New Mechanisms in Oman’s Round 3 Hydrogen Auction: Enhancing Investment Opportunities for Your Business
MUSCAT, JULY 15 – Hydrom, the state-owned organization responsible for Oman’s green hydrogen initiative, has announced a range of mechanisms and incentives designed to enhance investor interest in the third round of auctions for green hydrogen development blocks.
Launched in April 2025, Round 3 encompasses a 300 sq km land area in Duqm. Interested developers can bid for a minimum of 100 sq km, allowing them to customize their project footprint according to their strategic goals and market conditions.
Abdulaziz al Shidhani, Managing Director of Hydrom, stated that the current round has been structured with increased flexibility to better meet investor expectations. “We are offering a 300-square-kilometre block where bidders can propose to develop one-third, two-thirds, or the full area, depending on their capabilities. We are open to awarding the land to one, two, or three developers. This approach demonstrates Oman’s commitment while remaining adaptable,” he told The Energy Year, a UK-based energy news outlet.
Hydrom has introduced several new features in the auction process to encourage a stronger investor response. “We’re implementing a double-sided auction with a contract-for-difference model, along with a downstream auction targeting local industry,” Al Shidhani explained. “These initiatives aim to stimulate domestic hydrogen demand by narrowing the price gap between suppliers and buyers. We also support phased project development, allowing developers to start with smaller outputs and scale up over time.”
Additional incentives, which have yet to be disclosed, will reward developers who meet specific milestones. “Currently, only 4 percent of Oman’s 50,000-square-kilometre hydrogen potential has been allocated. We are keen on scaling while being mindful of risks,” he added.
Despite the optimism surrounding the auction, Al Shidhani recognized the ongoing challenges facing the global hydrogen sector, including political shifts and policy delays in major markets like Germany and Japan.
One significant issue Hydrom aims to address is the disparity between global hydrogen supply and demand. “We are addressing this through government-to-government agreements with Japan, South Korea, Germany, the Netherlands, Belgium, and Singapore,” he said. “These agreements go beyond mere memorandums of understanding; we actively conduct workshops, engage in joint studies, and have launched the world’s first liquid hydrogen corridor in collaboration with Germany and the Netherlands.”
Domestically, Hydrom is committed to developing a sustainable local hydrogen market. “We are investigating downstream applications and leveraging support mechanisms like the double-sided auction model to make green hydrogen accessible for local industries without impairing competitiveness,” he noted. “We are not awaiting ideal circumstances; instead, we are advancing with genuine engagements and infrastructure planning.”
To streamline the investment process, Hydrom has implemented a more efficient permitting system that simplifies approvals across multiple government agencies. “We achieved a significant breakthrough with the introduction of a single automatic permit system. Developers previously needed clearances from 36 entities; this process has now been reduced to just nine. Through the newly established Oman platform, once a project is approved, developers gain immediate access to all requirements, and complete land access is granted the very next day. This automated system has greatly minimized administrative obstacles,” Al Shidhani elaborated.
While highlighting Hydrom’s pivotal role in advancing Oman’s green hydrogen goals, Al Shidhani stressed the importance of collaboration among ecosystem partners. “Hydrom serves as the coordinator, but the sector’s success relies on all stakeholders fulfilling their responsibilities,” he concluded. “We anticipate that our first hydrogen plant will become operational between 2029 and 2031.”
Special Analysis by Omanet | Navigate Oman’s Market
The introduction of flexible bidding mechanisms and enhanced incentives for green hydrogen development signals a pivotal moment for businesses in Oman, positioning the nation as a competitive player in the global hydrogen market. This creates opportunities for investors to participate early in a burgeoning sector, especially with phased project development allowing for scaled investments. Smart investors should focus on collaborative ecosystems and government partnerships, as success will rely heavily on shared responsibilities and responsiveness to local industry needs.
