Energy transition index shows region’s potential as exporter of green hydrogen

The Middle East and Africa regions are well positioned to become a major future supplier of sustainable energy to global markets, but will require stabilising regulations, enhanced investments, and a substantial increase in collaboration to realise the potential, according to a new Energy Transition index released on Thursday.

Siemens Energy and global management consultancy Roland Berger launched the Energy Transition Readiness Index for the Middle East and Africa region, based on responses from around 400 energy industry experts who attended the MEA Energy Week conference last month. According to the report, despite its strong prospects to become a hotspot for sustainable energy, the region scored only 26% on the Readiness Index.

Experts and decision makers from the Middle East and Africa from across the energy sector were asked to give their expert opinion on progress on 11 energy priorities to compile the index.

The report highlighted a worrying gap between perceptions and reality when it comes to progress on the energy transition, with conference participants on average estimating that the region's emissions fell by 23% between 2005 and today. One only around one-third correctly identified that emissions have not fallen at all: in fact, emissions grew by around 50% between 2005 and 2021, Siemens Energy said in a statement.

In the Middle East this increase was driven by heavy reliance on oil and gas and high standards of living. In Africa the drivers include population growth, underdeveloped infrastructure and limited options for financing sustainable solutions. The region makes a relatively modest contribution to global emissions, with 7% of global CO2 emissions stemming from the Middle East and just 4% attributable to Africa. However, it suffers disproportionately from the consequences of climate change in the form of heatwaves and severe weather events, Siemens Energy said.

“The disparity between the reality of the energy transition and perception in the Middle East and Africa highlights the eagerness of governments and companies to portray their successes when it comes to decarbonisation,” said Karim Amin, Executive Board Member, Siemens Energy.

“This excitement is a good thing and shows that companies and governments are interested but we need to make sure that it is backed up by real action. This should serve as a reality check. We still have a long way to go to decarbonize our energy systems,” he added in a statement.

Participants were clear that emissions need to fall in the region across the board, not just in the energy sector but also in areas such as construction, industry and transportation.

Decarbonisation efforts must be stepped up in order for the goal of carbon neutrality by 2050 to be realistic, the report urged.

The conference highlighted major opportunities in the large-scale export of green hydrogen as a potential way forward. Green hydrogen and its derivatives were a major topic of discussion during the conference – especially its enormous potential for the Middle East.

The United Arab Emirates has already announced its ambition to capture 25% of the global market for hydrogen, while Saudi Arabia aims to become the world's No. 1 supplier. A total of 46 green hydrogen projects are already underway in the Middle East and Africa, with Oman (11 projects), the United Arab Emirates (9) and Egypt (7) leading the way.

“The Middle East can play a key role in addressing the new priorities of Europe’s energy transition, through the export of green hydrogen and other potential mega projects focusing on crosscontinent transmission of sustainable energy” said Pierre Samaties, Partner at global management consultancy Roland Berger.

Hydrogen could also be the key to decarbonising the region's economies and to lowering the current reliance on income from fossil fuels, the report said.