CCUS & Hydrogen
Why CCUS matters in the UAE specifically, every flagship project (Al Reyadah, Habshan, Hail & Ghasha), capture technologies with cost stacks, and the full hydrogen story — blue, green, pink — through to Japan/Korea offtake.
Why CCUS matters in UAE specifically
UAE has three structural reasons CCUS is not optional:
- Hydrocarbon-based GDP (~30% from oil/gas, ADNOC produces ~3.0 Mb/d crude, targeting 5.0 Mb/d by 2027). Decarbonising production is essential to maintain market access in low-carbon-import regimes (EU CBAM, etc.).
- Geology is favourable — depleted carbonate reservoirs in the Lower Cretaceous (Thamama, Kharaib, Shuaiba) have high porosity (15–25%) and proven seal integrity; saline aquifers in the Arab Formation offer ~450 Gt theoretical storage.
- EOR economics — CO2-EOR can recover an additional 5–15% OOIP from mature fields. ADNOC's Bab and Rumaitha fields are textbook candidates.
Al Reyadah — first commercial-scale CCS in MENA
How it works
- Source: Emirates Steel Industries (ESI), Mussafah, Abu Dhabi — first iron-and-steel sector capture project globally
- Capture method: Amine absorption (MEA — monoethanolamine) from Direct Reduced Iron (DRI) flue gas
- Compression: ~200 bar
- Transport: 50 km dedicated CO2 pipeline
- Use: EOR at Bab and Rumaitha onshore fields — CO2-WAG (CO2-Water Alternating Gas)
- Operator: Al Reyadah (originally 51% Masdar / 49% ADNOC; fully consolidated under ADNOC 2017)
ADNOC's CCUS scale-up plan
- Target 10 Mt CO₂/yr captured/abated by 2030 (announced 2022, reiterated COP28)
- Updated COP28 commitment: $23 bn green capex through 2030
- 2045 net-zero target for ADNOC operational emissions (Scope 1+2)
Project pipeline
| Project | Capacity | Source | Status / COD |
|---|---|---|---|
| Habshan CCS | 1.5 Mt CO₂/yr | ADNOC Gas Habshan complex (gas processing CO2 stripped from sour gas) | Announced Nov 2023; FEED awarded; COD 2026 |
| Hail and Ghasha sour gas | 1.5+ Mt CO₂/yr (capture + EOR/storage) | World's largest concurrent gas+CCS development; sour gas (~15% H2S, ~10% CO2) | FID 2023; first gas late 2025/2026; CCS scale-up to 2030 |
| Shah Sour Gas Phase 2 | ~0.5 Mt/yr | High-CO2 sour gas | In planning |
| Dalma Gas Project | TBD | Sour offshore gas | FID 2024 |
| Ruwais LNG CCS | TBD | 9.6 mtpa LNG facility | FID Jun 2024; aims for industry-low intensity using nuclear power + CCS |
Habshan CCS
The biggest CCS project in MENA pipeline. ADNOC Gas processes sour gas at Habshan; CO2 is already separated as part of acid-gas removal for sweetening. This makes it the cheapest CCS in the world — capture cost <$25/tCO2 — because the CO2 is already concentrated and pressurised.
Hail & Ghasha
Sour gas mega-project, world's largest concurrent gas + CCS development. Sour gas with ~15% H2S, ~10% CO2. FID 2023. First gas late 2025/2026. CCS scale-up to 2030. The CCS scope is integrated from day one — not retrofit.
Capture technologies — what to know
Post-combustion (amine absorption — MEA, MDEA, KS-1)
Used at: Al Reyadah (MEA)
How: Dominant for retrofits. Amine solvent absorbs CO2 from flue gas, then heats to release CO2 for compression.
Capture rate: 85–95%
Energy penalty: ~3.5–4.5 GJ/tCO2 (heat) → costs $40–80/tCO2 captured at industrial scale.
Pre-combustion / shift conversion
Used in: Blue H2 (ammonia, methanol)
How: Capture CO2 from concentrated stream after Water-Gas Shift reactor; high CO2 partial pressure makes separation easier.
Cost: $25–40/tCO2 — much cheaper than post-combustion.
Examples: Fertiglobe + Habshan effectively use this.
Industrial gas processing CCS
Used at: Habshan, Hail/Ghasha
How: CO2 is already separated for sweetening (acid gas removal); just capture and inject.
Cost: <$25/tCO2 — cheapest CCS in the world.
