Introduction: The New Energy Dawn
Amid global geopolitical and geoeconomic turbulence, the momentum towards a low-carbon energy future appears to have slowed. This is particularly evident in the hydrogen sector. The initial enthusiasm for hydrogen as a potential ‘silver bullet’ [1] of the energy transition has, in many Western industrialised countries, given way to growing scepticism and caution. The United States increasingly distances itself from ambitious climate and clean energy policies, while Europe faces economic pressures that sideline hydrogen development.
This slowdown in the West does not tell the whole story, however. Outside of Europe and the United States, key countries are doubling down on their hydrogen ambitions. For example, in mid-October 2025, China reaffirmed its commitment to green hydrogen, reinforcing its position in what is already the world’s largest hydrogen market, with implications for global energy dynamics.[2] Similar trends are emerging across Asia, Latin America, Africa, and the Middle East, where hydrogen is gradually gaining traction.
Within this context, the Gulf Cooperation Council (GCC) states are positioning themselves as future hydrogen superpowers. As Figure 1 (below) demonstrates, Saudi Arabia, the United Arab Emirates (UAE), Oman, and to a much lesser extent Qatar have announced hydrogen projects valued at several billions of dollars, leveraging abundant renewable energy resources, existing hydrocarbon infrastructure, and vast financial reserves to capture what they anticipate will be a transformative export market.[3] These ambitions are largely orchestrated through the Gulf’s sovereign wealth funds (SWFs), which have evolved into strategic instruments of national industrial policy.
The Public Investment Fund (PIF) in Saudi Arabia, Mubadala Investment Company in the UAE, the Oman Investment Authority (OIA), and the Qatar Investment Authority (QIA) are deploying capital on an unprecedented scale to establish their countries as central players in the emerging hydrogen economy. By taking equity stakes in electrolyser manufacturers[4], forming partnerships with international energy firms, and building large-scale production facilities, these SWFs are doing far more than diversifying investment portfolios. They are actively shaping national energy strategies and consolidating control over the core institutions driving the transition. In practice, these funds stand behind most of the region’s ‘national champions’ of the energy transition. SWF-funded firms such as ACWA Power (Saudi Arabia), Masdar, and TAQA (both UAE) serve as operational arms for large-scale renewable and hydrogen projects domestically and abroad.[5] Through these vehicles, SWFs link state capital, global finance, and industrial strategy in several ways: they channel public wealth into strategic sectors, attract international co-investment, and shape the direction of technological development by selecting which firms and projects receive long-term capital. By coordinating these investments with national policy targets and industrial planning, they ensure that emerging low-carbon sectors remain embedded in state-led developmental frameworks rather than left to market forces alone.
Please refer to Figure 1 in the PDF file.
This chart (Figure 1) represents the distribution of green hydrogen project investments or capacity across major global regions. Despite representing only three countries with relatively small populations, the Gulf Cooperation Council (GCC) states of Saudi Arabia, the UAE, and Oman emerge as the dominant investors in green hydrogen development within the Middle East region, significantly outpacing major industrialised economies such as Japan and South Korea in Asia. This concentration of capital and commitment underscores the strategic importance these Gulf nations place on positioning themselves as global leaders in the hydrogen economy.[6]
Collectively, these institutions embody a state-capital nexus that characterises the Gulf states’ approach to the energy transition: instead of dismantling the fossil-fuel political economy, they extend it into renewable and hydrogen sectors by taking ownership stakes in core technologies, controlling large-scale production assets, and seeking to lock in long-term offtake and export agreements. In doing so, they secure new rent streams, deepen international partnerships, and reinforce their geopolitical influence. The guiding logic is clear: just as the Gulf states supplied the world with oil for the past century, they now aim to remain trusted global energy suppliers for the hundred years ahead, this time through hydrogen, renewables, and clean molecules.
This policy brief contends that Gulf SWFs are not merely financial vehicles but strategic tools enabling these states to maintain energy dominance under a post-carbon paradigm. Rather than retreating from energy markets, Gulf capital is advancing into hydrogen with the same ambition and scale that characterised GCC states’ twentieth-century oil investments. Yet, this transition carries significant risks. The proliferation of competing national megaprojects, uncertainties in offtake agreements, and the still-nascent global hydrogen market create conditions that could yield either transformative success or costly setbacks. Failures or significant delays would have important fiscal and political implications, especially as several flagship projects are already being scaled back and Gulf states face increasing pressure to demonstrate tangible returns from large-scale investments on economic diversification.
