How Saudi Arabia is moving towards a green economy

A Saudi man under the shade of a solar panel at a solar plant in Uyayna, north of Riyadh. This year Saudi Arabia announced a deal with Japan’s SoftBank to build the world’s biggest solar plant. (AFP)
Updated 16 November 2018

How Saudi Arabia is moving towards a green economy

  • Renewable energy and energy efficiency are the buzzwords as Gulf countries shift away from their traditional base of oil
  • There is a need to invest in the green economy, as climate change is perceived as a pressing risk

DUBAI: With climate change perceived as the most pressing risk for the world today, government officials and energy experts are emphasizing the importance of shifting toward a global green economy.
According to the Bank of America Merrill Lynch’s Thematic Investing report, the 17 warmest years on record occurred in the 21st century, and 2018 could be the 42nd consecutive year where global temperatures rise above the 20th-century average.
This year’s Intergovernmental Panel on Climate Change also warned that we are currently heading toward a 3C rise in temperature, with the 1.5C barrier potentially breached in 12 years, by 2030.
As extreme weather is recognized as the foremost global risk today, affecting 10 to 12 percent of the globe compared to 0.1 to 0.2 percent from 1951 to 1980, the frequency and severity of heatwaves, hurricanes, floods and droughts are intensifying. But green capital, digital transformation and social engagement can play a fundamental role in nations helping fight the cause by transitioning to a green economy.
Regionally, countries such as Saudi Arabia and the UAE are leading the movement with a number of initiatives in renewable energy and energy efficiency.
“What Saudi Arabia is doing by moving away from petroleum makes a lot of sense, because you have to maintain and change the economy’s base as you can’t depend on a source that is finite,” said Dr. Jorge Chediek, director at the UN Office for South-South Cooperation, who’s also the envoy of the secretary general on the topic.
“It’s finite for geological reasons and because there are technologies that are starting to (emerge). You can see on the horizon that, in some number of years, the commodity will become less valuable and, at the same time, you need to do it to broaden the base of the economy, so the reforms that are currently taking place make complete sense.”
As countries around the world prepare to decarbonize their economy, others, such as the US and potentially Brazil, were criticized at last month’s World Green Economy Summit in Dubai for pulling out of the Paris Agreement. Established within the United Nations Framework Convention on Climate Change (UNFCC), the agreement deals with the mitigation of greenhouse gas emissions, adaptation and finance, starting in 2020. The UNFCC will gather its parties during its next conference, COP24, in Poland in December.
“In international politics, we have a bifurcated reality,” said Christina Figueres, former secretary general at the UN Framework Convention on Climate Change. “We have the reality that science has dictated and another reality. The current position of the US federal government has made it quite difficult for other countries to come together and collaborate at the international political level. So, it’s no surprise that the two major developing countries, China and India, are having a very hard time continuing to negotiate under the Paris Agreement.”
She said, however, that this difficult international political reality is in stark contrast to the real economic reality, which is one that is in absolute and incontrovertible decarbonization. “China has already met the targets that they promised under the agreement, and India is really ahead,” she added. “You have a very different reality. All this will mean more food security, water security, more liveable cities, better transport and energy independence, cleaner air and less pollution.”
Renewables and energy efficiency have the potential to move the world more than 80 percent of the way toward a safe 2C warming scenario by reducing Co2 emissions by 40 percent to 2040. “We need to transform and go through this energy transition,” said former French president Francois Hollande at the World Green Economic Summit last month. “I trust today that all financial institutions have finally accepted the green economy within their strategies, but I cannot hide my worries: We need to know what the US’ behavior will be in the medium term.”
He spoke of an undisputable acceleration of the planet’s degradation that has the potential to shake up the entire globe. “My worry is that, despite the efforts by all participating countries, we have seen more Co2 emissions in 2017 than in 2016,” he added. “What I see today is we have a lot of doubts when it comes to the performance of investments in the green economy.”
He called it a threat to our planet, which will require, in the coming years, a stronger concerted effort to achieve all the commitments in the agreement.
According to the Thematic Investing report, 74 percent of the population could experience extreme heatwaves for more than 20 days a year by 2100 if emissions continue to grow, compared to 30 percent today. Even in a scenario with declining emissions, 48 percent of people will still be affected. As such, a strategy for decarbonization is urgently needed.
“To reach this level, we need to agree on a carbon price on a global level, but also in every single country,” Hollande said. “The price of carbon will provide to all economic actors in the world a possibility to reach, on the short and long term, a sign of economic growth and investments. Measures need to be taken for this, while using emerging technologies, such as artificial intelligence.”
The report notes that $14.1 trillion will be required in investment in renewables and a further $30.3 trillion for energy efficiency up until 2040. But the world’s three largest greenhouse gas emitters — China, the US and Europe — are all making major strides and it is estimated that, by 2040, the world’s electricity intensity is projected to fall by 25 percent and carbon intensity by 58 percent.
Disruptive technologies are also transforming every sector, including climate mitigation, where tech-enabled tools, such as smart grids, forest monitoring and data-driven energy reductions are expected to help to solve climate challenges more effectively at a previously unseen pace.
“The green economy is becoming more and more important every day,” said Dr. Thani Al-Zeyoudi, UAE Minister of Climate Change and Environment. “It is the only way in which we will be able to do business in a more sustainable manner. In many cases, it might not be available due to a lack of technology, but innovative solutions can lead this change.”
The digitalization of energy is an element that would have been impossible last century. “We can increase efficiency with which we produce and use energy,” Figueres said. “We’re applying AI thanks to digitalization, which takes the optimization of energy production, use and distribution to new levels. This is a complete energy revolution, the likes of which we’ve never seen in the history of humankind, and it’s all possible only because of technology and knowledge.”
Renewable energy is increasingly being perceived as an economically feasible alternative. Wind and solar are at, or at better than, grid parity in most regions globally and uptake of energy storage is needed to make renewables viable. “There are 40 jurisdictions around the world in which solar is cheaper than coal, including India and the UAE,” she added. “The next step is storage, which needs to be invested in to make a combination of renewables with storage the cheapest source of energy. We still have 1.3 billion people unelectrified on the planet, which is completely unacceptable and, through fossil fuels, it’s not possible to reach them, but with solar panels, we can go anywhere on the face of the earth.”


