Middle East Energy Transition: Fossil Fuels to Renewables, Hydrogen Leading the Charge
Key Ideas
  • Renewables projected to reach 14% of the Middle East power generation by 2035, driven by climate goals and diversification.
  • Key technologies like CCUS and hydrogen are being developed in the region for decarbonization efforts.
  • CCUS expected to grow at a CAGR of 44% by 2030, supporting petroleum production and blue hydrogen.
  • Green hydrogen capacity set to grow rapidly at nearly 150% CAGR from 2025 to 2030, overtaking blue hydrogen by 2028.
The Middle East energy transition is gaining momentum, with renewables forecasted to constitute 14% of power generation by 2035. While traditional fossil fuels still dominate, investments in solar power, Carbon Capture, Utilization, and Storage (CCUS), and hydrogen are on the rise, positioning the region as a leader in low-carbon energy. The market analysis report focuses on market trends, net-zero targets, and major energy players like Abu Dhabi Power, ACWA Power, Masdar, and Saudi Aramco. Although fossil fuels like gas-based thermal power will continue to hold a significant share, renewable technologies, especially solar PV, are expected to grow substantially. The region aims to address climate change concerns and diversify its energy mix. Notably, the region is lagging in energy storage, EV adoption, and renewable fuel production, but efforts are underway to develop key technologies like CCUS and hydrogen. Key highlights include the dominance of traditional fossil fuels in the power market, with renewable technologies projected to make up 14% by 2035. Abu Dhabi Power Corporation is notable for its solar power capacity. Additionally, the region is gearing up for a significant increase in battery energy storage capacity and electric vehicle adoption. The focus on CCUS is crucial for decarbonization, with an expected growth rate of 44% by 2030. This technology will play a vital role in capturing carbon emissions and producing blue hydrogen, ammonia, and synthetic fuels. The green hydrogen sector is also set for rapid growth, projected to increase at an impressive rate of nearly 150% from 2025 to 2030, ultimately surpassing blue hydrogen capacity by 2028.
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