Oman Energy Development subsidiary, Hydrom, invites global energy companies interested in sustainable energy to take part in the second round public auction for green hydrogen development in Dhofar Governorate.

Hydrom (Hydrogen Oman) was launched in 2022 to lead and manage Oman’s hydrogen strategy. In this auction, Hydrom will provide participating firms 3 prime blocks from 340km2 – 400km2 especially allotted to green hydrogen production. 

The goal is to take advantage of the largest Governorate’s renewable energy resources to establish a strong green hydrogen industry in the sultanate.

Driving Oman’s Green Hydrogen Growth 

Interested companies will go through a 3-stage evaluation process to find suitable applicants with robust financial, development, and operational capabilities: 

1st stage – Minimum Qualification Criteria for financial and expertise
2nd stage – Minimum Bid Criteria for project proposals aligning with Oman’s green hydrogen goals
3rd stage – Evaluation Framework

This process is to ensure a transparent and fair auction where qualified bidders with the right expertise and alignment are necessary for driving Oman’s green hydrogen growth. 

The next phase of the auction will begin this month, with a bid submission due in January next year. Companies wanting to join can find detailed information for the green H2 auction on Hydrom’s website. 

Hydrom was officially formed last June when the minister of energy and minerals, Salim bin Nasser Al Aufi, also chairman of Hydrom, signed 6 green hydrogen contracts worth $20 billion from various partners. These include large oil and gas companies such as BP and Shell. These first auction deals aim to produce 500,000 tonnes of green hydrogen each year in Oman. 

Now, the overall production target moves up to 1 million tonnes of green H2 by 2030, 3.75 million by 2040, and 8.5 million by 2050, which is more than Europe’s total current H2 demand. If met, Oman will become the world’s 6th biggest exporter of hydrogen by 2030. 

Oman’s 2040 hydrogen target is equivalent to 80% of its current LNG exports, while its 2050 goal doubles the volume. 

In July, Hydrom revealed that commitments from their green H2 deals increased to $30 billion. In December last year, Oman and the International Energy Agency (IEA) partnered on green hydrogen projects. 

Why Hydrogen? 

According to the World Bank, the global hydrogen market was valued at $130 billion in 2022. Industry estimates project it to grow by over 9% each year until 2030. 

First Hydrogen (FHYD) brings hydrogen vehicles to North America, Europe, and the UK

Currently, the hydrogen energy sector is still in its early stages of growth. Producing clean H2 or green hydrogen cheaply remains the biggest challenge for the industry to scale rapidly and globally. Fortunately, hydrogen is highly in demand in some industries and there are incentives in producing green H2.

Mckinsey & Company estimated that the total hydrogen production capacity announced by companies by 2030 increased by over 40% to 38 metric tons per year. This capacity is about half the volume needed to be on track to net zero (75 Mt p.a.).

Source: McKinsey & Company

Total announced direct investments in hydrogen also jumped from $240 billion to $320 billion to date.

While there are plenty of different hydrogen in rainbow colors, green hydrogen is the most desirable in terms of emissions. Green hydrogen refers to H2 produced entirely from renewable sources and in a process using water electrolysis. Other types are blue, gray, yellow, red, pick, and violet, depending on how the gas is produced. 

Oman’s hydrogen projects will use electrolysers powered by renewable energy to extract hydrogen from desalinated sea water. 

With the country’s bountiful solar and onshore wind resources, plus its huge land sizes for large-scale H2 projects, it can be the largest producer of H2 in the Middle East by 2030, as per IEA analysis. 

Additionally, Oman is situated along significant market routes between Europe and Asia, with existing fossil fuel pipelines that transport fuels. This available infrastructure and the country’s expertise in exporting LNG and ammonia benefit Oman in producing and transporting green hydrogen.  

Hydrogen is Key for Oman’s Net Zero Goal

Oman’s huge green hydrogen potential plays a crucial role in its net zero target it seeks to reach by 2050. 

The sultanate dedicates an area the size of Slovakia to solar power projects to produce green hydrogen. To date, 1,500km2 of land has been earmarked by Oman for green H2 development by 2030. Up to 40x more land has been identified for long-term potential production. 

Other Gulf nations are taking a different path by leaning towards a more private sector approach. Qatar outsources H2 production while Bahrain focuses on carbon capture and storage more than hydrogen. 

While Saudi is also developing hydrogen, it will not export the gas but use it mostly for steel production. Kuwait, on the other hand, doesn’t have a hydrogen strategy yet in place. 

Source: IEA Report

Achieving 2030 production target of renewable or green hydrogen in Oman requires a total investment of around $33 billion. As seen above, this goal also needs 50 TWh of renewable electricity generation, which is more than today’s total capacity. 