A New Clean Energy Cartel? Gulf Sovereign Funds and Hydrogen
Over the past two decades, Gulf-based SWFs have evolved from fiscal stabilisers buffering commodity price volatility into strategic instruments of economic, technological, and geopolitical influence. They now collectively manage several trillion dollars of assets[7], strategically deploying them to shape industrial policy and global energy markets. This strategic shift stems from an awareness amongst the Gulf states that their long-term relevance depends on adapting to declining fossil fuel demand by diversifying their economies. Accordingly, ambitious agendas like Saudi Arabia’s Vision 2030 or Oman’s Vision 2040 frame the wholesale restructuring of the national economy around private-sector, oil-adjacent growth as essential for survival.
Investments in hydrogen exemplify this change in thinking. Hydrogen offers a rare convergence of existing strengths and new opportunities for the Gulf. Blue hydrogen, which is produced from natural gas, with the resulting CO₂ being captured and stored, draws directly on the region’s extensive gas reserves and long-standing expertise in gas processing. Green hydrogen, by contrast, is produced by splitting water using renewable electricity; here, the Gulf’s exceptional solar and wind resources allow for highly competitive production at scale.
Hydrogen therefore does not represent a radical break with the past. Instead, it builds on – and extends – the Gulf’s established energy infrastructure and industrial capabilities. Existing gas processing facilities, ammonia plants, port infrastructure, and large-scale engineering capacity can be adapted for hydrogen and ammonia production and export. Strategically, hydrogen allows the Gulf states to position themselves as constructive actors in the global energy transition, projecting climate credibility while reinforcing the underlying logic of their political-economic model.
Yet hydrogen remains largely aspirational. Global low-carbon hydrogen output is still measured in hundreds of thousands of tonnes, orders of magnitude below the millions needed to meet import ambitions. Electrolysis technology is only now becoming mature enough to sustain large, commercially viable plants rather than small pilot projects. Moreover, transport logistics, whether through shipping hydrogen in the form of ammonia (a chemical carrier that can be transported more easily than hydrogen itself) or dedicated pipelines, are still at an early stage and not yet deployed at scale. Massive SWF investments thus aim not only to scale production but also to shape emerging hydrogen markets, secure first-mover advantages, and anchor the Gulf states in nascent supply chains.
The strategy is not without risk. Saudi Arabia, the UAE, and Oman have set collective production targets that exceed near-term global demand projections. Rather than coordinated supply management, this could result in competitive overproduction, potentially depressing returns and undermining the economic rationale for investment. Whether Gulf SWFs act collaboratively or competitively will significantly influence the evolution of the global hydrogen sector.
The Hydrogen Quartet: Four Strategies, Three and a Half Vision(s)
A closer examination of the Gulf states reveals four distinct national approaches to hydrogen development. Saudi Arabia, the United Arab Emirates, and Oman have each articulated relatively clear strategic visions that position blue and green hydrogen as pillars of long-term economic diversification and future energy exports. Their respective SWFs play a leading role in financing large-scale projects, securing technology partnerships, and building international value chains around this emerging industry. Qatar, by contrast, has adopted a more cautious approach. Rather than committing significant capital to an early hydrogen push, the country continues to prioritise its dominant position in liquefied natural gas (LNG), framing natural gas as a transitional fuel in the global decarbonisation process. This strategy reflects a preference for consolidating existing comparative advantages before investing heavily in a still nascent and uncertain hydrogen market.
Saudi Arabia – The Public Investment Fund
Saudi Arabia's hydrogen ambitions are inseparable from Crown Prince Mohammed bin Salman's Vision 2030, and the Public Investment Fund (PIF) serves as the primary vehicle for realising these goals. The Kingdom’s largest SWF, the PIF espouses a hydrogen strategy that revolves primarily around NEOM, the futuristic megaproject in the country’s northwest. Though many elements of the project have either been altered or scrapped altogether – exemplified by the gradual shortening of the planned linear city The Line from 170 kilometres to 2.4 kilometres to zero – plans to build what aims to be the world’s largest green hydrogen plant continue unabated. The project is a joint venture between NEOM, ACWA Power, and the US company Air Products. It integrates large-scale solar and wind generation with advanced electrolysis technology from the German firm Thyssenkrupp to produce green hydrogen that will be converted into ammonia for export under a long-term offtake agreement with Air Products.[8] Construction reached 80% completion in 2024, with commissioning expected by the end of 2026. In February 2026, ACWA Power, EnBW, VNG, and the Port of Rostock also signed memoranda of understanding to develop a supply chain for green ammonia as a hydrogen carrier.
