Latest news with #YaseenGhulam
Arab News
03-05-2025
- Automotive
- Arab News
Saudi Arabia on track to lead global hydrogen market
JEDDAH: Saudi Arabia is positioning itself as a leader in the hydrogen economy, with significant investments in both green and blue versions of the fuel with the aim to generate half of the Kingdom's electricity from renewable sources by 2030. With its commitment to achieving net-zero emissions by 2060, strategic partnerships, and projects like NEOM's hydrogen initiative, Saudi Arabia is paving the way for a sustainable, hydrogen-powered future. Saudi energy giants, including Aramco and ACWA Power, are leading major projects in this area aligned with the country's sustainability goals. ACWA Power's Sudair solar plant, with a 1,500 megawatt capacity, will offset 2.9 million tonnes of carbon emissions annually. Aramco is also involved in $30 billion renewable energy projects with the Public Investment Fund and other partners. Yaseen Ghulam, associate professor of economics and director of research at the Riyadh-based Al-Yamamah University, told Arab News that Saudi Arabia plans to invest up to $10 billion in green hydrogen manufacturing firms, aiming to be responsible for 15 percent of the world's blue hydrogen production. 'Aramco aims to generate 11 million tonnes of blue ammonia annually by 2030. In a well-established plan, Saudi Arabia is aggressively investigating the application of hydrogen in many fields. More specifically, the country is also exploring hydrogen applications in industrial, power generation, and transportation, and car fuel for fuel cell-powered vehicles,' Ghulam said. He added that the country's Vision 2030, smart trade relationships with Europe and Asia, technological advancements, and government support are driving these plans and progress in the hydrogen energy sector. The expert noted that integrating hydrogen into Saudi Arabia's blue economy is a key strategy for sustainable growth, with green hydrogen set to transform industries like transportation, steel production, and heavy-duty vehicles. 'The global green hydrogen market is expected to see annual growth of more than 40 percent by 2030, reaching $72 billion. By 2050, the demand for green hydrogen could replace 37 percent of the world's oil production. Saudi Arabia, with its focus on the blue economy since the start of Vision 2030, is making efforts to transition to this next stage by producing and using green hydrogen,' he said. The academic emphasized that Saudi Arabia's natural environment — specifically its sunny, windy desert landscapes — creates favorable conditions for green hydrogen production. Youssef Saidi, a research fellow at the Economic Research Forum and a member of the Saudi Economic Association, agreed with Ghulam, adding that the abundant renewable energy resources, including solar, wind, and geothermal, make the Kingdom an ideal location for green hydrogen production. The global green hydrogen market is expected to see annual growth of more than 40 percent by 2030, reaching $72 billion. By 2050, the demand for green hydrogen could replace 37 percent of the world's oil production. Saudi Arabia, with its focus on the blue economy since the start of Vision 2030, is making efforts to transition to this next stage by producing and using green hydrogen. Yaseen Ghulam, Associate professor of economics and director of research at Al-Yamamah University Ghulam noted that green hydrogen has potential applications in numerous industries that are expected to play a prominent role in the success of Vision 2030, including transportation, steel production, ammonia manufacturing, and heavy-duty vehicles. 'It can also be used for energy storage, powering transportation, and stabilizing the electrical grid. Currently, many industries that are vital for the blue economy are ready to accept hydrogen, and some industries, such as shipping, transportation, and heavy industry, are preparing for it in the near future,' he said. Discussing the cost of hydrogen energy production, Ghulam stated that global prices are expected to range between $2 and $7 per kilogram, while Saudi Arabia's cost is projected to be just $2.16 per kilo. He noted, however, that if domestic natural gas prices remain stable, the cost of producing blue hydrogen could drop to $1.13 per kilogram. 'This will, of course, help the Kingdom's blue economy progress steadily in the next few decades and beyond,' he said. According to the International Energy Agency, global hydrogen investments have surged, with the NEOM Hydrogen Project leading the way as the largest to reach a final investment decision, boasting 2.2 gigawatts of electrolyzer capacity. Ghulam pointed out that Saudi Arabia's success in the hydrogen sector is also driven by strong international collaborations, such as joining the International Partnership for Hydrogen and Fuel Cells in the Economy, a global initiative aimed at advancing hydrogen and fuel cell technologies. He added that NEOM, ACWA Power, and Air Products have also formed a $500 billion renewable energy-powered Helios Green Hydrogen and Ammonia Project. 'The facility is expected to produce 650 tonnes of green hydrogen daily by 2026,' he said, adding that Aramco, MIG, and IE have partnered to establish new green hydrogen and ammonia production facilities. 