Saudi Arabia completes world's largest green hydrogen plant at NEOM, with ammonia exports in sight
Saudi Arabia says it has finished building the world's largest green hydrogen plant, a solar- and wind-powered project intended to show that clean hydrogen can move beyond pilot plants and into the global energy economy. The facility, part of the $8.4 billion NEOM Green Hydrogen Project, is located at Oxagon on the Red Sea coast and has entered the commissioning phase, with commercial production planned for 2027.
The project is built around ammonia rather than hydrogen itself. It is expected to produce about 1.32 million tons of green ammonia each year, using roughly 661 tons of carbon-free hydrogen produced daily. That hydrogen will come from 2.2 gigawatts of electrolyzers, the largest installation of their kind in the world, supplied by about 4 gigawatts of renewable power: a 2.2-gigawatt solar farm and 257 wind turbines with 1.6 gigawatts of capacity.
If the plant reaches its targets, it could avoid roughly 5.5 million tons of carbon emissions per year, giving shipping, chemical and fertilizer producers a lower-emission fuel source. Those sectors are difficult to clean up through electrification alone, which is why green hydrogen has been promoted as an alternative to fossil fuels.
The scale comes at a critical moment for hydrogen. Many announced projects have struggled to reach operation, and ING has estimated that about 50 projects have been publicly canceled. The main reason is cost: green hydrogen in favorable regions runs about $2.04 to $2.72 per pound, compared with roughly $0.68 to $1.13 per pound for gray hydrogen made from fossil fuels, according to a breakdown by The Electric Viking, a clean-energy commentator. That price gap matters for cost-sensitive industries such as shipping, chemicals and fertilizer.
NEOM has dealt with one major hurdle by locking in an anchor buyer. Air Products signed a 30-year exclusive off-take agreement for the plant's entire ammonia output, a deal that helped secure $6.1 billion in financing from 23 banks. Air Products is also finalizing an agreement with Norway's Yara to market the ammonia globally.
The choice of ammonia as a carrier also avoids the difficulty and expense of shipping hydrogen, which must be compressed or cooled to extremely low temperatures. Ammonia already moves through a mature global trade system, with about 22 million tons traded annually. That means the vessels, ports and safety frameworks are mostly in place, a practical advantage that could reduce costs and accelerate wider use.
If large-scale facilities like NEOM can deliver clean fuels reliably and competitively, ports, factories and freight networks could gain a realistic path to cutting pollution.