As the world accelerates its shift toward cleaner energy sources, demand for a transformative solution to reduce global dependence on fossil fuels and combat climate change continues to rise.
Globally, interest in hydrogen is growing due to its potential to cut emissions, decarbonise heavy industries, support renewable energy integration, and boost energy security. With the global market projected to reach trillions of dollars and create millions of jobs, hydrogen is increasingly seen as a key pillar of a sustainable energy future. However, the sector remains in its early stages, with many projects still transitioning from research to real-world application.
Against this backdrop, the Hydrogen Economy Forum (H2EF) 2025 was held from 13 to 14 May in Kuching, Sarawak. Organised under the Asia Pacific Green Hydrogen (APGH) network, the forum brought together stakeholders from government, industry, and academia to explore hydrogen’s future and Sarawak’s potential as a regional leader in this growing field.
The Hydrogen Vision for Sarawak
Sarawak has set its sights on becoming a regional powerhouse in the green hydrogen economy. Leveraging its abundant renewable energy—particularly from hydropower—alongside low operating costs and strategic geography, the state is positioning itself as a key exporter and innovation hub for clean hydrogen and its derivatives.
Central to this ambition is Sarawak’s plan to commence large-scale commercial production of green hydrogen by 2027, with domestic use beginning earlier in Kuching by 2025. Flagship projects like H2biscus and H2ornbill in Bintulu are poised to drive this effort. These initiatives, in collaboration with international partners from South Korea and Japan, aim to produce and export green hydrogen, ammonia, and methanol at industrial scales—potentially placing Sarawak at the forefront of Asia’s hydrogen supply chain.
The H2biscus project is expected to yield 7,000 tonnes of green hydrogen annually, along with 630,000 tonnes of green ammonia and 460,000 tonnes of green methanol. Meanwhile, H2ornbill will generate 90,000 tonnes of green hydrogen per year, including 2,000 tonnes for local use. An additional export facility in Samalaju, developed by H2X, Thales, and SEDC Energy, targets production of 970,000 tonnes of green ammonia and 170,000 tonnes of hydrogen annually.
To support this vision, Sarawak is investing heavily in hydrogen infrastructure—from refuelling stations to the RM6 billion Kuching Urban Transportation System (KUTS), a hydrogen-powered autonomous rapid transit network set to operate in 2027.
Beyond economics, Sarawak sees hydrogen as a pathway to decarbonisation, energy security, and job creation—projected to add at least RM2.4 billion to the state GDP by 2030. Education is also a priority, with Curtin University Malaysia offering hydrogen-focused engineering programs and establishing a research centre (Conserv) to build local expertise.
With a strategic blend of resources, early investment, and strong international partnerships, Sarawak is charting a bold course toward a clean and competitive hydrogen future.
Sarawak’s Hydrogen Ambitions: From Regional Aspirant to Clean Energy Powerhouse
During the H2EF Forum, the Premier of Sarawak, The Right Honourable Datuk Patinggi Tan Sri (Dr) Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg, delivered a keynote address titled “Charting a New Energy Future: Sarawak’s Hydrogen Economy in Action,” whereby several key information were announced.
Sarawak’s hydrogen ambitions are now formally charted in the newly launched Sarawak Hydrogen Economy Roadmap (SHER). The roadmap outlines a strategic plan to leverage Sarawak’s abundant renewable energy resources, natural gas, and carbon capture technologies to scale up low-carbon hydrogen production and drive sustainable growth in the sector.
At the core of SHER are four strategic pillars: renewable energy, natural gas, carbon capture and storage (CCS), and hydrogen. Together, they form an integrated framework for low-carbon hydrogen production, capitalising on Sarawak’s natural and infrastructural strengths.
To scale up this emerging sector, the roadmap focuses on:
- Accelerating clean hydrogen adoption as a driver of economic growth and climate action;
- Deploying advanced technologies like cost-effective electrolysers to improve production efficiency;
- Securing long-term investment and policy clarity, including the Distribution of Gas (Amendment) Ordinance, which now regulates hydrogen development and came into force in March 2025;
- Fostering international cooperation, with Sarawak forming sustainability research partnerships with global institutions such as the London School of Economics (LSE).
