[SMM Analysis] Sino-Saudi Hydrogen Energy Cooperation Upgraded: Yanbu Super Project Launched, Entire Industry Chain Collaboration Opens a New Chapter

I. Major Collaboration Takes Off! China and Saudi Arabia Join Hands to Build the Yanbu Green Hydrogen and Ammonia Mega Project

Recently, ACWA Power announced a collaboration with Sinopec on the Yanbu green hydrogen/green ammonia project in Saudi Arabia. Located in Yanbu, Saudi Arabia, the project will use wind and solar power generation to produce green ammonia. It includes the construction of 4.5 GW of electrolysis facilities for hydrogen production, approximately 8,000 mt/day of ammonia synthesis facilities, a desalination plant, a dedicated terminal, and other utility and auxiliary production facilities. The project is expected to commence commercial operations by 2030, producing 400,000 mt of green hydrogen and 2.8 million mt of green ammonia annually. According to Sinopec, its wholly-owned subsidiary, Guangzhou Engineering Company, under Sinopec Engineering Group (SEG), will form a consortium with a Spanish company to provide preliminary engineering services for the project.

II. A Look Back: Sino-Saudi Hydrogen Cooperation Evolves from "Framework" to "Action"

In fact, the cooperation between China and Saudi Arabia in the hydrogen sector has not been achieved overnight but has evolved over years, transitioning from policy consensus to concrete projects, fostering a positive trend of continuous deepening:

• December 2022: Policy Foundation — During President Xi Jinping's visit to Saudi Arabia, the two countries officially signed the Cooperation Plan for Jointly Promoting the Belt and Road Initiative, designating hydrogen as a key area of Sino-Saudi cooperation and setting the core direction for future collaboration.
• March 2023: Mechanism Implementation — The Saudi Shura Council formally approved the Memorandum of Understanding Draft on Clean Hydrogen between the Saudi Ministry of Energy and China’s National Energy Administration, establishing an official bridge for Sino-Saudi hydrogen technology exchanges and project cooperation at the institutional level.
• August 2023: Technology Goes Global — Sungrow provided core inverter technology for the 2.2 GW solar power plant in the Oxagon region of Saudi Arabia. Once operational, this plant will supply stable green electricity to the $8.7 billion green hydrogen project invested by NEOM Green Hydrogen Company, marking the first practical implementation of "Chinese equipment supporting Saudi green hydrogen capacity."
• December 2024: Full-Chain Participation — In the $2 billion green electricity project in the new city of NEOM, Chinese enterprises, as EPC contractors and equipment suppliers for green electricity, are deeply cooperating with the Public Investment Fund (PIF) of Saudi Arabia and international consortia, leading the construction of PV, ESS, and hydrogen sectors, further expanding the dimensions of collaboration.
• August 2025: Infrastructure Realization — Suzhou Xinsichuang and Saudi MOAJ Company are partnering to build six hydrogen refueling stations along the Jeddah-Riyadh-Dammam transportation corridor (1,600 km in total length), covering the core economic belt of Saudi Arabia. The project also introduces hydrogen-powered heavy trucks and cold chain logistics vehicles, with Xinsichuang providing vehicle testing and operational support, driving the transition of Saudi Arabia's hydrogen transportation system from planning to implementation.

III. The "Advantage Code" of China-Saudi Hydrogen Energy Collaboration

The friendly cooperation between Chinese enterprises and Saudi Arabia in the field of hydrogen energy benefits from China's strong industrial advantages in this sector. According to incomplete statistics from SMM, there are currently over 80 Chinese enterprises engaged in the R&D and production of electrolyzers, with more than 50 core companies possessing mass production capabilities. The hydrogen production capacity of a single alkaline electrolyzer can reach 2,000 Nm³/h. Chinese companies are simultaneously accelerating the localisation of core parts and achieving continuous breakthroughs. On the other hand, Saudi Arabia's unique solar energy advantages and policy support, such as land and tariff exemptions, have opened friendly doors for Chinese hydrogen energy enterprises to expand overseas, bringing development opportunities.

1. Policy Support:In 2022, China and Saudi Arabia signed the "Cooperation Plan Between the Government of the People's Republic of China and the Government of the Kingdom of Saudi Arabia on Jointly Promoting the Construction of the Belt and Road," identifying hydrogen energy as a key area of collaboration. Subsequently, Saudi Arabia approved a draft memorandum of understanding with China in the field of clean hydrogen energy, providing a favorable policy environment and cooperative foundation for Chinese hydrogen energy enterprises to enter the Saudi market.

2. Vast Market Demand:Saudi Arabia has listed the hydrogen energy industry as a national strategy, aiming to develop a green hydrogen industry to achieve carbon neutrality goals. It has planned multiple large-scale green hydrogen and green ammonia projects, creating enormous demand for hydrogen energy equipment and technologies, which offers Chinese enterprises broad market opportunities.

3. Prominent Cost Advantages:China's production of green hydrogen primarily relies on mature and cost-effective alkaline electrolysis technology. Some Chinese equipment is priced approximately 15% lower than that of competitors, giving it a competitive edge in the Saudi market.

Meanwhile, challenges such as differences in technical standards and incomplete local industrial support must be addressed. However, with the gradual implementation of large-scale projects like NEOM and Yanbu, as well as the improvement of hydrogen refueling station networks and hydrogen energy transportation systems, China-Saudi hydrogen energy cooperation will evolve from single-project collaboration to deeper integration, including joint standard development, industrial synergy, and market sharing. This will not only help Saudi Arabia achieve its energy transition goals under "Vision 2030" and accelerate the "go global" strategy of Chinese hydrogen energy enterprises while participating in international standard setting, but also provide a replicable and scalable cooperation model for global efforts to address climate change and build a clean, low-carbon energy system.