The investment is a part of PTT’s net-zero plan, which supports the Thai government’s goals of becoming carbon neutral by 2050 and having net-zero greenhouse gas emissions by 2065.
PTT Group, the state-owned oil and gas business of Thailand, said in April 2023 that it would invest $7 billion in the production of green hydrogen with ACWA Power, the largest renewable energy provider in Saudi Arabia.
A plant capable of generating 225,000 tons of green hydrogen yearly, or around 1.2 million tons of ammonia, is what the initiative plans to construct in Thailand.
Green hydrogen is a type of renewable energy that is created by splitting water molecules into hydrogen and oxygen using power from solar, wind, or other sources. For a variety of uses, green hydrogen is a clean and sustainable substitute for fossil fuels because it doesn’t release any greenhouse gases when it’s consumed.
Powering electric vehicles (EVs), particularly heavy-duty vehicles like buses, lorries, and trains that demand more energy than batteries can deliver, is one of the most promising uses of green hydrogen. Ammonia, which can be used as a fertilizer, a chemical feedstock, or a fuel for ships and power plants, can also be produced from green hydrogen.
targets set by the Thai government to become carbon neutral by 2050
The investment is a part of PTT’s net-zero plan, which supports the Thai government’s goals of achieving carbon neutrality by 2050 and net-zero greenhouse gas emissions by 2065. According to Auttapol Rerkpiboon, CEO of PTT, the initiative is the first step in Thailand’s push to become a major supplier of green energy. The objective, he continued, is to provide green hydrogen and ammonia for EVs in ASEAN nations and beyond.
The project is also important for Thailand’s and Saudi Arabia’s diplomatic ties, which were repaired in January 2022 following more than three decades of estrangement as a result of the Blue Diamond Affair. In 1989, a Thai employee stole $20 million worth of diamonds from the residence of a Saudi prince. This heist was followed by a string of killings and cover-ups that strained relations between the two nations.
The agreement on green hydrogen is viewed as evidence of Thailand and Saudi Arabia’s mutual trust, cooperation, and shared goal for a bright and clean future. According to Paddy Padmanathan, CEO of ACWA Power, the alliance with PTT would open up new potential for both nations in the developing market for green hydrogen. He added that Saudi Arabia’s Vision 2030, which aims to diversify the economy and lessen its reliance on oil, has the support of ACWA Power.
800 million tons of green hydrogen could be needed globally by 2050.
The worldwide energy transition and attempts to reduce carbon emissions are predicted to be significantly aided by green hydrogen. By 2050, the need for green hydrogen might increase from its current level of less than one million tons to 800 million tons, according to BloombergNEF. According to the International Energy Agency (IEA), green hydrogen might make up 19% of all final energy consumption by 2050 if aggressive policies and investments are made.
Several nations, including Thailand and Saudi Arabia, are acting proactively to realize this potential and take the lead in the green hydrogen market. They are not only lessening their environmental effect but also fostering new business prospects and enhancing their bilateral ties by investing in green hydrogen generation and consumption.
