Qatar is well positioned to capitalise on emerging trends in energy technologies. These include the large-scale production of hydrogen, the transformation of hydrogen into ammonia for transport and fuel, and the development of carbon capture and storage (CCS) facilities, ensuring that the former two are clean.
In November 2024 QatarEnergy (QE) and Qatar Fertiliser Company (QAFCO) broke ground on what will be the world’s largest blue ammonia and blue hydrogen project, with an annual capacity of 1.2m tonnes, and with an associated CCS facility that will sequester 1.5m tonnes per year of CO₂. It is scheduled to start production in the second quarter of 2026, the same year the European Carbon Border Adjustment Mechanism comes into force – which will impose fees on some goods, including fertilisers and hydrogen, based on the carbon emitted during production. As one of the world’s largest fertiliser producers, QAFCO will benefit from Qatar’s early and substantial investment in a blue ammonia and blue hydrogen industry and the associated CCS infrastructure, ensuring it remains technologically relevant despite stricter global environmental regulations. While the joint project will produce about 1.5% of the world’s ammonia, just 1% of the world’s current ammonia production is blue, so the project will represent a major proportion of international capacity when it becomes operational.
Carbon Capture
QE is a leader in developing largescale CCS technology. CCS is an important lever in the company’s corporate strategy to develop a position in low-carbon businesses and it operates the world’s sixth-largest CCS facility. The blue ammonia project’s CCS facility is part of QE’s plan to quintuple its CCS capacity by 2035. Being an early mover in the blue ammonia and CCS industries will allow Qatar to shape standard setting and supply chains, as the country wants blue ammonia to be a competitive alternative to green ammonia – which is a cleaner fuel and for which European markets have expressed a preference.
Continued Qatari funding for CCS and blue hydrogen and blue ammonia production is essential if Qatar is to become centre for CCS research and ammonia development. The substantial global interest in Qatari projects is an encouraging sign. The fact that Qatar has both domestic producers and consumers of hydrogen and ammonia, including QE, QAFCO and Qatar Steel, allows policymakers to take a stepwise approach by first supplying the domestic market with blue hydrogen and ammonia, and then building on that experience to scale production and supply export clients.
Challenges
Qatar’s ambitions in hydrogen, ammonia and CCS face several hurdles. High capital costs for CCS, fragmented global regulations on low-carbon ammonia and limited demand for blue hydrogen make large-scale investment challenging. Recent policy shifts in the Western markets may slow subsidy growth, but strong interest in China and India presents promising opportunities. Qatar’s geographic proximity to these markets is an advantage, though regional competition remains a factor. Water scarcity presents another challenge, as blue hydrogen production is water intensive. Enhancing efficiency in hydrogen production and desalination will be of crucial importance. While Qatar has yet to publish a comprehensive hydrogen or ammonia strategy, its Third National Development Strategy signals intent to expand in low-carbon energy.
Qatar’s early investment in blue hydrogen, ammonia and CCS position it as a regional leader in low-carbon energy. While challenges remain, Qatar’s integrated approach, strong institutional actors and strategic geography provide a solid foundation for long-term growth. By continuing to invest in infrastructure, innovation and domestic market development, Qatar can play a significant role in shaping international standards and supply chains. As global demand for cleaner fuels continues apace, Qatar’s proactive stance and scale-up potential offer a clear pathway to becoming a key centre for sustainable energy in the decades ahead.
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