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

I. Landmark Cooperation Agreement Signed! China and Saudi Arabia Jointly Develop Yanbu Green Hydrogen/Ammonia Mega-Project

Recently, Saudi Arabia's ACWA Power announced a collaboration with Sinopec on the Yanbu green hydrogen/ammonia project in Saudi Arabia. Located in Yanbu, the project will utilize wind and solar power generation to produce green ammonia. Its construction scope includes a 4.5 GW electrolytic hydrogen production facility, an approximately 8,000 mt/day ammonia synthesis facility, a desalination plant, dedicated port facilities, and auxiliary production infrastructure. The project is expected to commence commercial operations by 2030, with an annual production capacity of 400,000 mt of green hydrogen and 2.8 million mt of green ammonia. Sinopec revealed that Guangzhou Engineering Company, a wholly-owned subsidiary of Sinopec Engineering (Group) Co., Ltd. (SEG), will form a consortium with a Spanish company to provide front-end engineering services for the project.

II. Retrospective: China-Saudi Hydrogen Collaboration Progresses from "Framework" to "Implementation"

In fact, Sino-Saudi cooperation in the hydrogen sector did not emerge overnight but has evolved through years of strategic planning, transitioning from policy consensus to concrete projects, demonstrating a sustained and deepening trend:

• December 2022: Policy Foundation – During President Xi Jinping's visit to Saudi Arabia, the two countries 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," explicitly identifying hydrogen energy as a key area for bilateral collaboration and outlining core directions for future cooperation.
• March 2023: Mechanism Implementation – The Saudi Shura Council formally approved the "Draft Memorandum of Understanding on Clean Hydrogen Energy" signed between the Saudi Ministry of Energy and China's National Energy Administration, establishing an official framework for Sino-Saudi hydrogen technology exchange and project collaboration.
• August 2023: Technology Export – Sungrow supplied core inverter technology for the 2.2 GW solar power plant in Saudi Arabia's Oxagon region. Upon completion, the plant will provide stable green electricity to NEOM Green Hydrogen Company's $8.7 billion green hydrogen project, marking the first instance of "Chinese equipment supporting Saudi green hydrogen production."
• December 2024: Full-Chain Participation – In the $2 billion green electricity project for Saudi Arabia's NEOM megacity, Chinese companies, acting as EPC contractors and equipment suppliers, collaborated deeply with the Saudi Sovereign Wealth Fund (PIF) and international consortia, leading the construction of PV, ESS, and hydrogen energy segments, further expanding the scope of cooperation.
• August 2025: Infrastructure Deployment – Suzhou Xinsichuang partnered with Saudi MOAJ to construct six hydrogen refueling stations along the Jeddah-Riyadh-Dammam transport corridor (1,600 km in length), covering Saudi Arabia's core economic zone. The project also introduced hydrogen-powered heavy-duty trucks and cold-chain logistics vehicles, with Xinsichuang providing vehicle testing and operational support, advancing 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 cooperation area. 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, committed to developing green hydrogen 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 technology, 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 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, as large-scale projects like NEOM and Yanbu gradually materialize, along with the improvement of hydrogen refueling station networks and hydrogen transportation systems, China-Saudi hydrogen energy cooperation will evolve from single-project collaboration to deeper integration, including standard co-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 for Chinese hydrogen enterprises, but also provide a replicable and scalable cooperation model for global efforts to address climate change and build a clean, low-carbon energy system.