Mubadala Investment Company and Siemens Energy signed a Mou to explore investment and commercial opportunities in clean energy and green hydrogen, establishing Abu Dhabi as a global hub of low-carbon fuels.

The pact between Mubadala, Abu Dhabi’s strategic investment arm, and Germany’s Siemens Energy, 1 of the global leaders in energy technology, will also channel investment into the development of advanced technology and the manufacturing of equipment and synthetic fuel production, Mubadala said in a statement on 10th January.

The companies will first focus on promoting Abu Dhabi’s green hydrogen capabilities, as the UAE continues to pursue ambitious targets of reducing its carbon footprint and developing its hydrogen economy. The partners will later look to develop into international markets, it said.

"Mubadala is strongly committed to the development of the UAE’s hydrogen economy, and we are happy to be extending our relationship with Siemens Energy in this important emerging energy sector," said Musabbeh Al Kaabi, chief executive of UAE Investments at Mubadala.

Through the partnership, "we expect to be able to leverage Abu Dhabi’s strong foundations for the production and sale of green hydrogen", Musabbeh Al Kaabi said.

Mubadala and Siemens Energy are looking to build a "strong business case and attract investment for the development of new facilities, and establish Abu Dhabi as a reliable supplier of green hydrogen to global markets", Musabbeh Al Kaabi added.

The UAE, the 2nd biggest Arab economy has pledged to reduce its carbon emissions by a quarter by the year 2030 and has already laid out clean energy and carbon emissions commitments. Abu Dhabi National Oil Company is also looking to establish a "hydrogen ecosystem" that will allow it to meet growing global demand for the lighter and cleaner gas that is emerging as an alternative to fossil fuels.

Clean hydrogen can cut the hydrocarbons industry’s greenhouse gas emissions by 34%, according to Bloomberg NEF. The growth of hydrogen can help develop a 142.3 billion dollar industry in Europe by the year 2050, according to Aurora Energy Research. McKinsey estimates that the development of a hydrogen economy could generate 140 billion dollar in annual revenue by the year 2030 and help support 700,000 jobs in the US alone.

Mubadala and Siemens Energy have a longstanding relationship. Together with Masdar and other energy players in the Mubadala group, the 2 companies will use renewable energy to produce green hydrogen and synthetic fuels that will provide clean and transportable energy to "fuel new hydrogen-based ecosystems that are supplied from the UAE".

The 2 partners also plan to establish an Abu Dhabi-based "world-class player in the synthetic fuels sector" and jointly develop technologies to bring down the cost of green hydrogen and synthetic fuels production, Mubadala said.

The partnership indicates the UAE’s "commitment towards developing a sustainable, green hydrogen economy", managing director of Siemens Energy Middle East, Dietmar Siersdorfer, said.

"We are looking forward to advancing and leveraging the many applications of green hydrogen, in partnership with Mubadala and the other key shareholders throughout the hydrogen value chain, for the benefit of the UAE and the world."

The partnership is 1 of 3 hydrogen related Mou was been signed during the Abu Dhabi Sustainability Week, which was started from 19th January in the emirate. This agreement is part of the UAE’s overarching framework for the development of its hydrogen economy.

Mubadala said the 1st initiative under its deal with Siemens and the broader Abu Dhabi Hydrogen Alliance will be "the consideration of a demonstrator plant located at Abu Dhabi’s Masdar City”.

Earlier In this year, Mubadala joined the investor group of the Hydrogen Council, reinforcing the company’s commitment to the emerging energy sector, according to one statement.