The Malaysian state of Sarawak goals to develop into the primary hydrogen-driven economic system in Southeast Asia. The state has a aggressive benefit because of its inexpensive hydropower and ample water provide, important for inexperienced hydrogen manufacturing. Sarawak additionally has a beautiful observe report for challenge builders because of many years of expertise serving the power and petrochemical sectors, with Bintulu Port being Malaysia’s sole liquified pure fuel (LNG) export gateway.
Lately, the Malaysian federal authorities and Sarawak have been pushing the inexperienced hydrogen agenda. Malaysia’s Nationwide Power Coverage (2022-2040) famous hydrogen as having new financial worth, that it may be used to cut back carbon emissions, and that Sarawak might be become a hydrogen export hub to generate revenue. Malaysia’s Nationwide Power Transition Street (NETR) designated hydrogen as one of many six power transition levers and set a 2050 goal to part out the extremely pollutive gray hydrogen, produce 2.5 million tonnes of inexperienced hydrogen yearly and set up three low-carbon hydrogen hubs.
The nation’s Hydrogen Economic system and Know-how Roadmap, launched in October 2023, projected a income of as much as RM12.1 billion (US$2.7 billion) in 2030 and listed an bold goal to make Malaysia a number one hydrogen economic system by 2050 the place it is going to develop into a serious hydrogen exporter within the Asia-Pacific, be capable to generate over RM400 billion (US$87.8 billion), create 200,000 jobs whereas enabling the nation to realize as much as 15 per cent discount in greenhouse gases emissions.
Sarawak’s curiosity in inexperienced hydrogen is twofold. First, Sarawak Premier Abang Johari strongly believes that hydrogen’s versatility offers it the potential to decarbonise numerous native financial sectors. Second, its export technique is vital to attaining the state’s aim of Excessive Revenue Standing by 2030. The state has superior this agenda in current months. In early June, Sarawak launched Southeast Asia’s first electrolyser assembly-distribution facility (SEA-DF). These are electrolysis techniques utilizing electrical energy to separate water into hydrogen and water and the corporate will begin exports by year-end.
Days later, at a inexperienced hydrogen convention within the state capital Kuching, Sarawak introduced updates on two main inexperienced hydrogen manufacturing initiatives within the Bintulu Petchem Industrial Park in collaboration with South Korea and Japan. Undertaking H2biscus is a collaboration between Sarawak’s SEDC Power and South Korea, with the participation of Samsung Engineering, Lotte Chemical and Korea Nationwide Oil Company. It can have an annual capability of 150,000 tonnes and a inexperienced ammonia conversion plant with a capability of 850,000 tonnes destined for South Korea. Closing challenge approval, formally known as the Closing Funding Determination (FID) stage, is scheduled on the finish of this 12 months, with business operations to begin in 2028 if accredited.
Undertaking H2ornbill is a collaboration between SEDC Power and Japanese counterparts Sumitomo Company and ENEOS. It can generate 90,000 tonnes of inexperienced hydrogen yearly for export to Japan, together with 2,000 tonnes for Sarawak’s consumption. The choice for ultimate approval is scheduled for 2026, with business operations beginning in 2029 if accredited.
The truth is that demand for clear hydrogen stays low because of techno-economic challenges and stricter laws surrounding emissions requirements for outlining clear hydrogen.
Assuming each initiatives acquire approval inside the subsequent two years, they may collectively produce 240,000 tonnes of inexperienced hydrogen yearly. This can exceed Saudi Arabia’s US$8.4 billion NEOM inexperienced hydrogen plant, touted in 2023 because the world’s largest accredited inexperienced hydrogen facility, which might produce as much as 600 tonnes a day, which interprets to 219,000 tonnes yearly when operational in 2026.
The second announcement was the launch of the Sarawak H2 Hub, a three way partnership between Sarawak’s SEDC Power and Gentari, the clear power subsidiary of Petronas. The brand new firm would be the sole car to develop and function this facility, with operations beginning in 2028. It can assist the H2ornbill and H2biscus crops and be the only real provider of inexperienced hydrogen for downstream services within the Bintulu space to provide inexperienced hydrogen-dependent fuels reminiscent of e-methanol and sustainable aviation gas.
Lastly, SEDC Power’s plans to develop a hydrogen manufacturing plant and refueling station for the Rembus Depot had been showcased. Sarawak is the primary in Southeast Asia to have a hydrogen-powered public bus and metro system via its Kuching City Transport Techniques (KUTS) underneath Sarawak Metro. The refueling station is a part of KUTS and may produce about 1,900 tonnes of hydrogen when it’s accomplished subsequent 12 months.
Sarawak’s ambition to be a inexperienced hydrogen economic system must be understood within the context of world clear hydrogen developments. Clear hydrogen consists of each blue and inexperienced hydrogen. Blue hydrogen is produced utilizing fossil fuels with carbon seize, whereas inexperienced hydrogen makes use of renewable power and electrolysis, which doesn’t produce carbon dioxide emissions. Inexperienced hydrogen is environmentally friendlier however prices two to a few instances greater than blue hydrogen, making such initiatives prohibitive. Many deliberate clear hydrogen initiatives worldwide fail, particularly inexperienced ones.
The Worldwide Power Company’s up to date 2023 Web Zero Emissions by 2050 State of affairs estimates that complete international hydrogen demand will attain 150 million tonnes by 2030, up from 95 million tonnes in 2022. Clear hydrogen manufacturing initiatives that had been introduced up till 2023 — even when realised — will attain solely 70 million tonnes or 55 per cent of complete demand. The truth is that demand for clear hydrogen stays low because of techno-economic challenges and stricter laws surrounding emissions requirements for outlining clear hydrogen. The drop in manufacturing price shall be a vital international game-changer, however it will depend upon falling renewable power prices and improved electrolyser applied sciences.
On this regard, it’s not sure that H2biscus and H2ornbill can get FID approval, whereas their success shall be no imply feat. A lot relies on the builders’ capability to safe South Korean and Japanese patrons keen to pay a premium for inexperienced hydrogen, and prevailing international financial circumstances. Failure will give trigger for Sarawak’s Southeast Asian neighbours to replicate on their very own methods and discover different renewable choices.
Conversely, the approval of H2biscus and H2ornbill could have implications past direct stakeholders. If it succeeds, Sarawak will obtain worldwide recognition and probably play an influential position in driving international clear hydrogen developments. Classes from its position as producer, exporter and utiliser will feed into this nascent business, starting from new laws and requirements, to the forging of latest worth chains, the event of inexperienced hydrogen industrial zones and new collaborative challenge growth fashions.
Sarawak’s success (or failure) will even have an analogous regional affect, providing classes for different Southeast Asian gamers. It might present momentum for Asean to prioritise establishing a regional market with harmonised laws and requirements, related inexperienced financing fashions and coordinated regional infrastructure works.
Sarawak’s success — if achieved within the subsequent two years — will bolster Malaysia’s hydrogen economic system objectives, mark a serious milestone for the worldwide inexperienced hydrogen business, and function vital first steps in the direction of clear hydrogen growth and utilisation inside Southeast Asia.
Dr Christopher Len is a visiting senior fellow with the Local weather Change for Southeast Asia Programme, ISEAS – Yusof Ishak Institute.
This text was first revealed in Fulcrum, ISEAS – Yusof Ishak Institute’s blogsite.