Direct Air Capture (DAC)
Players: Carbon Engineering (KOH-Ca looping), Climeworks (solid sorbent), 1PointFive (Occidental)
Cost today: ~$400–600/tCO2
UAE potential: Gas-cheap energy makes liquid DAC plausible at $200–300/t with scale. ADNOC + Carbon Engineering MoU 2022 for 1 Mt DAC scoping.
Mineralisation
Player: 44.01 (Omani-UAE startup) — injecting CO2 into peridotite in the Hajar mountains (Fujairah/Oman border).
How: Permanent storage as MgCO3, no monitoring liability.
Funding: $37M Series A May 2024 led by Equinor Ventures.
Oxy-fuel combustion
Status: Not deployed at scale in UAE; conceptual for future cement/power.
How: Burn fuel in pure oxygen → flue gas is mostly CO2 + H2O, easy to separate.
Storage in UAE
- EOR (CO2-WAG) — primary current sink. ADNOC reports ~10 Mt cumulative CO2 stored via EOR through 2024.
- Saline aquifers — Arab Formation (Jurassic) offers >450 Gt theoretical capacity per ADNOC/Schlumberger storage atlases.
- Depleted gas reservoirs — Bab North-East (NEB) and Rumaitha receive Al Reyadah's CO2.
- Mineralisation (44.01) — niche but permanent.
Cost stack ($/tCO2) — illustrative UAE benchmarks
| Stage | Low (industrial concentrated) | High (dilute flue) |
|---|---|---|
| Capture | $15–25 (gas processing, ammonia) | $50–90 (steel, cement, power) |
| Compression | $5–10 | $5–15 |
| Transport (50–150 km pipeline) | $3–8 | $8–15 |
| Storage / EOR injection | $5–15 (with EOR credit, can be net negative) | $10–25 |
| Total levelised | $30–55/tCO2 | $70–130/tCO2 |
EU ETS settled ~€70–80/tCO2 in 2024; CBAM phase-in from 2026. UAE's industrial CCS at $30–55/t is economic against any meaningful carbon price. That's why ADNOC is scaling rather than piloting.
Hydrogen Economy in the UAE
National Hydrogen Strategy 2050 (announced Nov 2023, MoEI)
Investment: AED 200+ bn estimated. Targets: 2 hydrogen oases by 2031, 5 by 2050.
Colour codes — UAE context
| Colour | Source | UAE relevance |
|---|---|---|
| Grey | SMR natural gas, no capture | Baseline (most ammonia/methanol pre-2020) |
| Blue | SMR/ATR + CCS | UAE's near-term scale lever — Fertiglobe, Ta'ZIZ, ADNOC |
| Green | Electrolysis from renewables | Masdar pilots; Khalifa Port; MBR Solar Park electrolyser |
| Pink/Purple | Electrolysis from nuclear | Future Barakah-coupled electrolysis (ENEC studies underway) |
| Turquoise | Methane pyrolysis | Pilot phase globally |
Flagship hydrogen projects
- Masdar Khalifa Port green H2-to-methanol pilot (with Lufthansa, BP, Etihad): 2 MW electrolyser feeding methanol synthesis; SAF demonstration with Etihad in 2023.
- MBR Solar Park green H2 plant — DEWA + Siemens Energy, 1.25 MW electrolyser, COD 2021; first solar-driven H2 in MENA.
- Fertiglobe blue ammonia (Ruwais): expanded to ~1 Mtpa low-carbon ammonia post-Ta'ZIZ; first commercial cargoes to ITOCHU Japan in 2021.
- Ta'ZIZ Industrial Chemical Zone (Ruwais) — JV ADNOC + ADQ, $5 bn first phase. 1.0 Mtpa blue ammonia (TA'ZIZ + Fertiglobe + Mitsui + GS Energy, FID May 2024), low-carbon methanol, EDC, sulfur derivatives. CCS-integrated.
- ADNOC + Mubadala + ADQ Hydrogen Alliance (Jan 2021) — coordinates blue/green H2 export strategy.
- Korea + Japan offtake MoUs: ADNOC + KOGAS, ADNOC + JERA, Mubadala + Mitsui, Masdar + Marubeni — collectively ~10 Mt/yr ammonia LOIs through 2030.
Cost benchmarks
- Blue ammonia from UAE Ruwais: $350–450/t NH3 delivered Japan/Korea (vs grey $250–320/t in 2024)
- Green H2 from MBR Solar Park electrolysis: today ~$4.5–6.0/kg; target $1.5/kg by 2031 with PV at 1.3 c/kWh and electrolyser capex <$300/kW
- Pink (Barakah) H2: ENEC studies suggest ~$2.5/kg given 95% capacity factor and $25/MWh nuclear LCOE
Practice Q&A
"Al Reyadah was the first commercial-scale CCS plant in MENA, operational since November 2016. CO2 is captured from Emirates Steel's DRI flue gas using monoethanolamine — MEA — based amine absorption, achieving roughly 90% capture efficiency at 0.8 Mt CO2/yr nameplate.