What gives Saudi Arabia the confidence to ease coronavirus restrictions

Updated 22 min 38 sec ago

What gives Saudi Arabia the confidence to ease coronavirus restrictions

  • A chain of institutions and processes has ensured that markets and supplies have remained stable amid the pandemic
  • From food to face masks, Kingdom has not experienced any shortage of essential goods or medical disinfection supplies

RIYADH: As Saudi Arabia implements a three-stage plan to introduce a return to normal life in less than a month, experts have urged citizens and residents to keep practicing social distancing, wear face masks in public settings and maintain hand hygiene among other precautionary measures.

The confidence behind the government’s move to relax the coronavirus lockdown stems not just from the hope that all sectors will abide by the officially recommended preventive protocols, but also from adequate stocks of essential commodities and protective items such as face masks, hand sanitizers and gloves.

There are an estimated 50 industrial units in the Kingdom that produce medical goods, along with seven factories dedicated to the development of respiratory devices. Each is doing its part to serve the country and its residents at a critical moment in history.

One of them is Enayah, Saudi Arabia’s largest manufacturer of medical masks and gowns and comprehensive medical packs. On any given day, the production lines at the Enayah factory in Riyadh hum with the noise of blue and yellow plastic sheets being turned by machines and skilled workers into surgical gowns and other medical products that meet international standards.

Enayah, in Riyadh, is Saudi Arabia’s largest manufacturer of medical masks and gowns and comprehensive medical packs. (AN Photo)

“We are producing medical products for the local market. We are also exporting to the GCC and Arab countries as well as to Europe through our foreign partners,” Abdel Hakim Al-Madhi, general manager of Enayah, told Arab News.

Enayah, which is making 250,000 comprehensive medical packs a week, has set for itself a production target of 800,000 gowns a week and a total of 10 million medical masks for the month of June.

“What we are seeing today is an abundance of goods and commodities in all markets, hypermarkets, stores and warehouses,” said Abdulrahman Al-Hussain, spokesperson for the Saudi Ministry of Commerce and Investment (MCI).

He said that unlike many other countries that ran into problems at the start of the crisis, the Kingdom’s markets did not experience any shortage or instability.

He attributed the situation to the crisis and contingency plans put in place by the Saudi government, especially the MCI and its partners, who worked with a clear purpose and focus to produce such an outcome.

“Consumers are satisfied. Consumer confidence in Saudi Arabia is ranked first in the world and surpasses the levels of more than 35 international economies,” Al-Hussain told Arab News.

“The adequate levels of supplies that we have witnessed during this crisis are the result of rationing.”

Enayah, in Riyadh, is Saudi Arabia’s largest manufacturer of medical masks and gowns and comprehensive medical packs. (AN Photo)

Al-Hussain said that Saudi consumers can rest assured about goods and commodities in stock — “availability is of the highest levels in the Middle East” — but urged shoppers to be moderate in their consumption.

