Circular carbon economy holds promise in battle against global warming

Saudi Arabia has embraced the circular carbon economy (CCE) enthusiastically, and is now playing a leading role in advancing a strategic plan to tackle one of the most serious issues the world faces today — the existential threat from climate change. (AFP/File Photo)
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Updated 26 July 2020

Circular carbon economy holds promise in battle against global warming

  • Tech-neutral approach forms key part of KSA’s strategic plan to achieve sustainable development goals
  • CCE offers a potential path to slow down and even reverse the inexorable process of global warming

DUBAI: “Carbon is not the enemy,” said Prince Abdul Aziz bin Salman, Saudi Arabia’s energy minister, when he laid out the foundations of the strategy that the Kingdom believes can halt the planet’s apparently inexorable slide toward climate catastrophe.

Saudi Arabia cannot be credited with inventing the idea of the circular carbon economy (CCE), which grew out of a body of work by environmentally conscious economists and thinkers over the past few decades.

But the Kingdom has embraced the concept enthusiastically, and is now playing a leading role in advancing a strategic plan to tackle one of the most serious issues the world faces today — the existential threat from climate change — even as it wrestles with the immediate challenge of the COVID-19 pandemic.

Last year, at the Future Investment Initiative forum in Riyadh, Prince Abdul Aziz said: “Considering our pivotal role as a global energy producer, it is our responsibility to find a solution through innovation and collaboration to create a sustainable framework for growth.”

Since then, CCE has become a central plank of the Kingdom’s long-term energy thinking, embedded in policies and proposals from the think tanks of the G20 leaders’ organization as it prepares for the global summit in November, as well as in practical projects and initiatives by Saudi Aramco, the Kingdom’s energy giant, and other big mega-projects of the Vision 2030 reform strategy, such as Neom.

In essence, CCE is a masterplan to slow down and even, hopefully, reverse the apparently inexorable global warming caused by the emission of carbon materials into the atmosphere, identified by scientists as the main factor behind climate change.

CCE aims to help the world meet the targets set by the 2015 Paris Agreement on climate, to keep the rise in global temperatures to 2 degrees above pre-industrial levels, and even cut to 1.5 degrees, by reducing emissions from the carbon products that create harmful “greenhouse gases.”

It plans to do this by developing a “closed loop” system that effectively mimics nature’s own cycles, enhancing and augmenting the process by which harmful carbon materials are neutralized.

Adam Sieminski, president of the King Abdullah Petroleum Studies and Research Center (KAPSARC) in Riyadh, told Arab News: “The CCE is a holistic approach to carbon management that can guide international efforts toward a more inclusive, resilient, sustainable, and carbon‐neutral or net‐zero energy system.”

The term “net zero” is key here. Some radical environmental activists want the world to commit to “absolute zero” on carbon emissions. But the Saudi approach to CCE — as you would expect from the world’s leading oil producer — is to continue to exploit the undoubted benefits from carbon as a source of energy, while attempting to minimize the harmful side-effects.


Circular Carbon Economy

CCE employs a technology-neutral approach to achieve energy market stability and responsible economic growth.

KAPSARC research distinguishes between different types of carbon within the economic process. “Living carbon” is a positively beneficial phenomenon, essential to human life and the process by which we have fresh foods, healthy forests, and fertile soil.

More problematic are “durable carbon” — where it is locked in stable solids such as fibers and plastics — and “fugitive carbon” which consists of gases like carbon dioxide and methane that are released into the environment by energy generation, transportation, and industrial cycles.

Core to the problem of dealing with the carbon situation are the “three Rs” — to reduce, reuse, and recycle carbon products that can pollute the world’s environment. These ideas are increasingly familiar to consumers the world over, in calls or more awareness of the use of plastic products, through the development of clean electric vehicles, right down to the bags at the supermarket checkout.

Saudi Arabia already has in place various programs that address these issues. There has been an energy efficiency program in place for nearly a decade, designed to help industry, transportation, and buildings optimize their use of energy. Phasing out of energy subsidies is also a crucial part of that plan.