The roadmap also supports ecosystem-building at the local level, encouraging partnerships between Sarawak’s universities, research centres, and industry leaders. Notably, recent collaborations involve SEDC Energy, Sarawak Petchem, Bureau Veritas, and UNIMAS, reinforcing the talent and infrastructure base needed for a hydrogen economy.
Progress has already gained momentum. The unveiling of SHER was the centrepiece of the Hydrogen Economy Forum 2025 (H2EF) in Kuching, attended by over 400 global delegates. The forum facilitated key MoUs and LOIs to advance hydrogen projects and ESG initiatives. Building on this success, Sarawak will host the Asia Pacific Green Hydrogen (APGH) Conference 2026 at BCCK, reaffirming its role as a regional convener for clean energy dialogue and innovation.
Other notable milestones include the release of Sarawak’s first SME ESG report, offering insights into how local businesses are responding to sustainability standards, and reinforcing the green economy’s reach across all sectors.
Ultimately, the roadmap embraces both optimism and realism: it recognises existing challenges in hydrogen’s cost and scalability, yet places confidence in continued innovation and policy alignment to make hydrogen a key part of Sarawak’s energy and economic future. By 2035, Sarawak aims not just to participate in the hydrogen economy, but to lead it.
Hydrogen as Sarawak’s Next Export Powerhouse: Promises
Sarawak’s hydrogen strategy is not merely about domestic transformation—it is poised to become a new economic engine through exports and sustainable development. With competitive production costs, abundant renewable energy, and forward-looking infrastructure, Sarawak is emerging as a prime player in the global hydrogen economy.
Hydrogen as a High-Potential Export Commodity
Several delegates at the Hydrogen Economy Forum (H2EF) 2025 highlighted Sarawak’s potential as a future major exporter of green hydrogen, particularly to energy-hungry economies in Asia.
Three critical factors underpin this export opportunity:
- Competitive Cost Advantage: With hydropower-generated electricity as low as 3 sen/kWh, Sarawak can produce green hydrogen and derivatives such as green ammonia and methanol at globally competitive prices.
- Flagship Hydrogen Projects: Mega-scale projects like H2biscus and H2ornbill, located in Bintulu Petchem Industrial Park, are expected to produce up to 240,000 tonnes of green hydrogen annually by 2027–2028, supporting large-scale exports. A second hydrogen hub is also being planned in Kuching, expanding production and innovation capacity.
- Targeted Export Markets: Sarawak is strategically positioned to serve high-demand importers like Japan, South Korea, and Singapore, all of which are investing heavily in hydrogen to meet climate targets.
Beyond individual trade relationships, Sarawak is pursuing a broader ambition to become ASEAN’s green hydrogen hub. Its strategic location, supported by existing facilities such as Bintulu Port—Malaysia’s sole LNG export gateway—strengthens its credentials as a future export base and partner in regional energy trade.
Sarawak also plans to integrate into the ASEAN Power Grid, enhancing cross-border energy connectivity and green electricity exports as part of its regional decarbonisation strategy.
Broader Benefits of a Hydrogen Economy
The hydrogen sector promises transformative impacts across multiple domains in Sarawak’s economy and society:
- Economic Diversification and Growth: Moving beyond oil, gas, and timber, hydrogen offers a path to diversify the economy. The sector is expected to help double Sarawak’s GDP from RM136 billion in 2019 to over RM280 billion by 2030, requiring an average growth rate of at least 8% per annum.
- Job Creation and Workforce Development: Hydrogen will create new jobs across sectors and skills—from engineering to logistics to R&D. Educational programmes like Curtin University’s Bachelor of Energy Engineering are already preparing a hydrogen-ready workforce. These developments support Sarawak’s broader target of 200,000 new job opportunities by 2030.
- Environmental Sustainability and Decarbonisation: Green hydrogen, produced from hydropower (which makes up over 70% of Sarawak’s energy mix), is a zero-emission fuel. Its adoption can decarbonise hard-to-abate sectors such as shipping, heavy industry, and aviation—helping Sarawak move towards net-zero emissions by 2050.
- Energy Security and Resilience: Producing hydrogen domestically from stable, renewable sources reduces dependency on volatile fossil fuel markets. This enhances energy independence, while making Sarawak an attractive destination for low-carbon global industries.