Beyond NEOM, the PIF initially announced plans to invest 10 billion USD in hydrogen production through a joint venture with the state oil company, Saudi Aramco, called the Energy Solutions Company (ESC). The initiative intended to position ESC as the leading actor in Saudi Arabia’s emerging hydrogen sector, particularly through large-scale blue hydrogen production in cooperation with the national oil giant. However, recent developments indicate that the project has been put on hold, and that ACWA Power is now expected to assume the central role in driving the country’s hydrogen strategy forward.[9]
That the Kingdom has by no means abandoned its ambitions to become a new energy superpower through hydrogen is also evident from its numerous international partnerships aimed at securing a position across the entire hydrogen value chain. Memoranda of Understanding (MoUs) with France's ENGIE, Japan's Marubeni and JERA, South Korea's POSCO (in which the PIF has a 38% stake), and Samsung C&T outline frameworks for joint development of hydrogen projects and feasibility studies for production and export.[10]
The PIF's approach reflects assertive vertical integration. By controlling production through NEOM and ACWA Power, securing technology partnerships with international leaders, and maintaining equity stakes across the value chain, PIF aims to position Saudi Arabia as the dominant hydrogen exporter by the 2030s. Yet, fundamental questions remain regarding both the robustness of future demand and the Kingdom’s genuine commitment to hydrogen as a central pillar of its energy transition, especially as both green and blue hydrogen pathways are currently under evaluation, with blue hydrogen appearing more feasible in the near term due to cost, infrastructure, and resource considerations.
Please refer to Table 1 in the PDF file.
This table (Table 1) provides a comparative overview of the SWFs driving energy transition strategies in the Gulf. It outlines the key investment vehicles and national champions through which Saudi Arabia, the UAE, Oman, and Qatar channel capital into renewables and green hydrogen. The table shows how these states have embedded energy transition priorities into dedicated institutional mechanisms. Together, these structures reveal the deliberate positioning of the Gulf states as emerging actors in the global hydrogen economy.
United Arab Emirates – Mubadala Investment Company
The UAE's hydrogen strategy is coordinated through the Abu Dhabi Hydrogen Alliance, formed in 2022 by Mubadala, the Abu Dhabi National Oil Company (ADNOC), and Abu Dhabi Developmental Holding Company (ADQ). This alliance consolidates the renewable energy and green hydrogen efforts of TAQA, ADNOC, and Mubadala, mostly through its ‘national champion’ Masdar, which is jointly owned by the three, with each holding a 33% stake (see Table 1). Moreover, Mubadala holds a uniform 33% stake across both Masdar's renewable energy and green hydrogen subsidiaries. Further leadership roles are strategically divided, with TAQA holding a 43% controlling stake in the renewables business and ADNOC holding a 43% controlling stake in green hydrogen, with each holding 24% in the respective other's primary business. Masdar City, fully owned by Mubadala (see Table 1), in turn, serves as a dedicated infrastructure site for green hydrogen initiatives, most notably the Siemens Energy demonstrator plant, which produces hydrogen for sustainable transport within the city.
Masdar’s dual engagement in renewable power generation and hydrogen production positions it as the UAE’s flagship entity for advancing a comprehensive clean energy strategy. This domestic role is reinforced by Mubadala, which extends the UAE’s presence across key segments of the global energy transition. The SWF has entered into numerous MoUs with both domestic and foreign partners to accelerate technological collaboration and market access. Projects being developed through international consortia involve partners such as Siemens Energy, Lufthansa, and several UAE-based companies.[11] Further cooperations include MoUs with Italy's Snam to explore hydrogen development opportunities and with France's Lhyfe to examine large-scale green hydrogen production in Europe.[12] Additionally, Mubadala holds a partial stake in Spain's Cepsa, which is developing a Green Hydrogen Valley in Andalusia along with sustainable aviation fuels and biofuels. This investment embeds Mubadala directly in European hydrogen infrastructure, providing it with both market intelligence and strategic positioning within the continent's emerging hydrogen ecosystem.[13] Meanwhile, Masdar signed an agreement with OMV, Austria’s integrated chemicals, fuels, and energy company, to collaborate on the production of green hydrogen and sustainable aviation fuels (SAF).[14] Furthermore, in 2023, Masdar signed an agreement with four Dutch companies (Port of Amsterdam, SkyNRG, Evos Amsterdam, and Zenith Energy) to explore developing a green hydrogen supply chain between Abu Dhabi and Amsterdam. The memorandum outlines hydrogen applications in SAF, steelmaking, shipping, and broader offtake opportunities. Masdar has also partnered with Germany's Uniper to develop a 1.3-gigawatt, solar-powered green hydrogen plant in the UAE, with expected production beginning in 2026 and the EU identified as a key export destination.[15]
The UAE's approach is characterised by partnership orientation and technology integration. Rather than pursuing megaprojects in isolation, Mubadala, its subsidiary Masdar, and other energy giants such as TAQA and ADNOC are systematically building relationships across the entire hydrogen value chain, from electrolyser manufacturing and port infrastructure to the practical end-use of hydrogen for transport, industrial production, and power generation. In contrast to Saudi Arabia’s strategy, which concentrates hydrogen development in large domestic flagship projects such as NEOM, the UAE’s approach appears less anchored to large-scale hydrogen hubs within the country’s national territory. Instead, Abu Dhabi emphasises international partnerships and investments across multiple locations abroad, targeting specific sectoral applications of hydrogen. Here, Emirati SWFs do not hesitate to lean on partnerships with foreign companies, as consortia with Lufthansa and OMV to supply SAF and other mobility-related products demonstrate.