The Kingdom also has well-developed and ambitious programs for renewable energy sources, such as wind and solar, as well as a strategy for civil nuclear power generation that is being steadily implemented, in accordance with international atomic power standards.

But on their own, the 3 Rs are unlikely to help the world meet the targets of the Paris Agreement. Saudi Arabia has emphasized a fourth R — remove — which is an altogether more ambitious proposition.

Energy expert Christof Ruehl, senior research fellow at the Center on Global Energy Policy at New York’s Columbia University, told Arab News: “The first three Rs are good general principles, but the fourth R, remove, is a significant technological and commercial challenge.”

Removing carbon via technology involves a process known as carbon capture, utilization, and storage (CCUS) which is a complicated and expensive business.

Another energy expert agreed that implementing CCUS was an essential but challenging goal.

Robin Mills, chief executive of consultancy Qamar Energy, said: “The technologies for reusing carbon are limited in scale, costly and/or technologically immature. However, a major scale-up of carbon capture, carbon use or storage, and direct capture from the air, are all essential parts of decarbonizing the Saudi economy in the longer term and keeping its fossil-fuel resources viable.”


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The Kingdom already operates the largest CCUS plant in the world. Neom, the gigantic mega-city being planned in the north east of the Kingdom, has declared it will be the world’s biggest carbon-free hub, and is working on plans for environmentally friendly water desalination in addition to a big program of renewables and the use of “green hydrogen” as fuel.

Saudi Aramco, which is one of the leading global investors in clean energy techniques, is working actively on developing processes in its oil drilling, refining, and transportation.

It already uses carbon-capture technology to extract CO2 from the industrial process, employing it to maintain pressure in oil reservoirs and for enhanced oil recovery.

Aramco crude is recognized as among the cleanest in the world thanks to low carbon intensity and efficient refining processes, in comparison with its international peer group.

Industrial and technological developments such as these will contribute to reducing emissions of greenhouse gases and slowing the pace of global warming. But, the experts agree, there will also have to be a serious effort to reduce use of carbon fuels if the Paris Agreements are to be met.

This picture taken on December 11, 2019 shows a view of Jubail Desalination Plant at the Jubail Industrial City, about 95 kilometers north of Dammam in Saudi Arabia's eastern province overlooking the Gulf. (AFP)

Ruehl said: “There are technologies out there, but none works on the scale necessary to make a serious dent in global levels of emissions. So, you need a means — either via regulation, tax, or a market mechanism — that incentivizes carbon emitters to reduce their output. But this has proved to be very difficult to organize on a global level.”

The European authorities tried to put in place a carbon-trading system that would allow industrial producers to buy and sell the right to produce carbon, but it fell victim to market manipulation and corruption. Other schemes suffered similar challenges.

Prince Abdul Aziz said recently that Saudi Arabia would soon announce its own carbon-trading strategy to address these vulnerabilities, stressing the commercial benefits of such a plan.

“Carbon is a resource. It is not something that we should just throw and just emit it. Actually, capturing it lets us make money out of it,” he said.

Such a project would bring its own advantages, Ruehl agreed. “For KSA, which is a comparatively ‘clean’ oil producer, it would be a competitive advantage over other oil producers if an effective carbon market could be set up,” he said.

Carbon is not an enemy. But it will take a lot of ingenuity and global co-operation to turn it into a committed ally. The hope must be that the experience hard won during the pandemic will help forge that collaboration once the virus is conquered.


Twitter: @frankanedubai


The Musk Method: Learn from partners then go it alone

Updated 18 September 2020

The Musk Method: Learn from partners then go it alone

  • Entrepreneur building a digital version of Ford Motor’s iron-ore-to-Model-A production system of the 1920s

Elon Musk is hailed as an innovator and disruptor who went from knowing next to nothing about building cars to running the world’s most valuable automaker in the space of 16 years.

But his record shows he is more of a fast learner who forged alliances with firms that had technology Tesla lacked, hired some of their most talented people, and then powered through the boundaries that limited more risk-averse partners.