“As we always say, what exceeds your need is a need for someone else,” he told Arab News.

“Consumers, be they citizens or residents, are satisfied that products and commodities are in abundance. There is no reason to buy more and overconsume. I will always recommend consuming in moderation.”

Between March 1 and mid-May, MCI teams conducted more than 153,878 field inspections, which detected 14,096 violations and resulted in instant fines being applied to the violators, Al-Hussain said.

Over the same period, the MCI responded to 119,830 electronic-service requests as part of its effort to assist the business sector.

FASTFACT

IN NUMBERS

- 787,465 COVID-19 tests carried out in KSA

- 57,013 Total number of recoveries

- 81,766 Total COVID-19 cases reported

(Source: KSA Health Ministry figures, as of May 29, 2020)

It also received 170,979 calls and inquiries at its business sector call center, established 481 initiatives for businessmen to mitigate the effects of the crisis (“our merchants are benevolent”), and enabled the production of 19 million medical masks and 210 tons of sterilizer.

Production of sanitizer lotions has been bumped up to 50 tons per day — twice the pre-coronavirus crisis rate — at Avalon Pharma’s factory in Riyadh’s Industrial City. (AN Photo)

The MCI has seized products from price offenders and reintroduced them to the market at fair prices.

“The inspections have proved that there is an abundance of basic and consumer goods. Price violations have dropped by more than 60 percent so far,” he told Arab News.

“There is overall price stability. The MCI is dealing with the issue rigorously and strictly.

“Consumer rights have always been a red line that cannot be crossed. There is an electronic system in the MCI that has more than 116 products whose prices are monitored. If there is a price violation, it will be immediately detected.”

Teams from the Ministry of Commerce and Investment have conducted tens of thousands of field inspections across the Kingdom, detected thousands of violations and levied instant fines. (AN Photo)

Addressing the situation in a broader context, Al-Hussain said: “We know that the COVID-19 pandemic has caused an economic crisis in all countries. I think that one of the main pillars of the Kingdom’s vision is the private sector and commercial establishments.

“Government agencies have provided financial packages of more than SR170 billion ($45 billion) to mitigate the effects of this pandemic.

“These packages — provided by the Ministry of Finance, the Monetary Agency and the Ministry of Human Resources — were in the form of an exemption or postponement of the payment of some government fees.

“They were given in the form of loans, in the form of supporting local content, in the form of supporting the salaries of Saudis working in private-sector facilities. Everything that arises again will be dealt with as needed.”

According to Al-Hussain, the incentives provided by the government to ensure a stable market have benefited a total of 9,000 factories, about 3,000 of which have been working at full production capacity to provide food and pharmaceutical products needed by the market.

Meanwhile, online shopping has soared by 400 percent over a two-month period, resulting in delivery hiccups. Some consumers have complained of shipping delays as some vendors have been unable to run normal commercial operations during curfew hours.

Teams from the Ministry of Commerce and Investment have conducted tens of thousands of field inspections across the Kingdom, detected thousands of violations and levied instant fines. (AN Photo)

As e-commerce sorts out its logistical problems, Saudi retail stores and shopping malls are reopening their doors to the public, albeit with strict rules in place.

Children under the age of 15 are not allowed entry into commercial retail centers. The elderly and people with chronic illnesses (of the heart, lung or kidney) and immunity-related conditions are being advised to stay at home.

Shoppers must undergo temperature checks at the entrance to stores, with those showing readings higher than 38C being transferred to the nearest medical center. They are also being asked to maintain two meters from each other, wear face masks and gloves, avoid product testing, and not be accompanied by more than one person.

As Saudi Arabia eases lockdown restrictions, resumes domestic flights and allows prayers in mosques, the vital contribution of those ensuring a seamless supply of medical disinfection and hygiene products to meet domestic demand is being tacitly acknowledged.

Among them is Avalon Pharma, the Kingdom’s largest manufacturer of sanitizing lotions. Production has been bumped up to 50 tons per day — twice the pre-coronavirus crisis rate of 25 tons per day — at the company’s factory in Riyadh’s Industrial City.

The production lines at Avalon Pharma could not have been busier when Arab News visited the premises on a recent weekday. Separate teams were weighing and preparing chemical components, monitoring the manufacturing process, and labelling the bottles filled with the lotion before placing them in cartons.

“We have been exporting our products to other countries — neighboring states, including those in the GCC bloc. We have also been exporting to the Arab countries of North Africa,” Dr. Rasheed Al-Rasheed, the factory director, told Arab News.

“But since the coronavirus crisis started, we have been focusing on the local market.”