'Germany and the Kingdom are collaborating to develop clean hydrogen technology. King Abdullah University of Science and Technology, NEOM's Education, Research, and Innovation Foundation along with Enowa, NEOM's sustainable energy and water systems subsidiary, have recently made agreements to promote the hydrogen economy,' he said. According to Saidi, the King Salman Energy Park, the Blue Ammonia Supply Chain project, Hydrogen City within the NEOM megaproject, and the Helios Green Fuels Project are all ambitious renewable power initiatives. He added that these are not the only developments, as the Kingdom has all the resources needed to position itself as a global leader in the renewable energy market and play a key role in achieving long-term global carbon neutrality goals. Ghulam noted that the demand and supply of hydrogen energy are expected to grow exponentially due to the growing focus on clean energy, as Saudi Arabia is distinguishing itself compared to major global hydrogen producers. He noted that 10 percent of the world's energy may come from hydrogen by 2050, resulting in a market value of up to $700 billion. 'The clean hydrogen market is expected to increase to $640 billion in 2030, compared to the $160 billion in 2022,' the associate professor said. He explained that while the EU aims to produce 10 million tonnes of green hydrogen and import an additional 10 million tonnes, Saudi Arabia is aiming to become the world's largest exporter of the fuel by 2030, producing 1.2 million tonnes of green hydrogen. 'The Kingdom's location along trade routes allows for fast shipping of hydrogen to markets in Northern Europe, South Korea, Japan, and Singapore,' he said. He said that the Kingdom's expertise as a major international oil producer — and the existing related infrastructure — offer a strong basis for developing and expanding green hydrogen export capabilities. 'King Abdullah Petroleum Studies and Research Center estimates that financing costs in the Kingdom are at least 200 basis points less than those in Germany, with green hydrogen costing between $1- $2/kg, making it the cheapest producer with clear comparative advantage in international trade of this vital product,' the associate professor said. More importantly, he concluded, the Kingdom's ambition to retain its dominance in the international energy trade remains strong, driven by substantial investments and advancements in the hydrogen energy sector. Meanwhile, Saidi told Arab News that Saudi Arabia is set to play a key role in the global energy transition, leveraging its expertise to develop and scale hydrogen production. He added that the Kingdom's abundant hydrocarbon resources can support blue hydrogen production through Steam Methane Reforming with carbon capture and storage. Saidi explained that international partnerships and private investment are driving Saudi Arabia's hydrogen sector growth. He noted that the Kingdom aims to become a global hydrogen supplier and has established several joint ventures to develop the necessary infrastructure. 'These include partnerships between Air Products and ACWA Power, SABIC and ExxonMobil, and Air Liquide and Tasnee,' he said. He emphasized that international partnerships enable Saudi Arabia to access cutting-edge technologies and expertise in hydrogen production, storage, and transportation. Saidi added that these deals also provide market access, which is crucial for scaling up hydrogen production and positioning the Kingdom as a global leader in clean energy.
Arab News
07-03-2025
- Business
- Arab News
Franchises boosting Saudi economy, as Kingdom dominates half of MENA's $30bn market
JEDDAH: Franchises are proving increasingly vital to Saudi Arabia's economic development, driving employment, government revenue, and cultural transformation in a youthful nation. Economic experts have told Arab News that the introduction of a law in 2019, followed by expansion of regulations the following year, helped open the Kingdom up to international businesses, as well as strengthened the relationship between franchisors and franchisees. These moves, together with the economic expansion of Saudi Arabia as part of the Vision 2030 initiative, means the Kingdom now accounts for nearly half of the $30 billion franchise market in the Middle East and Africa, according to Yaseen Ghulam, associate professor of economics at Riyadh-based Al-Yamamah University. He told Arab News there is consensus among researchers and industry observers that franchise businesses are expected to grow by more than 20 percent per annum for the coming five years and beyond. 'This presents an exceptional opportunity for international brands to enter the Kingdom through franchising, given the fact that European and North American consumer markets are struggling due to economic uncertainty, unemployment, and higher cost of living,' Ghulam said. He added that franchise registrations in the Kingdom stood at 1,788 by the end of the third quarter of 2024, up from just 185 three years earlier. With 1,232 entries, the accommodation and food services sector — which includes lodging facilities, dining establishments, and enterprises associated with tourism — led the registrations, the associate professor said. He added that the wholesale and retail division came in second with 689, and the transport and storage sector with 257. An important element of this development, he noted, is more widespread activity, covering almost all major cities, rather than clustered around one particular region or sector. 