Blue Planet Studio/Shutterstock Save for later Print Download Share LinkedIn Twitter The recent sanctioning of the $8.4 billion Neom Green Hydrogen plant in Saudi Arabia was a milestone for the emerging clean-hydrogen sector. It is the world’s biggest carbon-free hydrogen project to see a final investment decision (FID) so far and will put up to 600 daily tons of zero-emissions molecules, in the form of ammonia, onto the global market starting in 2026. But the FID at Neom belies the challenges countless other projects in the sector are facing. Despite grand ambitions to make hydrogen the fuel of a net-zero future, commercial uncertainty, technology risk and unproven supply chains present difficult questions that hinder the pace of project FIDs. Industry must sanction about $700 billion in new projects by 2030 to stay on a net-zero trajectory, according to a recent report by the Hydrogen Council. About $320 billion in projects has been announced so far, but only $29 billion of that has been formally committed, the report says. The Neom approval may nudge that figure higher, but it’s an exceptional project that highlights some of the difficulties others are facing in getting over the financial finish line. Neom, a state-backed Saudi entity overseeing the development of an eponymous innovation hub, has teamed with industrial-gas specialist Air Products and private Saudi firm Acwa Power to jointly develop the project. Neom has ready access to around 4 gigawatts of renewable power, a 30-year offtake agreement with Air Products, which is also carrying out engineering, procurement and construction (EPC) work, and little resistance in permitting and siting. These traits make Neom the envy of most electrolytic (green) hydrogen projects today. To wit, nearly two dozen regional and international banks have agreed to finance Neom.
