Green hydrogen at the heart of new EU–UAE free trade pact negotiations
FCW | 11 April 2025
Green hydrogen at the heart of new EU–UAE free trade pact negotiations
• The EU and UAE have agreed to launch formal negotiations for a free trade agreement, with green hydrogen, renewable energy, and critical raw materials set to be central pillars of the deal.
• The talks reflect growing bilateral economic ambitions and signal a strategic pivot toward sustainable energy cooperation amid broader global trade realignments.
BRUSSELS/ABU DHABI — The European Union and the United Arab Emirates are officially moving forward with negotiations on a Comprehensive Economic Partnership Agreement (CEPA), with green hydrogen, renewable energy, and critical raw materials identified as key pillars of the future trade pact.
The decision followed a phone call between European Commission President Ursula von der Leyen and UAE President Sheikh Mohamed bin Zayed Al Nahyan, marking what both sides described as a “positive step forward” in EU–UAE relations.
“This marks a positive step forward in EU–UAE relations and, alongside the negotiation of broader Strategic Partnership Agreements, can serve as a catalyst for stronger ties between the EU and the Gulf Cooperation Council (GCC),” von der Leyen stated.
While the agreement is expected to cover trade in goods, services, and investment, it will prioritize strategic sectors, including the development of green hydrogen supply chains. The EU, with its massive decarbonization agenda and Net Zero targets, is keen to secure clean hydrogen imports from high-capacity producers like the UAE, which is aggressively scaling up its hydrogen economy.
The UAE, for its part, views the CEPA as a vehicle for economic diversification and tech-sector growth, aiming to reduce reliance on oil and gas while positioning itself as a regional hub for green energy, logistics, AI, and advanced manufacturing.
The agreement would also cut tariffs and remove trade barriers, improving market access and spurring two-way flows of capital and innovation. According to WAM, the UAE’s state news agency, the EU is already the country’s second-largest trading partner, accounting for 8.3% of the UAE’s non-oil trade, and its largest export destination and investment partner in the Middle East and North Africa.
Notably, Reuters reported in March 2024 that the UAE had been quietly pressing the EU to open bilateral trade talks outside of the GCC framework, signaling Abu Dhabi’s growing geopolitical and economic independence within the region.
President von der Leyen underscored the EU’s track record in negotiating high-standard trade agreements based on mutual benefit and open markets, expressing confidence that the upcoming negotiations would proceed swiftly and with ambition. EU Commissioner Maroš Šefčovič is expected to return to the UAE soon to advance the discussions.
