Middle East and North Africa (MENA) to become world's largest hydrogen exporter by 2060, producing 19 MtH₂ annually, while maintaining dominant position in global oil and gas markets

DNV, the independent energy expert and assurance provider, has released its report Oil & Gas Decarbonization in the Gulf Region, which looks at how Gulf Cooperation Council (GCC) countries are cutting the emissions intensity of their core oil and gas production while continuing to play a central role in global energy supply.

The report is the second in DNV’s Energy Transition Outlook 2026 series on the Middle East, examining the twin strategies shaping the region’s energy future: selective decarbonization and structural diversification.

Since 2005, the GCC has produced nearly 18% of global oil and gas, a share expected to increase as investment continues in low-cost, advantaged resources. As global energy demand increasingly shifts toward Asia, the region’s location and cost competitiveness strengthen its position as a preferred supplier. At the same time, decarbonization measures are becoming an integral part of long-term competitiveness

“The global energy transition will not progress at the same pace across regions, nor will it follow a single pathway,” said Brice Le Gallo, Vice-president & regional director for Southern Europe, MEA & LATAM, Energy Systems at DNV. “In the Middle-East, oil and gas remain central to economic stability and global energy security. The key challenge is to reduce their emissions footprint while accelerating investment in the technologies needed for a lower-carbon energy system.”

Oil and gas production in the GCC continues to expand, alongside a stronger focus on reducing operational emissions. Electrification of assets is being used to cut Scope 2 emissions from pumps, compressors, and offshore facilities, through grid connections, renewable power, and hybrid solutions. These efforts are supported by energy-efficiency measures and the use of digital tools and artificial intelligence to optimize drilling, reservoir management, and asset operations, reducing energy intensity and emissions per barrel produced.

Methane reduction remains one of the most immediate and cost-effective options for lowering emissions. Across the GCC, routine flaring is planned to be phased out by 2030 and leak detection and repair (LDAR) programmes are increasingly standard. National oil companies are also aligning with international methane initiatives, enabling continued production growth while reducing methane intensity in line with national net-zero targets.

GCC countries are realigning domestic energy systems to reduce oil and gas use at home and free up volumes for export and low-carbon fuel production. Growth in renewables, electrification of transport and buildings, and efficiency gains are driving this shift. Investment in downstream industries, petrochemicals, and low-carbon fuels is also changing export profiles, moving beyond crude oil toward higher-value and lower-carbon energy products.

Hydrogen and ammonia feature in DNV’s forecast as viable long-term export options. With access to low-cost natural gas, strong solar resources, and established industrial and export infrastructure, the region is well placed to scale both low-carbon hydrogen (produced from natural gas with carbon capture) and renewable hydrogen produced through electrolysis. By 2060, the Middle-East and North Africa region is projected to produce around 19 million tonnes of hydrogen and 13 million tonnes of ammonia per year, exporting about 50% mainly toward Europe and advanced Asian economies.

“Hydrogen, ammonia, and carbon capture are becoming core elements of the GCC’s energy export model,” said Jan Zschommler, Market Area Manager for the Middle East, Energy Systems at DNV. “As emissions requirements tighten, access to international markets will increasingly depend on carbon intensity. Integrating hydrogen production with renewable power, carbon capture, and existing industrial clusters allows the region to remain competitive while meeting these requirements.”

Carbon capture, utilization and storage (CCUS) supports much of this transition. More than 98% of CCUS projects planned or operating in the Middle East and North Africa are located in the GCC, led by national oil companies. In January 2026, the UAE's Supreme Council for Financial and Economic Affairs has introduced Carbon Capture Policy as a further commitment to meeting their carbon reduction targets. Captured CO₂ volumes (including CO₂ removal) are expected to reach around 250 million tonnes per year by 2060, equivalent to roughly 8% of regional energy-related and industrial emissions.

Carbon dioxide removal will also increase. By 2060, bioenergy with carbon capture (BECCS) and direct air capture (DAC) combined are expected to remove around 81 million tonnes of CO₂ per year, helping to offset emissions from sectors that are more difficult to decarbonize.

DNV’s Energy Transition Outlook 2026 Oil and gas decarbonization in the Gulf region report describes a transition shaped by sequencing, with reductions in emissions intensity occurring alongside continued hydrocarbon production and investment across renewables, electrification, hydrogen, methane abatement, digitalization, and carbon capture. This perspective is consistent with findings from DNV’s 2025 Energy Industry Insights survey, which identifies the Middle East as the world’s most optimistic energy region, citing expectations of revenue growth, rapid solar expansion, and continued gas development.. 

Read together, the Outlook and the survey present a picture of a region approaching the energy transition from a position of confidence and capital strength, balancing decarbonization efforts with ongoing energy system development.

The full report is available here.   l   KeyFacts Energy Industry Directory: DNV