Saudi Arabia is by far the largest chemical producer on the Arabian Peninsula, and the kingdom accounted for 68 percent of the GCC countries' chemical output in 2018. Even though petrochemical industry sales declined in 2020 due to the pandemic, companies in the Saudi petrochemical industry achieved record sales in 2021. The industry is expected to continue to grow in 2022.
According to the Gulf Petrochemicals & Chemicals Association (GPCA), production capacity in Saudi Arabia has more than doubled over the past decade, from 56.7 million tons (2008) to 121 million tons (2020).
Compared to other GCC countries, the Saudi Arabian chemical industry is already quite diversified. Currently, chemical projects worth US$25 billion are planned or already implemented. In addition, Saudi Arabia positions itself in the field of green hydrogen with the announcement of the green hydrogen project by NEOM, ACWA Power and AirProducts in mega regional development project NEOM.
Numerous German companies are involved in the implementation of the project, providing consulting services and/or supplying specialized technology for the project. In the long term, the country aims to become the leading producer of green hydrogen.
Sustainability and environmental protection
In general, the topic of sustainability and environmental protection plays an overarching role in Saudi Arabia in the wake of Saudi Vision 2030. All major projects initiated as part of Vision 2030 are implemented with sustainability and environmental protection in mind. This focus is also being realized in the petrochemical sector. Companies such as the Saudi Basic Industries Corporation (SABIC) are focusing on sustainable chemicals and reducing the CO2 footprint.
The expansion of the chemical industry is mostly driven forward in cooperation with foreign companies as joint venture partners. The transformation to a more sustainable industry offers many opportunities for German companies and gives them the opportunity to position themselves as valuable partners.