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In April 2023, Thailand’s state-owned oil and gas conglomerate, PTT Group, announced that it would invest $7 billion in producing green hydrogen with ACWA Power, Saudi Arabia’s leading renewable energy company.
The project aims to build a plant in Thailand that can produce 225,000 tons of green hydrogen annually, equivalent to about 1.2 million tons of ammonia .
Green hydrogen is a form of renewable energy that is produced by using electricity from solar, wind, or other sources to split water molecules into hydrogen and oxygen. Unlike fossil fuels, green hydrogen does not emit any greenhouse gases when used, making it a clean and sustainable alternative for various applications.
One of the most promising uses of green hydrogen is to power electric vehicles (EVs), especially heavy-duty vehicles such as buses, trucks, and trains that require more energy than batteries can provide. Green hydrogen can also be converted into ammonia, which can be used as a fertilizer, a chemical feedstock, or a fuel for ships and power plants.
Thai government’s targets of carbon neutrality by 2050
The investment is part of PTT’s net-zero strategy, which aligns with the Thai government’s targets of carbon neutrality by 2050 and net-zero emissions of greenhouse gases by 2065. PTT’s CEO Auttapol Rerkpiboon said that the project is the first step to push Thailand to be an international exporter of green power. He added that the goal is to supply green hydrogen and ammonia to power EVs in ASEAN countries and beyond.
The project is also significant for the diplomatic relations between Thailand and Saudi Arabia, which were restored in January 2022 after more than three decades of estrangement due to the Blue Diamond Affair. The affair involved the theft of $20 million worth of jewels from a Saudi prince’s palace in 1989 by a Thai worker, followed by a series of murders and cover-ups that soured the ties between the two countries.
The green hydrogen deal is seen as a sign of mutual trust and cooperation between Thailand and Saudi Arabia, as well as a shared vision for a clean and prosperous future. ACWA Power’s CEO Paddy Padmanathan said that the partnership with PTT will create new opportunities for both countries in the emerging green hydrogen market. He also said that ACWA Power is committed to supporting Saudi Arabia’s Vision 2030, which aims to diversify the economy and reduce its dependence on oil.
Global demand for green hydrogen could reach 800 million tons by 2050
Green hydrogen is expected to play a key role in the global energy transition and decarbonization efforts. According to BloombergNEF, the global demand for green hydrogen could reach 800 million tons by 2050, up from less than 1 million tons today. The International Energy Agency (IEA) also estimates that green hydrogen could account for 19% of total final energy consumption by 2050, if supported by strong policies and investments.
Thailand and Saudi Arabia are among the countries that are taking proactive steps to tap into this potential and become leaders in the green hydrogen industry. By investing in green hydrogen production and consumption, they are not only reducing their environmental impact but also creating new economic opportunities and strengthening their bilateral ties.