In our last article of the Global Perspectives series, Heba Hashem in Dubai, United Arab Emirates writes about the decarbonization trends in the Middle East. Check out the other perspectives for Direct Air Capture in Europe, EVs in Argentina, GHG solutions in India, green initiatives in the Middle East, and cleantech in Africa.
The thought of a leading oil and gas exporter committing to a goal of net zero emissions was almost unimaginable a few years ago. But with the latest policy developments, government investments, and project announcements, the possibility is starting to look a lot more likely.
October 2021 alone saw many big headlines. As the month started, the United Arab Emirates (UAE), the world’s eighth-largest oil producer, announced its intention to achieve net-zero emissions by 2050 and invest almost $163 billion in clean energy as part of the commitment.
The UAE’s decision to reduce its carbon emissions could strengthen its case to host COP28 in 2023, where it is only competing against South Korea.
As part of this multi-pronged strategy, the country pledged to cut its carbon emissions to net zero by 2060 and invest more than $180 billion to reach this goal. It also set a target to generate 50% of its energy from renewables by 2030, up from 1% in 2020, based on figures from the International Renewable Energy Agency.
In addition, Saudi Arabia intends to join the Global Methane Pledge to contribute to cutting global methane emissions by 30% by 2030; use hydrocarbon technology to eliminate more than 130 million tonnes of carbon emissions, and plant 10 billion trees.
In parallel with this national drive, the country launched the Middle East Green Initiative with another set of goals, such as planting 50 billion trees across the region, and convening leaders from across the world at a dedicated summit to motivate collective action.
Elsewhere in the Middle East, Oman and Qatar have committed to reducing greenhouse gas (GHG) emissions by 7% and 25% respectively by 2030, while Kuwait has pledged to cut its GHG emissions by 7.4% by 2035.
Most of the reduction in GHG emissions across the Gulf region is expected to come from an oil-to-gas substitution in energy production, new Combined Cycle Gas Turbines (CCGT) power plants, Carbon Capture, Utilization, and Storage (CCUS), as well as energy efficiency measures and renewable projects.
One clean-energy project that came online this year was Saudi Arabia’s first wind warm, Dumat-al-Jandal, which was connected to the grid last August. The 400 MW power station can supply electricity to 70,000 homes, displacing around 988,000 metric tons of carbon dioxide each year.
Other projects are under construction, such as the $907 million Sudair solar PV plant. This is the first project under the Public Investment Fund’s renewable energy program, and it is being built by Saudi energy company ACWA Power and Aramco.
Once completed in Q2 2022, the 1.5 GW power plant will be capable of powering 185,000 homes and offsetting nearly 2.9 million tons of emissions per year. It will become Saudi Arabia’s largest solar power plant.
Saudi Arabia also revealed plans in October to use a large portion of gas from the $110 billion Jafurah unconventional gas development to generate blue hydrogen. While a market for hydrogen barely exists today, it could be worth $700 billion annually by 2050 if producers can bring down costs, according to BloombergNEF.
This is part of the reason why the UAE aspires to become a leading hydrogen exporter and is developing a green hydrogen facility. The project, announced in May 2021, is being implemented by Dubai Water & Electricity Authority (DEWA), Expo 2020 Dubai, and Siemens Energy to demonstrate the production of green hydrogen from solar power.
To reinforce its ambition, the UAE said this week it would target a 25% global market share of low-carbon hydrogen by 2030 with the launch of its "hydrogen leadership roadmap" at COP26. The country has seven hydrogen projects underway and is targeting a large share of key export markets, including Japan, South Korea, Germany, and India, the UAE’s state news agency WAM said.
Meanwhile, the UAE’s four-unit Barakah nuclear power plant is steadily approaching completion: unit 1 commenced commercial operation in April 2021; unit 2 was connected to the grid in August; unit 3 is on track to start up in 2023, followed by unit 4.
When all units are in operation, Barakah will generate 5.6 GW of power, enough to supply up to 25% of the UAE’s electricity needs while preventing more than 21 million tonnes of carbon emissions a year.
Another big news that came out in October was Abu Dhabi National Oil Company’s (ADNOC) decision to use up to 100% nuclear and solar power starting January 2022.
The state-owned company, which pumps the vast majority of the UAE’s oil, will tap into Al Dhafra Solar PV power plant and Barakah nuclear power plant to decarbonize its operations, supporting its own target of a 25% reduction in emissions by 2030.
Al Dhafra Solar PV is a massive 2 GW project under development by a consortium led by TAQA, one of the largest utilities in the region. When completed in 2023, it will be capable of powering around 160,000 homes, cutting Abu Dhabi’s CO2 emissions by more than 2.4 million metric tons per year.
TAQA itself plans to produce more than 30% of its power from renewable sources by 2030, up from 5% today.
Clearly, the Gulf states are serious about decarbonizing their economies and lowering domestic emissions. However, their vision for decarbonization is one where they still export hydrocarbons, with the negative environmental impact reduced by Carbon Capture, Utilization, and Storage (CCUS) technologies, Freddie Neve, associate at independent think tank Asia House Middle East recently suggested.
In the UAE, Abu Dhabi started up the world’s first commercial carbon-capture steel project in 2016 to capture CO2 emitted through steel and iron production and inject it into oil reservoirs to enhance output. Developed through a joint venture between ADNOC and clean energy company Masdar and later fully acquired by ADNOC, Al Reyadah CCUS facility can capture up to 800,000 tonnes of CO2 annually.
ADNOC is now planning to expand the facility’s capacity by over 500 percent, by capturing CO2 from its own gas plants, with the aim of reaching 5 million tonnes of CO2 every year by 2030.
Mubadala Petroleum, another state-owned oil and gas company in Abu Dhabi, is exploring a similar route, having signed an agreement in September with Italy’s Eni to jointly look into their CCUS and hydrogen business options internationally.
When it comes to reducing flaring volumes, the region’s oil producers are making remarkable progress. The UAE has managed to reduce gas flaring by more than 90% over the last five decades, whereas Saudi Arabia's has cut flaring by 37% in the past three years, Iran by 29% and Qatar by 12%, according to a report by S&P Global Platts.
There are many commercially attractive options to reduce flaring in the region. According to London-based policy institute Chatham House, “the prize could be a boost to MENA’s annual revenues by up to $200 per second (up to $6.4 billion per year) by delivering wasted gas to market by pipeline, as power or in liquid form”.
For now, the Gulf countries remain reliant on fossil fuel exports and are determined to continue exploring their hydrocarbon reserves.
This determination is highlighted in the recent pledge by Saudi Arabia’s energy minister Abdulaziz bin Salman to drill “every last molecule” of oil in the country, as well as in recent announcements by major energy companies including ADNOC, Kuwait Oil Company, and Aramco, indicating production increases and development of new oil and gas deposits.
It is also underscored in a recent statement made by Mansoor Mohamed Al Hamed, Mubadala Petroleum CEO, in which he said the company was “pursuing a gas-weighted portfolio as a key bridge to renewables”.
Similarly, in an interview with CNN last October, UAE climate change and environment minister Mariam bint Mohammed Almheiri said that the country will continue producing oil and gas “if it’s still needed”.
“We can’t just switch off the tap. This is a transition… Oil and gas are still needed. But as we go through this energy transition, we are diversifying,” the minister said.
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