'With 647 franchise registrations, Riyadh has led the field, followed by Makkah with 363, and the Eastern Province with 225. According to some estimates, over 1,200 brands are available for franchising, and the franchising sector in Saudi Arabia is offering over 10,000 business opportunities.' Ghulam noted that more than 600 international and 380 local franchise brands are present in the Kingdom, according to the Small and Medium Enterprises General Authority, known as Monsha'at. Abdullah Al-Maghlouth, a member of the Saudi Economic Association, told Arab News that government support for SMEs through streamlined processes and a business-friendly environment has helped drive the franchise sector. He added that the 2019 law bolstered the Kingdom's business ecosystem, attracting local and international investments through a clear legal framework. 'The 2020 executive regulations complement this by providing a comprehensive legal environment that facilitates franchise operations and ensures guarantees for all parties involved. This enhances transparency between franchisors and franchisees, making the Saudi market increasingly appealing to investors,' Al-Maghlouth said. Reflecting on the key factors driving growth in the sector in the Kingdom, Ghulam said Monsha'at's Franchise Center is 'aggressively advancing entrepreneurship' through different programs, such as Tomoh. He added that trademarks are now fully protected thanks to the Kingdom's recent successful implementation of an intellectual property rights plan, with online portals making trademark registration and protection simple and accessible. Financial guarantees provided by the Kafalah program are also proving to be a factor in sourcing finance from local investors, Ghulam said, and he noted that the Social Development Bank has played a significant role in advancing franchising in the Kingdom. The institution provides financing solutions ranging from SR150,000 ($40,000) to SR4 million with a maximum financing length of 8 years as part of its program to assist new franchise developments and expansion. 'Another significant step in bolstering the franchise community is the founding of the Saudi Franchise Association, the Kingdom's first specialized association. It has worked to promote the idea and culture of business excellence since its foundation. Additionally, it has organized numerous seminars and workshops and signed various partnerships with colleges and chambers of commerce,' said Ghulam. Arrangements are also in place in Saudi Arabia to support franchise business and provide consulting. For both domestic and international businesses, Arab Franchise Marketing Corporation provides media platforms, administrative and legal services, and new franchise opportunities. 'Through useful solutions, they work with a profit system to grow the franchise market in the MENA area, especially in Saudi Arabia,' said the associate professor. Highlighting how Saudi Vision 2030 has influenced the development of the franchise market, Ghulam said that the objectives of Saudi Arabia's Vision 2030 are to invest in globally competitive industries, diversify the country's economy, boost the private sector, and create jobs. 'Following this, one important economic area that is highlighted in Vision 2030 is franchising. For the success of the Vision, a comprehensive legal, regulatory, financial, and economic set up was needed and has been established for the promotion of the private sector to diversify the economy and reduce dependence on the oil sector,' he said. The development, he added, of the basic and changed framework has indeed helped the private sector grow in the last few years. Ghulam said that the franchising industry has greatly benefited from Vision 2030, with support mechanisms, new institutions, and financial aid serving as key enablers. He added that investment in mega projects, sports events, and facilities has created youth employment, raised real wages, and driven demand for sectors like education, health, dining, beauty, and fitness. This has attracted international franchisors and local investors, fueling significant growth in the sector. Ghulam emphasized that Vision 2030 has also shifted the mindset of Saudi youth, encouraging private sector roles and self-employment through franchising, offering substantial returns on investment. He advised foreign brands seeking to expand into the Saudi franchise market that there is significant potential in sectors such as food, retail, and education, as well as health, fitness, and sports. 'More specifically, customers are quite fond of education franchises, including both domestic and international franchises that focus on training, early childhood care, development centers, and tutoring,' Ghulam said. He continued that Saudi Arabia's focus on health-related industries has driven high demand for gyms, nutritious food franchises, and medical services, adding that loosened social regulations, particularly for women, and government support for regional designers have boosted the retail sector, particularly fashion. Al-Maghlouth agreed that beyond traditional sectors like tourism, hospitality, and food, the Saudi franchise market will continue to expand into emerging fields such as technology, education, and healthcare. 'The supportive legal framework will continue to enhance market transparency and drive growth in economic activities, fostering a sustainable investment environment. This will not only benefit all stakeholders but also solidify Saudi Arabia's position as a leading investment destination in the region.' he said.
