Saudi Arabia wants to have buses running on hydrogen next year

The Neom hydrogen project, part of a $500bn industrial and tourist development on Saudi Arabia’s Red Sea coast, will begin producing fuel for transportation next year, according to the head of the venture.

By mid-2024, Neom will be making hydrogen for vehicles such as buses and trucks, Dave Edmondson, chief executive officer of Neom Green Hydrogen, said in Dubai. A larger plant, focusing on exports, is also being developed.

NGHC — a venture between local firm ACWA Power, state-backed Neom and US-based Air Products & Chemicals — is part of Riyadh’s ambitious plans to expand in clean-tech industries as it prepares for a future beyond fossil fuels.

Green hydrogen is still far more expensive than oil and natural gas, but developers are confident they can reduce costs enough to make it competitive.

The bigger plant, a $8.5bn project designed to produce 600 tonnes of hydrogen a day using wind and solar power, will start exporting fuel in the form of ammonia in 2026.

Read: NEOM Green Hydrogen Company closes $8.4bn deal for production facility

A third hydrogen facility, potentially up and running in 2028 or 2029, would likely be aimed at supplying energy to local industry, according to Edmondson.

“We are expecting additional investments in Neom,” he said. Efficiencies learned will help to bring down the costs of future facilities, while efforts by governments and companies to reduce emissions will drive a “huge increase” in demand, he said.