introduced cost-gap subsidies to bridge the price difference between fossil fuels and clean hydrogen, boosting demand.
As a result, green hydrogen projects are rapidly expanding, including:
• Hybrit (Sweden) – A 700 MW green steel project in Boden.
• Holland Hydrogen (Netherlands) – A 200 MW electrolyzer in Rotterdam.
• Neom (Saudi Arabia) – Expected to produce 200,000+ tons of green hydrogen annually.
• Mintal (China) – A green ammonia project with a capacity of 650,000 tons per year.
These projects are driving cost reductions and knowledge accumulation, accelerating the global hydrogen economy. Future growth will depend on technological advancements, declining renewable energy costs, and global energy security concerns, including the impact of the Fukushima disaster and the Russia-Ukraine war.
THE RISE OF HYDROGEN AGGREGATORS
A new category of market players, Hydrogen Aggregators, is emerging to bridge the gap between producers and buyers. These entities—whether public or private—facilitate contracting, logistics, long-term purchase agreements, and market access for green hydrogen.
Aggregators cater to multiple sectors, including data centers, oil refineries, steel production, fertilizers, transport, gas grids, semiconductors, and sustainable aviation fuel. While individual demand may be limited, aggregators consolidate smaller needs into commercial-scale purchases.
For example, German companies EnBW and VNG are positioning themselves as hydrogen demand aggregators within the EU, engaging with industries and ports such as Amsterdam, Rotterdam, and Rostock to develop a robust hydrogen market.
HYDROGEN INDUSTRIAL CLUSTERS IN SOUTH KOREA AND JAPAN
To strengthen their hydrogen economies, South Korea and Japan are developing hydrogen industrial zones:
• South Korea plans three coastal hydrogen clusters in Samcheok, Donghae, and Pohang to streamline domestic hydrogen production, import logistics, and infrastructure development.
• Japan, through its “Promotion of a Hydrogen Society” Act, will designate eight to ten hydrogen clusters over the next decade, including three large-scale hubs at major ports and five medium-sized hubs in regional areas.
OMAN’S ROLE IN THE GLOBAL HYDROGEN MARKET
The Ministry of Energy and Minerals and Hydrogen Oman (Hydrom) are actively collaborating with hydrogen aggregators and international ports to connect Omani hydrogen producers with global markets. Key partnerships include:
• EnBW and the Port of Amsterdam – Studying EU market demand and optimal hydrogen transport strategies.
• The Port of Singapore – Analyzing Asian hydrogen demand and regulatory impacts.
Hydrom is also facilitating negotiations between Omani hydrogen developers and global buyers to secure final investment decisions.
Additionally, Oman is exploring investments in various clean hydrogen types, including geological (natural) and blue hydrogen, while assessing domestic and international supply chain opportunities. Omani companies are encouraged to form strategic partnerships to integrate the hydrogen value chain and enhance global market access.
CONCLUSION
With global hydrogen markets taking shape, policy incentives, infrastructure investment, and technological advancements will determine the pace of development. Oman’s strategic positioning, strong international partnerships, and growing hydrogen ecosystem position it as a key player in the emerging green hydrogen economy.
The author is Director of Hydrogen Policies and Strategies Department – Ministry of Energy and Minerals