Oman – Oman Investment Authority
Oman's hydrogen strategy represents perhaps the most technologically sophisticated approach among the Gulf states. The Oman Investment Authority (OIA) has concentrated investments on upstream capabilities, particularly electrolyser manufacturing, positioning the Sultanate as a technology provider rather than merely a hydrogen producer. In 2023, OIA announced an investment in Massachusetts-based Electric Hydrogen, a company manufacturing the world's most powerful electrolysers designed to deliver low-cost green hydrogen. These 100-megawatt systems can produce approximately 50 tonnes of green hydrogen daily.[16] Critically, OIA and Electric Hydrogen signed a strategic cooperation agreement to establish green hydrogen production projects in Oman, including local manufacturing of electrolysers to meet growing domestic demand. This technology transfer arrangement could position Oman as a regional hub for electrolyser production, reducing dependence on European and Chinese suppliers whilst building domestic industrial capabilities.
Complementing this investment, Hydrom, Oman’s hydrogen development company and a subsidiary of the state-owned company Energy Development Oman – as opposed to the Sultanate’s SWF – signed an agreement with Siemens Energy to explore the establishment of electrolyser manufacturing facilities in the country.[17] In this instance, OIA acted as a facilitator, rather than direct signatory, highlighting its dual role in the Omani hydrogen political-economy as a strategic downstream investor and market shaper across the value chain. The SWF’s simultaneous self-positioning as state investor and foreign-investment facilitator translates into mobilising funds for foreign technology partnerships that advance supply-chain localisation and attract capital from abroad. This approach contrasts with the more direct operational dominance exercised by Saudi Arabia’s Public Investment Fund or the UAE’s Mubadala. In addition, OIA has organised workshops on electrolysis technologies together with Electric Hydrogen, aimed at reducing the costs of green hydrogen projects and strengthening Oman’s technological competitiveness in the sector.
Oman's broader hydrogen strategy targets production of eight million tonnes annually by 2050, a goal requiring potentially thousands of large-scale electrolyser systems.[18] By cultivating partnerships with leading manufacturers while simultaneously developing local production capabilities, OIA seeks to address critical domestic and international supply chain constraints while fostering high-value industrial employment within in the Sultanate. In combination with Hydrom’s role as the central coordinating body for hydrogen infrastructure development – overseeing partnerships, investment coordination, and the regulatory framework for projects, including licensing approvals, safety and environmental standards, and compliance monitoring – Oman emerges as the country pursuing the most institutionally mature hydrogen strategy in the region.[19] Though these developments present a highly promising picture on paper, Oman continues to face significant challenges in securing offtake agreements in Europe, leaving it trailing behind its Gulf peers in translating strategic ambition and institutional maturity into tangible export revenues.
Qatar – Qatar Investment Authority
Qatar presents a notable outlier in Gulf hydrogen strategies. Despite being the world's largest liquified natural gas exporter and possessing substantial financial resources through the Qatar Investment Authority (QIA), the emirate has maintained a conspicuously low profile in hydrogen development compared to its neighbours. QIA's publicly disclosed hydrogen investments are minimal, with no major equity stakes in electrolyser manufacturers, production facilities, or dedicated hydrogen partnerships announced.