- Innovation and Infrastructure Development: The hydrogen agenda stimulates investment in electrolysis, hydrogen storage, fuel cell technology, and urban transportation. Sarawak’s early moves—such as introducing hydrogen buses in 2019 and building refueling stations—showcase the potential for scalable, green infrastructure that serves both public needs and industrial goals.
- Regional Leadership and Visibility: By hosting recurring international events like H2EF and the upcoming Asia Pacific Green Hydrogen (APGH) Conference 2026, Sarawak is shaping the narrative and standards for hydrogen development in Southeast Asia. These platforms amplify its voice, attract investment, and consolidate its leadership in clean energy.
Hydrogen Economy In Sarawak: Strategic Challenges and the Way Forward
While Sarawak’s hydrogen ambitions are globally significant and strategically positioned, several key challenges must be addressed to turn vision into reality. The Sarawak Premier acknowledges the concerns raised by sceptics as well as the present challenges that had been highlighted in the forum, underscoring that the development of a green hydrogen economy remains complex, capital-intensive, and uncertain.
1. Economic Viability and Market Uncertainty
Despite Sarawak’s low-cost hydropower, green hydrogen remains expensive to produce due to the high cost of electrolysers and the capital intensity of renewable infrastructure. The global hydrogen market is still nascent, with grey and blue hydrogen currently dominating due to their lower costs and established supply chains.
Investors remain cautious, and private financing is limited. Most banks view green hydrogen ventures as high-risk, meaning developers often struggle to secure the capital needed for research, development, and infrastructure. The uncertain global demand for green hydrogen—exacerbated by limited long-term purchase agreements—further complicates Sarawak’s export aspirations.
To unlock the full economic potential of hydrogen, Sarawak must build investor confidence, expand access to green finance, and pursue guaranteed offtake agreements with committed international partners.
2. Technological and Infrastructure Gaps
Hydrogen’s value chain—from production to storage and transportation—remains technologically demanding and costly:
- Storage and transport require hydrogen to be compressed, liquefied, or converted into derivatives like ammonia, all of which involve energy loss, technical complexity, and expensive infrastructure.
- Refuelling infrastructure, especially for hydrogen fuel cell vehicles, is currently limited. This restricts adoption across transport sectors and slows public acceptance.
- Industrial integration is also challenging: existing plants must be retrofitted to use hydrogen, requiring specialised equipment and technical know-how.
- The electrolyser technologies capable of scaling flexibly with variable renewable inputs—despite Sarawak’s stable hydropower base—are still maturing globally.
Bridging these gaps will require long-term investment in research, demonstration, and innovation, as well as partnerships with international technology providers.
3. Environmental and Social Considerations
Though green hydrogen is a clean energy solution, its development brings environmental and social implications:
- Infrastructure projects can affect land use, biodiversity, and water resources—especially in sensitive areas.
- Local communities may raise concerns about environmental impact, land access, and safety, particularly as hydrogen production and transport are scaled up.
To maintain long-term viability and community support, Sarawak must adopt sustainable development practices, conduct transparent impact assessments, and engage with local stakeholders throughout planning and implementation.
4. Policy, Regulation, and Market Frameworks
A clear, stable, and forward-looking policy environment is essential. At present, the regulatory frameworks for hydrogen in Sarawak are still evolving, and gaps persist in areas such as:
- Safety standards
- Certification and hydrogen quality assurance
- Carbon accounting and credit systems
- Alignment with national and international hydrogen strategies
To move forward, Sarawak must continue developing a robust policy ecosystem that provides clarity for investors, aligns with federal and global standards, and fosters a competitive hydrogen marketplace.
5. Scaling and Commercialisation Risks
Transitioning from pilot-scale to full-scale hydrogen production entails significant risk:
- The capital investment required is substantial.
- Past hydrogen projects globally have suffered from cost overruns, delays, and underperformance.
- Public concerns, particularly around safety—as seen in early hydrogen bus operations—can hamper political and financial support.
A successful scale-up will require risk-sharing mechanisms, public-private partnerships, and strategic project sequencing to build confidence and demonstrate early wins.