That needed capacity calls for a massive investment in renewable power in the Sultanate. Yet, it will also bring the benefits of reducing domestic use of natural gas by 3 billion m3 and avoiding 7 million tonnes of CO2 emissions each year. 

Reaching its green hydrogen targets would significantly contribute to Oman’s clean energy transition and net zero emissions goal. The Gulf nation’s ambitious initiative signifies that major fossil fuel producers can also make key changes to their energy mix and embrace a more sustainable and greener strategy. 

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned:

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Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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The United Arab Emirates Carbon Alliance has committed to buy $450 million carbon credits from the African Carbon Markets Initiative (ACMI) by 2030. 

The deal occurred at the first Africa Climate Summit where Sheikha Shamma bint Sultan, president and chief executive of the UAE Independent Climate Change Accelerators (UICCA) signed a letter of intent with ACMI. 

It’s one of the highly-anticipated announcements at the 3-day event currently taking place in Kenya this week. Participating country leaders and delegates come together to ramp up climate action on the continent. 

First African Carbon Credit Mega Deal 

UICCA launched the UAE Carbon Alliance in June to help companies transition to a green economy. This is part of the country’s Net Zero by 2050 Strategic Initiative.

The Emirati coalition includes members such as Mubadala Investment Company, First Abu Dhabi Bank, Masdar, and AirCarbon Exchange.

Fueling Africa’s push for carbon credits is the ACMI, launched at COP27 last year. The initiative brings together African countries and large climate investors including Bezos Earth Fund and Rockefeller Foundation. 

Their goal is to reduce emissions and bring transparency to voluntary carbon markets in the region through trading carbon offsets.

Run by McKinsey & Company, ACMI seeks to increase the stocks of African carbon credits to 300 million by 2030. Achieving this ambitious target needs great interest from large buyers and supporters of carbon markets.

African leaders particularly advocate for the use of market-driven financial mechanisms, such as carbon credits, also called offsets. These credits are created through projects that reduce emissions such as reforestation and shifting to renewable or cleaner energy sources.

Companies looking to compensate for their carbon emissions against their set targets can buy carbon credits. Each credit equals to preventing the release of one tonne of CO2. 

The ACMI founders believe that to get enough carbon credits for their goal, they must secure early commitment from investors. And the UAE Carbon Alliance is their biggest backer so far. 

The Emirati group aims to become “a leading hub for high integrity, high-quality carbon markets”, for trading carbon offsets. They seek to bridge the high-integrity supply of African carbon credits to high demand from the Middle East.

Globally, the demand for carbon credits is expected to grow exponentially despite criticisms thrown at the market. Industry estimates project that carbon offsets market size will surge to $250 billion by 2050.

Fostering Efficient Carbon Markets

Under UAE’s latest climate plan, the Gulf nation highlighted that while it focuses on meeting climate targets through domestic reduction efforts, it also “reserves the right” to tap into carbon offsets markets as specified in Article 6 of the Paris Agreement.

Reflecting the Middle East nation’s commitment, the Chairperson of the UAE Carbon Alliance, Khalifa Al Nahyan, said during the announcement:

“As we navigate the climate crisis, carbon markets stand as a pivotal tool in our decarbonisation journey… Through this pledge, we hope to foster more integrated and efficient carbon market mechanisms between our two regions.”

She also noted that their collaboration with ACMI provides buyers in the UAE and the wider region access to high-quality African carbon credits. As such, their mega deal will unlock the region’s carbon credit potential while supporting sustainable investment with long-term climate impact. 

On their end, the ACMI CEO, Paul Muthaura commented that the UICCA’s $450M pledge shows the potential of international cooperation to tackle climate change. 

He further noted that together, they “aim to create a sustainable, transparent, and equitable carbon market ecosystem in Africa”. This, in turn, can help drive a significant positive impact for the region and the world. 

The UAE alliance is not the only buyer with a keen interest in African carbon credits. 

Another company created by a royal family member of Dubai, Blue Carbon, also has inked agreements with African nations to manage a vast span of forests to produce carbon credits from their conservation and protection activities. The company will sell those offsets to countries looking to use carbon credits as a solution for their climate targets. 

Turning Africa As Hub for Climate Investments, Not Disasters

African nations find carbon credits and similar market-driven financial mechanisms are crucial tools to attract funding from richer countries. 

Currently, the ACMI’s Advance Market Signal manages to collect around $200 million for buying African carbon credits by 2030. Major signatories under the initiative are Vertree, Standard Chartered, ETG, and Nando’s, among others. 