Qatar's reticence likely reflects several factors. First, the emirate's massive investments in expanding LNG export capacity to meet European demand following Russia's invasion of Ukraine may be absorbing available capital and strategic attention. Second, Qatar's comparative advantage lies firmly in natural gas rather than renewable energy; the country lacks the solar and wind resources of Saudi Arabia, the UAE, and Oman, limiting its competitiveness in green hydrogen production.[20] Third, QIA's investment strategy has historically emphasised financial returns and portfolio diversification across sectors and geographies rather than strategic positioning in specific industries. Qatar's strategy thus appears more cautious and financially driven than the assertive industrial policies of Saudi Arabia and the UAE.[21] Whether this reflects deliberate restraint remains unclear, but for now, QIA remains notably absent from the Gulf's hydrogen race.
EU-Gulf Dynamics: The New Energy Entanglement
Despite growing scepticism in parts of Europe regarding the hydrogen economy and large-scale imports of what some have dubbed the “champagne of energy”[22], the foundations of a hydrogen partnership between the EU and the Arabian Peninsula are already in place. Brussels’ REPowerEU plan, adopted after Russia’s invasion of Ukraine, envisions covering roughly half of projected hydrogen demand through imports, prompting intensive diplomatic outreach to potential suppliers.[23] This political momentum builds on a dense web of commercial relations between Gulf entities and European energy companies.[24] SWFs, often acting through state-owned enterprises, have strategically positioned themselves within European energy markets, reinforcing these emerging ties. Initiatives such as the EU-GCC Clean Energy Technology Network[25], Germany’s H2-diplo Initiative[26], or the private H2Global Foundation[27] further institutionalise cooperation. H2Global, for instance, operates as a market-based instrument to accelerate international hydrogen trade by organising double-auction mechanisms: it contracts long-term purchase agreements for green hydrogen and its derivatives abroad and resells them in Europe to bridge the price gap between production and market levels.
Yet, the emerging EU-Gulf hydrogen architecture faces growing friction. On the Gulf side, impatience has surfaced over the lack of binding offtake agreements, which are essential to secure financing for multi-billion-dollar projects. Producers require long-term purchase guarantees, while European buyers hesitate to commit amidst uncertainty over future hydrogen prices, evolving technologies, and certification standards – a classic ‘chicken-and-egg‘ dilemma that pervades the global market.
Regulatory uncertainty in Europe compounds this hesitation. The implementation of the Carbon Border Adjustment Mechanism (CBAM) – requiring importers of carbon-intensive goods, including hydrogen, to purchase emissions certificates – aims to prevent carbon leakage, meaning the relocation of production to countries with weaker climate regulations that would shift emissions abroad rather than reduce them globally. However, the ’Omnibus’ budget negotiations in Brussels, delayed by adjustments to CBAM’s rollout and ultimately approved in February 2026, have generated unease among external partners, and influenced their hydrogen investment decisions. With CBAM in mind, for instance, Oman has focused predominantly on green hydrogen production to avoid potential disadvantages for blue hydrogen exports under strict EU carbon accounting rules.
Infrastructure remains a significant, though secondary, constraint. While proposals such as the SoutH2 Corridor – a planned 3,300-kilometre pipeline linking North Africa with Central Europe – highlight Europe’s commitment to building hydrogen infrastructure[xxviii], they are unlikely to encompass Gulf supply in the near term. Maritime transport of green ammonia, produced by combining hydrogen with nitrogen, currently appears the most viable option for Gulf-European trade. Yet, limited ammonia-cracking[29] capacity in Europe and energy losses during conversion and reconversion reduce overall competitiveness.
These challenges underscore the fragility of the EU-Gulf hydrogen partnership. Political declarations and investment pledges abound, but the material and commercial architecture required to operationalise transcontinental hydrogen trade remains largely untested. Whether European regulators and Gulf investors can bridge this implementation gap will determine if the envisioned energy partnership becomes a tangible reality or remains a strategic aspiration.