The CO2 is dried, compressed to ~200 bar, and transported through a 50 km dedicated pipeline to ADNOC's Bab and Rumaitha onshore fields, where it's used in CO2-WAG enhanced oil recovery — water and CO2 alternated to maintain reservoir sweep efficiency and recover an additional 5–15% of original oil in place.
The economics work because (a) ESI bears no capture cost premium since the plant is on a shared CO2 service model, (b) ADNOC effectively earns negative net cost per tonne after the EOR uplift. ADNOC plans to scale this concept tenfold to 10 Mt CO2/yr by 2030, with Habshan adding 1.5 Mt/yr from gas processing in 2026 and Hail & Ghasha contributing another 1.5+ Mt/yr from sour gas separation."
"Four families. Post-combustion amine — used at Al Reyadah — is the universal retrofit option but has the highest energy penalty, around 3.5–4.5 GJ per tonne of CO2 captured.
Pre-combustion or shift-conversion capture from blue hydrogen / ammonia plants is much cheaper because the CO2 stream is concentrated at high partial pressure — that's what Fertiglobe at Ruwais effectively uses, and it's why blue ammonia is competitive at $350–450/t delivered to Asia.
Industrial gas-processing CCS — what Habshan and Hail & Ghasha will use — is the cheapest of all, well below $25/tCO2, because the CO2 is already separated as part of acid-gas removal for sour gas sweetening.
Oxy-fuel and chemical looping aren't yet at scale here. Then DAC: 44.01's mineralisation in Hajar peridotite is permanent storage as magnesium carbonate, which removes long-term monitoring liability. And we should expect Carbon Engineering / 1PointFive-style liquid DAC scoping with ADNOC to advance once the cost curve breaks below $300/tCO2."
"The 2023 National Hydrogen Strategy targets 1.4 Mt/yr by 2031 and 15 Mt/yr by 2050 — top-10 producer status. The wedge in the near term is blue: SMR or ATR with CCS, leveraging cheap gas and the existing CO2 transport-and-storage infrastructure ADNOC has built around Al Reyadah and now Habshan. Fertiglobe has already shipped commercial blue ammonia cargoes to ITOCHU in Japan since 2021.
Green is the longer-term play — Masdar's 2 MW pilot at Khalifa Port and DEWA's 1.25 MW Siemens Energy plant at MBR Solar Park are demonstration scale today, but with PV at 1.3 cents/kWh from Khazna and electrolyser capex falling, green H2 could hit $1.5/kg by 2031.
Pink — nuclear-powered electrolysis from Barakah — is potentially the cheapest dispatchable low-carbon H2, around $2.5/kg given 95% capacity factor on $25/MWh nuclear LCOE; ENEC is studying it.
Realistically the UAE plays blue first, with green and pink scaling through the 2030s, all anchored by long-term offtake MoUs with Japan, Korea and increasingly the EU."
"Blue ammonia is the most commercially scalable low-carbon energy carrier UAE can deliver to Northeast Asia in the next decade. The numbers stack up: SMR of cheap UAE gas at ~$3/MMBtu plus CCS at <$25/tCO2 plus existing Haber-Bosch infrastructure at Ruwais yields blue NH3 at $350–450/t delivered Japan, versus grey NH3 at $250–320/t. With Japan and Korea targeting 20–30% co-firing of ammonia in coal plants by 2030 and shipping mandates favouring ammonia bunkering post-2027, there is a real $20–40/t green premium that supports the economics.
Risks: (1) lifecycle methane leakage from upstream gas can erode the 90%+ claimed CO2 reduction if not measured rigorously — that's why UAE joined the Oil & Gas Decarbonization Charter at COP28; (2) green H2 cost curves may undercut blue by mid-2030s, creating stranded-asset risk on long-term contracts; (3) Asian buyer policy may shift if EU-style strict additionality rules apply.
The mitigation is staged contracts with rolling pricing reviews and dual blue-then-green optionality, which is what Fertiglobe + ADNOC are structuring."
Al Reyadah 0.8 Mt/yr · ADNOC CCUS target 10 Mt/yr by 2030 · Habshan 1.5 Mt/yr COD 2026 · Hail & Ghasha 1.5+ Mt/yr · Hydrogen 1.4 Mt/yr by 2031, 15 Mt/yr by 2050 · Blue ammonia $350–450/t Japan delivered · Industrial CCS $30–55/tCO2 levelised.