The Way Forward
To navigate these strategic challenges, Sarawak’s hydrogen roadmap should emphasise:
- Phased development, starting with smaller export volumes and domestic use cases to build expertise and demand
- Capacity building, through technical education, upskilling, and R&D in partnership with universities and industry
- Strong international partnerships, particularly with countries and companies committed to long-term hydrogen imports
- Robust regulatory governance, to ensure safety, quality, and investor security
- Community engagement and environmental safeguards, ensuring that the hydrogen transition is inclusive and sustainable
By proactively addressing these challenges, Sarawak can not only safeguard its hydrogen investments but also position itself as a resilient and responsible global leader in the green energy transition.
Final Thoughts
Sarawak’s foray into the hydrogen economy is both bold and timely. Anchored by its abundant renewable resources, strategic regional positioning, and strong political will, the state is charting a pioneering path toward a green energy future. From flagship projects like H2biscus and H2ornbill to policy aspirations of becoming Southeast Asia’s green hydrogen hub, Sarawak is laying the groundwork for economic transformation, energy diversification, and environmental leadership.
Yet, this journey is not without its challenges. High production costs, emerging technologies, underdeveloped infrastructure, and market uncertainty all pose significant hurdles. Addressing these issues will require coordinated efforts across policy, industry, and research — and a readiness to embrace long-term, systemic change. Still, the opportunities are immense. A mature hydrogen sector could open new export markets, spur innovation, create high-quality jobs, and support Sarawak’s broader aspirations of becoming a high-income and net-zero state by 2050. With the right investments, governance, and international partnerships, Sarawak can not only realise its hydrogen vision but help shape the global clean energy transition.
References:
- New Deloitte report: Emerging green hydrogen market set to help reshape global energy map by end of decade, creating US$1.4 trillion market by 2050
- Hydrogen Economy – Meaning, Benefits and Future
- Energy Crisis in Bangladesh Highlights Risks of Fossil Fuels
- New Deloitte report: Emerging green hydrogen market set to help reshape global energy map by end of decade, creating US$1.4 trillion market by 2050
- The Hydrogen Economy in 2050
- Powering the hydrogen economy of the future
- Hydrogen Economy – Key Disruptive Forces for Global Transition to Sustainable Energy
- Saudi Arabia on track to lead global hydrogen market
- Japan’s Hydrogen Revolution Attracts Global Players
- Blue or Green? Exploring Australian acceptance and beliefs about hydrogen production methods
- Blue hydrogen: A false hope for green steel
- Global Hydrogen Market Valuation is Skyrocketing to Reach US$ 1,657.24 Billion By 2050 | Astute Analytica
- The growing demand for hydrogen: current trends, sectoral analysis, and future projections
- Global Energy Perspective 2023: Hydrogen outlook
- China’s electrolyser manufacturing capacity may hit 50 GW by 2030 – IEA
- Understanding Power Requirements for Hydrogen Generation
- Sarawak’s Green Hydrogen Ambitions: What It Means for Southeast Asia
- Joint venture formed to develop 1.3 GW hydrogen export facility in Malaysia
- Initial phase of KUTS to be operational by 2027
- Malaysia: Sarawak establishes itself as a leader in green hydrogen in Asia
- Curtin University Malaysia unveils Hydrogen Testbed and Refuelling Station, paving the way for Sarawak’s green energy future
- H2EF to shine light on Sarawak’s role in nation’s ambitions to lead Asia’s hydrogen transition
- Sarawak Launches South East Asia’s First Integrated Hydrogen Production Plant and Refueling Station, Unveils Hydrogen Buses
- Abang Johari launches Sarawak Hydrogen Economy Roadmap
- Premier Abang Johari launches Sarawak Hydrogen Economy Roadmap to propel State as clean hydrogen leader in Southeast Asia
- Premier of Sarawak Officiates Hydrogen Economy Forum 2025, Launches Sarawak Hydrogen Economy Roadmap and Announces APGH 2026 to Further Cement Sarawak’s Leadership in the Global Green Energy Transition
- Premier: Sarawak set to export 240,000 tonnes of hydrogen to Japan, Korea by 2028
- Sarawak to be first hydrogen-driven economy in SEA after two projects start operations in 2027
- Sarawak targets green hydrogen hub with global partnerships
- Sarawak has competitive edge in green hydrogen business, say experts
- Sarawak among top power trio fueling 60 pct of Malaysia’s economic engine
- Hydrogen economy in Sarawak: A realistic direction to shape the future of sustainable energy systems?