Conclusion and Future Outlook: Trajectories for Success and Failure
Gulf SWFs have become pivotal actors in the emerging hydrogen economy, deploying vast capital to secure their countries’ positions as energy suppliers in a decarbonising world. Through investments in production facilities, technology ventures, and partnerships with European firms, PIF, Mubadala, and OIA seek to reproduce in clean energy the strategic influence once achieved through oil. While the sector is still in development and highly dynamic, it is possible to identify broadly similar hydrogen pathways accompanied by distinct roles for each SWF across the Gulf states: The PIF is pursuing ambitious, vertically integrated megaprojects anchored in Saudi territory; Mubadala emphasizes partnerships and technology integration across domestic and international value chains; and OIA focuses on upstream capabilities, technology transfer, and enabling foreign investment in the Sultanate of Oman. Their ambitions reach beyond economic returns: they aim to sustain geopolitical relevance, export revenues, and global reputations in a post-carbon order. Yet the road ahead is uncertain. Competing national megaprojects such as Saudi Arabia’s NEOM hydrogen hub, the UAE’s Al Dhafra solar-to-hydrogen initiative, and Oman’s green hydrogen facilities in Duqm and Dhofar risk creating oversupply in markets that remain nascent and fragmented. The absence of binding offtake agreements exposes producers to demand-side risk as buyers hesitate amidst volatile prices, evolving technology, and regulatory uncertainty.
Three conditions will ultimately determine the success or failure of Gulf hydrogen strategies. These are:
- Technological maturity and cost reduction. Electrolyser prices must fall sharply, renewable power remain affordable, and transport options become commercially viable.
- Market creation. European industries must adopt hydrogen at scale, supported by binding policy incentives and viable business models in relevant sectors including steel, chemicals, aviation, and shipping.
- Regional coordination. Whether Gulf states collaborate or compete will shape both profitability and market stability.
Concerning the third condition, two broad trajectories illustrate possible futures:
- Coordinated Integration: In this scenario, Gulf producers align their strategies through informal coordination or a regional hydrogen council. Production targets are harmonised, market segments differentiated, and European buyers approached collectively, primarily for green hydrogen, though blue hydrogen may be exported initially or used as a backup. Simultaneously, the Gulf states supply Asian markets primarily with blue hydrogen – after all, countries like Japan and South Korea have welcomed all colours of the molecule from the beginning. Such a division of labour could secure stable revenues, strengthen diplomatic influence, and supply the West and the East equally.
- Competitive Fragmentation: Alternatively, rivalry among Gulf producers could trigger simultaneous capacity expansions, triggering oversupply and collapsing prices. Instead of a unified strategy, states might succumb to a divide et impera approach, competing to sell hydrogen at the lowest cost to buyers seeking to exploit fissures between Gulf suppliers. This scenario could risk undermining the region’s long-term hydrogen industry, eroding profitability, deterring investors, and delaying market consolidation. Europe, perceiving instability, could diversify toward North Africa, Latin America, or Australia, further weakening Gulf influence and prolonging uncertainty in the hydrogen market.
A middle path – consisting of pragmatic cooperation and moderated competition – appears most realistic. Despite the regional precedent of OPEC, hydrogen suppliers are unlikely to reproduce the formal cartel structures formed to influence the oil market. Nevertheless, dialogue and coordination through bilateral channels and participation in European hydrogen platforms could prevent destructive rivalry while preserving national flexibility.
Policy implications follow from these dynamics. For the Gulf states, coordination of investment portfolios and technological specialisation are essential to avoid redundancies and exploit complementarities, including Saudi Arabia’s production scale, the UAE’s renewable and technological expertise, and Oman’s centralisation of institutional and regulatory structures across the hydrogen value chain through Hydrom. Strengthening environmental, social, and governance (ESG) standards within SWFs would also enhance credibility with European investors and regulators. Finally, restraining intra-GCC competition is critical for the bloc’s hydrogen producers to maintain bargaining power with buyers.
For Europe, engagement should combine diversification with cooperation. Policymakers should design CBAM and hydrogen certification rules that reward genuine decarbonisation while keeping access to European markets open. Co-investment in technological localisation and skills development in the Gulf could foster mutual dependence and strengthen long-term partnerships. At the same time, Europe must send clear signals – through secured offtake agreements, long-term contracts, and predictable regulatory frameworks – to give Gulf investors the certainty they need to build and operate large-scale hydrogen projects. The hydrogen transition offers the Gulf both opportunities and risks. Managed strategically, hydrogen could extend the region’s energy centrality into the post-fossil era. Mismanaged, it could yield stranded assets and lost influence. Gulf SWFs, as the main vehicles of this transformation, will determine which outcome prevails.
Endnotes
[1] Zumbraegel, Tobias 2025: The Technopolitics of Hydrogen: Arab Gulf States’ Pursuit of Significance in a Climate-Constrained World, in: Geoforum 158:104168.