Nigeria alone can generate over 30 million tons of carbon credit each year by the end of the decade. That means the African nation can produce over $500 million a year through the sales of carbon offsets. 

Organizers of the Africa Climate Summit aim to reposition the continent as a hub for climate-related funding and actions, instead of being known as a region plagued by climate disasters like droughts and floods. 

In summary, the UAE Carbon Alliance’s monumental $450 million pledge to purchase carbon credits from the ACMI signifies a powerful stride in the global fight against climate change. This landmark commitment bridges nations and regions, fostering international cooperation to create a sustainable and efficient carbon market ecosystem.

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Sunreef Yachts gave seafarers a better look at its revolutionary Zero Cat concept, a catamaran that sails on hydrogen and produces its own power. 

Sunreef Yachts is leading the market for semi-custom luxury catamarans while establishing itself as a key player in eco-friendly and sustainable yachting. The Polish yard first teased sailors with its hydrogen and solar powered catamaran last July. 

Carbon-Free Luxury Sailing

Yachts have long been the symbols of the luxurious lifestyle of the rich and wealthy. But as concerns about climate change continue to intensify, questions arise on how yachts impact the environment. 

A superyacht like the Zero Cat is usually defined as a privately owned vessel with at least 78 feet in length. And there are over 9,300 of these vessels sailing on the oceans that’s valued at more than $54 billion. 

Along with ships, superyachts contribute significantly to carbon dioxide emissions, which are often overlooked as they’re released at sea. 

According to industry data, a superyacht emits more than 7,000 tonnes of CO2 a year – considering it has a helicopter pad, pools, and submarines. To put that in perspective, the emission is over 1,500x more than how much a family car emits. 

With this data, maritime construction yards are also put under the spotlight by environmentalists to do something about their pollution. 

Sunreef acted fast by introducing its revolutionary superyacht concept – the Zero Cat. It just released the first renders of this highly awaited multihull. 

Zero Cat is a 90-footer yacht that is capable of producing its own fuel while sailing on the high seas for “unlimited autonomy.” It sports sleek and clean lines as common with Sunreef models but features a more sculpted stern. 

The concept yacht has stairways at the back of each hull, leaning toward the water, and a wraparound lounge at the outside helm. It also appears to have an alfresco lounge.

With this sleek superyacht design, Sunreef’s goal is to develop a sustainable sailing yacht with self-sufficient and unlimited range non-sail propulsion. 

At the heart of this zero-emission luxury catamaran is the green energy that sets it apart from other superyacht models. 

Zero-Emission and Safe Hydrogen Fuel Cell 

According to the yard, Zero Cat runs on an engine that uses a hydrogen fuel cell which powers the superyacht. It also comes with a reformer that can transform methanol into hydrogen.

Image source: Sunreef Yachts website

The fuel-cell system producing clean energy will electrically power the propulsion as well as the hotel load, Sunreef said. With this green technology, the catamaran will generate no carbon emissions and oxides.

Without an engine powered by burning oil, the superyacht will also sail with little noise and vibrations for a quiet and smooth ride. 

What’s more unique about Zero Cat is its ability to create additional green energy through its hydro generators and solar cells, which Sunreef refers to as a “solar skin”. 

The solar skin is not unique to the concept yacht but has been on Sunreef’s other models. It’s wrapped around the superyacht’s bodywork and can continuously produce solar energy so long as the sun shines. 

There’s also a bonus in sailing with Zero Cat: no need for high-pressure hydrogen storage on board. It means yachting would be safe, as opposed to the hydrogen stigma created by the 1937 Hindenburg crash.

And that stigma seems to be erased now that hydrogen fuel cells are hitting the market big time. 

Not only is the hydrogen-powered system getting attention in maritime but is also gaining traction in road fleets.

A leading company focusing on zero-emission vehicles, First Hydrogen Corp., shocked the market with its unbeatable fuel-cell EV (FCEV) trial results. The company’s FCEV vans trial with SSE Plc cleared 630km of range, almost double that of traditional EVs. The hydrogen vehicles also boast a 5-minute refuel time, similar to gas-powered vehicles. 

With its massive success in the first trial, First Hydrogen will open up fleet trials to additional commercial opportunities. This is in response to growing interests from parcel delivery or logistics companies wanting First Hydrogen’s FCEV for express deliveries. These operation trials will start soon late Qtr 3 and Qtr 4 this year. 

The demand for zero-emission vehicles and vessels has started to spike as governments and companies worldwide are racing to net zero emissions. And hydrogen fuel cells offer a promising solution for a cleaner and greener power source.

