Three South Korean companies have signed an agreement with UAE-based Petrolyn Chemie to build a $1bn green hydrogen and ammonia manufacturing plant in the UAE.

The three companies include electric utility Korea Electric Power (KEPCO), construction and engineering company Samsung C&T, and power supply and trading Korea Western Power.

Petrolyn Chemie is a joint venture between UAE energy companies Petrolyn and Chemie Tech.

The new plant, planned to produce up to 200,000 tonnes per annum of green ammonia, will be constructed in the KIZAD Industrial Area near the capital Abu Dhabi.

It will be built in two phases, with the first phase of the project expected to produce 35,000 tonnes before the second phase takes the project to full scale.

Green hydrogen is generated by passing renewably-produced electricity to split the water molecule, separating hydrogen elements from oxygen.

It is considered to be an important fuel for reducing greenhouse gas emissions.

Both the UAE and Saudi Arabia have set out ambitious plans for hydrogen, reported Reuters.

Petrolyn said: “Participating companies will achieve their respective Net-Zero vision through the Project. They are expected to expand the drive of future growth in the global green hydrogen market by expanded reproduction of their future business model.”

UAE has advanced its efforts to develop renewable energy projects as the country seeks to reach net-zero emissions by 2050, reported Forbes

In March, UAE signed a memorandum of understanding (MoU) with the Netherlands on clean hydrogen energy and the decarbonisation of their energy sectors.

Last month, Masdar, Abu Dhabi National Oil Company (ADNOC) and British Petroleum signed a partnership to study clean hydrogen projects in Abu Dhabi.

The UAE green hydrogen and ammonia project is said to be South Korea’s first overseas green hydrogen and ammonia project, according to the Korea Times.