[2] Kaufmann, Alexander 2025: China moves to supercharge green hydrogen as US pulls back, Canary Media, 28.10.2025, in: https://www.canarymedia.com/articles/hydrogen/china-policy-boost-green-industry [30.11.2025].
[3] Ansari, Dawud 2022: The Hydrogen Ambitions of the Gulf States – Achieving Economic Diversification While Maintaining Power, Stiftung Wissenschaft und Politik (SWP) Comment 07/2023, p. 1, in: https://www.swp-berlin.org/10.18449/2022C44/ [24.03.2026]; Al-Sarihi, Aisha 2022: Gulf States Hedge Against Global Energy Transition, Now With Hydrogen, Arab Gulf States Institute, in: https://agsiw.org/gulf-states-hedge-against-global-energy-transition-now-with-hydrogen/ [30.11.2025]; Koch, Natalie 2022: Gulf Hydrogen Horizons. Why Are Gulf Oil and Gas Producers so Keen on Hydrogen?, Institute for Advanced Sustainability Studies, in: https://publications.iass-potsdam.de/rest/items/item_6002525_1/component/file_6002526/content; Zumbraegel 2025, N. 1.
[4] Electrolyser manufacturers are crucial because electrolysers are the core technology required to convert renewable electricity into hydrogen, making them indispensable for the production of green hydrogen. Securing influence over this market segment means gaining leverage over production costs, technological standards, supply chains, and ultimately the scalability of hydrogen itself.
[5] Al-Sulayman, Faris 2021: The Rise of Renewables in the Gulf States: Is the ‘Rentier Effect’ Still Holding Back the Energy Transition?, in: Mills, Robin / Sim, Li-Chen (eds.): Low Carbon Energy in the Middle East and North Africa, London, pp. 93-119; Zumbraegel, Tobias 2022: Political Power and Environmental Sustainability in Gulf Monarchies, Singapore.
[6] Hydrogen Council/McKinsey & Company 2025: Global Hydrogen Compass 2025: Industry progress and lessons learned from the first wave of mature clean hydrogen projects, 09/2025, p. 9 in: https://compass.hydrogencouncil.com/?attachment_id=6172 [30.11.2025].
[7] Amar, Jeanne/Lecourt, Christelle/Carpantier, Jean-Francois 2022: GCC Sovereign Wealth Funds: Why Do They Take Control?, in: Journal of International Financial Markets, Institutions and Money 77:101494.
[8] Ansari 2022, N. 3, pp. 3-4.
[9] Silverstein, Ken 2024: The Saudis Eye Hydrogen And A New Energy Superpower Status, Forbes, 04.11.2024, in: https://www.forbes.com/sites/kensilverstein/2024/11/04/the-saudis-eye-hydrogen-and-a-new-energy-superpower-status/ [01.12.2025]; Pöhlmann, Hans Peter 2025: Entwicklung vieler Wasserstoffprojekte in Saudi-Arabien ungewiss, Germany Trade & Invest, 30.01.2025, in: https://www.gtai.de/de/trade/saudi-arabien/branchen/entwicklung-vieler-wasserstoffprojekte-in-saudi-arabien-ungewiss-1007526 [01.12.2025].
[10] Zumbraegel 2025, N. 1, p.7; Marubeni Corporation 2023: Memorandum of Understanding with PIF for the Development of a Clean Hydrogen Project in Saudi Arabia, 01.03.2023, in: https://www.marubeni.com/en/news/2023/release/00026.html [01.12.2025]; Jera 2023: JERA and PIF Sign an MOU for the Development of Green Hydrogen Projects and Derivates, 20.07.2023, in: https://www.jera.co.jp/en/news/information/20230720_1568 [01.12.2025]; ZAWYA 2023: ENGIE and PIF sign MoU to jointly develop Hydrogen projects in Saudi Arabia,13.07.2023, in: https://www.zawya.com/en/press-release/companies-news/engie-and-pif-sign-mou-to-jointly-develop-hydrogen-projects-in-saudi-arabia-sfa6hiek [01.12.2025]; Asharq Al-Awsat 2022: Saudi PIF Signs MoU to Develop Green Hydrogen Production, 19.01.2022, in: https://english.aawsat.com/home/article/3423091/saudi-pif-signs-mou-develop-green-hydrogen-production [01.12.2025].
[11] Ansari 2022, N. 3, p. 4.