Sunreef Yachts still has a lot to do before its Zero Cat concept becomes a real superyacht sustainably sailing. But by combining hydrogen energy and other renewable power sources on board the yacht, it holds the promise for a luxurious but carbon-free getaway on the sea.

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned: FHYD

Carboncredits.com receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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Europe’s biggest oil major, Shell PLC, secretly ditched its plan to spend $100 million a year on carbon credits, which is the largest offset program among corporations, after 6 months its new chief executive officer Wael Sawan took office.

In June, Sawan announced a major shift in Shell’s strategy – to maintain its current level of oil production until 2030, not to reduce it as initially declared, while reducing costs and increasing shareholders profits. 

What the CEO missed to reveal at the time is the energy giant’s plans for investing in carbon credit projects. These credits are part of Shell’s offsetting program in line with its 2050 net zero emissions goal. 

Finding Carbon Offsets that Meet Quality Standards

Shell has made a commitment to cut Scope 1 and 2 emissions by 50% by 2030 and reach net zero by 2050. It managed to reduce total emissions from all scopes (Scope 1, 2, and 3) in 2022 compared to 2016 levels. 

At a glance, here’s Shell’s climate target summary with actual achievements in 2022. 

A big part of the oil major’s carbon reduction strategy is the use of carbon credits to offset emissions. 

Originally, Shell aimed at spending $100 million each year on carbon offsets. The oil company also targeted to generate 120 million carbon credits yearly by 2030 from natural carbon sequestration projects. These targets would have offset about 10% of Shell’s carbon emissions.  

But with the company’s recent revelation, they confirmed that they’re putting an end to those plans. However, the company hasn’t revealed publicly any new plans for carbon credits or how they now intend to meet their climate targets. 

According to Shell, those prior goals weren’t attainable due to the lack of carbon offsets that meet its quality standards. 

Carbon offsets from nature-based projects were criticized for not delivering the environmental benefits they promised to bring. 

Shell’s previous intent to build a robust pipeline of carbon credits was inspired by research saying that nature-based sequestration can suck in enough carbon to limit global temperature rise. This finding and the growing pressure for corporations to reduce their carbon emissions prompted Shell to consider carbon offsets.

Meanwhile, other large companies and Shell’s oil major peers are also relying on carbon credits to offset their unabated emissions. Estimates show that the voluntary carbon market can hit $950 billion by 2037, a whopping increase from today’s $2B value.

But the Royal Dutch oil giant has been struggling to find carbon offsets that meet its stringent quality requirements. 

As per Flora Ji, a veteran handling the firm’s nature-based solutions (NBS), the market didn’t put high regard to quality before. She further said that: 

“The quality, integrity and responsible use of credits: these are the prerequisites to the credibility and sustainability of the carbon markets.”

Recently, key carbon standard organizations have published a fundamental framework that defines high-quality carbon credits.

Hitting Shell’s Net Zero Target

Shell is known to employ strict standards when it comes to developing and investing in nature-based climate solutions. The oil major has been supporting diverse NBS initiatives from reducing deforestation to tree planting to grasslands projects. 

While Shell is a large supporter of carbon offsets, it’s not the only major player in the field. Other oil giants have also started to develop their own carbon credit projects and pipelines. Chevron, TotalEnergies, BP, Equinor, and Eni are some of the major companies investing in carbon offset credits. 

However, it’s not clear if they will follow the same offsetting scale that Shell originally planned. 

In comparison, French oil major TotalEnergies was able to earn less than 7 million credits last year. The company seeks to generate 45 million carbon credits by the end of the decade. That’s only about ⅓ of Shell’s obsolete offsets target. 

Despite the move to ditch its carbon offsets goal, Shell remains committed to its net zero emissions target. In fact, the company’s spokesman remarked that their “sustainability and climate targets remain”.

As what Ji has also confirmed, Shell’s long-term approach to carbon reduction toward net zero follows the Science-Based Targets initiative. That means avoiding emissions first and reducing them before resorting to carbon offsets. 

If Shell stays loyal to its net zero pledge, it will still need carbon offsets eventually, according to BloombergNEF analysis. The Dutch energy giant will be needing the offset credits for the residual emissions on its way to net zero.

Indeed, Shell is not totally abandoning its carbon offset efforts; only the $100M and 120M credit targets. Ji noted that the oil major may buy carbon credits from the VCM to increase its stocks of offsets. 

And though it’s prioritizing its short-term goal of maximizing profits, it has yet to disclose new plans for its long-term climate targets. 

This revealing news leaves a major question to many – what comes next for Shell’s carbon emission reduction strategy? Will it pivot to technological carbon removal instead? That’s what speculators have to watch out for.  

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