EU courts Oman in decarbonisation push
Image Source: Green Hydrogen News
Oman’s strong hydrogen export potential and EU’s strength in renewable technologies and status as a demand centre can provide mutually beneficial grounds for future collaboration, according to EU Commissioner for Energy Kadri Simson.
Speaking to delegates at a joint EU-GCC Cooperation on Green Transition session during the Oman Green Hydrogen Summit, on her first visit to the Sultanate, she said, “Europe may have a perception of being a system of very strong rules and slow decision making but we are the first jurisdiction in the world to have set out the rules, and last Friday we managed to conclude our hydrogen package and decarbonisation of gas markets.
“Everyone now knows the rules that Europe will apply to produce, sell and transport hydrogen across the continent. That means we have the same rules in place for 400 million customers. The legislation provides access to third party hydrogen infrastructure including our terminals, pipelines and storage facilities. We believe in the potential of hydrogen.”
The new rules will facilitate the uptake of renewable and low carbon gases, including hydrogen, while ensuring security of supply and affordability of energy for all citizens in the EU.
The decarbonisation of the gas sector and the creation of a hydrogen market aim to make a key contribution to the EU’s efforts to reach climate neutrality by 2050. Renewable and low-carbon gases will help cut emissions in heavy-emitting sectors and support the competitiveness of European industry.
This agreement will help the EU reinforce its energy independence and further reduce imports of fossil fuels from Russia, as set out in the REPowerEU plan.
The agreement foresees that rules will be applied in two phases, before and after 2033. In the ramp-up phase, a simplified framework will apply with clear visibility about the future rules for a developed hydrogen market. These provisions cover notably access to hydrogen infrastructures, separation of hydrogen production and transport activities (so-called ‘unbundling’) and tariff setting.
A new governance structure in the form of the European Network of Network Operators for Hydrogen (ENNOH) will be established to promote a dedicated hydrogen infrastructure, cross-border coordination and interconnector network construction. It will also be responsible for elaborating specific technical rules.
The IEA forecasts that Oman, benefitting from abundant solar, wind and mineral resources, established east-meets-west shipping lanes and experience in handling ammonia, could be the sixth largest exporter of hydrogen globally.
However, on the day that COP28, in the neighbouring UAE, heralded a breakthrough in phasing out fossil fuels, delegates heard how more than 90% of Oman’s GDP is tied up in oil and gas upstream, chemicals and metals.
Despite $38bn now tied up with green hydrogen projects in the eastern Gulf country, securing offtake agreements and de-risking investments remain an enduring challenge, as for most hydrogen markets. A new state entity, InfraCo., was launched this month to drive infrastructure development across electricity, pipelines (OQGN) and water sectors.
The close of the EU-GCC session discusssed other mechanisms, such as the Carbon Border Adjustment Mechanism (CBAM), which could also present challenges.
Dr. Firas Al-Abduwani, Director General of Renewable Energy and Hydrogen, Ministry of Energy and Minerals, said, “Either Europe succeeds, and the world moves towards it, and that’s fantastic, or it won’t – we’re still in a fluid dynamic market. We will see how things evolve in time.”
H.E. Christophe Farnaud, EU Ambassador to KSA, said Europe is the “world leader” in the energy transition. He said, “We’ve been establishing the new Hydrogen Bank, and improving the hydrogen infrastructure. Oman’s public auctioning success has mobilised the private sector, including many companies from Europe. The answer to the challenges we face are complex and multi-dimensional, and forging closer ties between the EU and Oman is of great importance to us.”
Source: gasworld