[12] Bianco, Cinzia 2023: Renewable Relations: A Strategic Approach to European Energy Cooperation with the Gulf States, European Council on Foreign Relations, 16.06.2023, in: https://ecfr.eu/publication/renewable-relations-a-strategic-approach-to-european-energy-cooperation-with-the-gulf-states/?amp [01.12.2025]; Čučuk, Aida 2025: Masdar and Lhyfe Partner up for Large-scale Hydrogen Projects in Europe, Offshore Energy, 17.01.2025, in: https://www.offshore-energy.biz/masdar-and-lhyfe-partner-up-for-large-scale-hydrogen-projects-in-europe/ [01.12.2025].
[13] Mubadala 2023: Investing in Global Solutions – 2022 Annual Review, p.32, in: https://annual2022.mubadala.com/-/media/project/Mubadala/Mubadala%202022/Home/PDF/Mubadala%20Annual%20Review%202022%20English.pdf [01.12.2025].
[14] OMV 2025: Masdar and OMV Advance Partnership on Green Hydrogen Development, 30.04.2025, in: https://www.omv.com/en/media/press-releases/2025/250430-masdar-and-omv-advance-partnership-on-green-hydrogen-development [01.12.2025].
[15] Zumbraegel 2025, N. 1, p.7; Paunoska, Aneta 2022: Uniper needs to work with Masdar on the hydrogen project, renewable.news, 22.12.2022, in: https://www.renewable.news/energy-transition/uniper-needs-to-work-with-masdar-on-the-hydrogen-project/ [01.12.2025].
[16] Prabhu, Conrad, 2024: OIA to localize manufacture of electrolysers in Oman, Omanobserver, 27.05.2024, in: https://www.omanobserver.om/article/1154289/business/energy/oia-to-localise-manufacture-of-electrolysers-in-oman [01.12.2025]; Times News Service 2023: OIA invests in American company Electric Hydrogen, Times of Oman, 07.10.2023, in: https://timesofoman.com/article/136933-oia-invests-in-american-company-electric-hydrogen [01.12.2025].
[17] Zumbraegel 2025, N. 1, p.7; Prabhu 2024, N. 16; Muscat Daily 2023: 3 agreements inked to boost hydrogen economy, 12.12.2023, in: https://www.muscatdaily.com/2023/12/12/3-agreements-inked-to-boost-hydrogen-economy/ [01.12.2025].
[18] Ansari, Dawud 2023: Omani Hydrogen for Germany and the EU: Not Just a Matter of Energy Policy, Stiftung Wissenschaft und Politik (SWP) Comment 03/2023, p.3, in: https://doi.org/10.18449/2023C18 [01.12.2025].
[19] Ansari 2023, N. 18, p.7.
[20] Hjeij, Dawood/Biçer, Yusuf/Koç, Muammer 2022: Hydrogen Strategy as an Energy Transition and Economic Transformation Avenue for Natural Gas Exporting Countries: Qatar as a Case Study, in: International Journal of Hydrogen Energy 47:8, pp. 4977-5009, here: p.5002.
[21] Amar et al. 2022, N.7, p.14.
[22] Baerek, Mark 2023: Inside the Global Race to Turn Water Into Fuel, The New York Times, 11.03.2023, in: https://www.nytimes.com/2023/03/11/climate/green-hydrogen-energy.html [08.12.2025].
[23] European Commission 2022: REPowerEU Plan, 18.05.2022, p.7 in: https://eur-lex.europa.eu/resource.html?uri=cellar:fc930f14-d7ae-11ec-a95f-01aa75ed71a1.0001.02/DOC_1&format=PDF [01.12.2025].
[24] Bianco 2023, N. 12, pp. 2-21.
[25] Ibid., p. 6.
[26] GIZ 2024: Promoting Green Hydrogen for Economic Decarbonisation and Diversification, 01.04.2024, in: https://www.giz.de/en/projects/h2-diplo-decarbonization-diplomacy [01.12.2025].
[27] H2Global Stiftung 2025: The clean fuels and derivatives market maker shaping the energy transition, Fact Sheet 06/2025, in: https://h2-global.org/wp-content/uploads/2025/06/H2Global-Stiftung-Fact-Sheet-June-2025.pdf [01.12.2025].
[28] Lohse, Andreas 2025: Five Countries put Hydrogen Corridor "SoutH2" on Track, Power-to-X, 27.01.2025, in: https://power-to-x.de/en/five-states-put-hydrogen-corridor-south2-on-track/ [01.12.2025].
[29] Ammonia cracking refers to the chemical process that splits ammonia (NH₃) into hydrogen and nitrogen so that the hydrogen can be used as fuel or feedstock.