Now, Musk and his team are preparing to outline new steps in Tesla’s drive to become a more self-sufficient company less reliant on suppliers at its “Battery Day” event on Sept. 22.

Musk has been dropping hints for months that significant advances in technology will be announced as Tesla strives to produce the low-cost, long-lasting batteries that could put its electric cars on a more equal footing with cheaper gasoline vehicles.

New battery cell designs, chemistries and manufacturing processes are just some of the developments that would allow Tesla to reduce its reliance on its long-time battery partner, Japan’s Panasonic, people familiar with the situation said.

“Elon doesn’t want any part of his business to be dependent on someone else,” said one former senior executive at Tesla who declined to be named. “And for better or worse — sometimes better, sometimes worse — he thinks he can do it better, faster and cheaper.”

Tesla has battery production partnerships with Panasonic, South Korea’s LG Chem and China’s Contemporary Amperex Technology Co. Ltd. (CATL) that are expected to continue.


  • Investors awaiting ‘Battery Day’ announcements on Sept. 22.
  • Musk has hinted at significant new battery developments.
  • Partners and acquisitions have helped give Tesla an edge.

But at the same time, Tesla is moving to control production of cells — the basic component of electric vehicle battery packs — at highly automated factories, including one being built near Berlin, Germany and another in Fremont, California where Tesla is hiring dozens of experts in battery cell engineering and manufacturing.

“There has been no change in our relationship with Tesla,” Panasonic said in a statement provided by a company spokeswoman.

“Our relationship, both past and present has been sound. Panasonic is not a supplier to Tesla; we are partners. There’s no doubt our partnership will continue to innovate and contribute to the betterment of society.” Tesla did not respond immediately to a request for comment.

Since he took over the fledgling company in 2004, Musk’s goal has been to learn enough — from partnerships, acquisitions and talent recruitment — to bring key technologies under Tesla’s control, people familiar with Tesla’s
strategy said.

They said the aim was to build a heavily vertically integrated company, or a digital version of Ford Motor Co’s iron-ore-to-Model-A production system of the late 1920s. 

“Elon thought he could improve on everything the suppliers did — everything,” said former Tesla supply chain executive Tom Wessner, who is now head of industry consultancy Imprint Advisers. “He wanted to make everything.”

Batteries, a big chunk of the cost of an electric car, are central to the Musk method. While subordinates have argued for years against developing proprietary Tesla battery cells, Musk continues to drive toward that goal. “Tell him ‘No,’ and then he really wants to do it,” said a third former Tesla veteran.

The changes in battery design, chemistry and production processes Tesla expects to reveal next week are aimed at reworking the math that until now has made electric cars more expensive than carbon-emitting vehicles with combustion engines.

Tesla is planning to unveil low-cost batteries designed to last for a million miles. 

Tesla is also working to secure direct supplies of key battery materials, such as nickel, while developing cell chemistries that would no longer need expensive cobalt as well as highly automated manufacturing processes to speed up production.

Panasonic is partnered with Tesla at the $5 billion Nevada “Gigafactory,” while CATL and LG Chem supply cells to Tesla’s Shanghai factory, where battery modules and packs are assembled for its Model 3 sedan.

Panasonic recently said it is planning to expand its production lines in Nevada, which supply the cells that then go into the battery modules assembled next door by Tesla.

But the Nevada Gigafactory partnership almost didn’t happen, according to two former Tesla executives. Musk ordered a team to study battery manufacturing in 2011, according to one former executive, but eventually partnered with Panasonic in 2013.

Now, Tesla is testing a battery cell pilot manufacturing line in Fremont and is building its own vast automated cell manufacturing facility in Gruenheide in Germany.

The roller-coaster relationship with Panasonic mirrors other Tesla alliances.

During its development alliance with Germany’s Daimler, which was an early investor in Tesla, Musk became interested in sensors that would help to keep cars within traffic lanes.

Until then the Tesla Model S, which Mercedes-Benz engineers helped to refine, lacked cameras or sophisticated driver assistance sensors and software such as those used in the Mercedes S-Class.

“He learned about that and took it a step further. We asked our engineers to shoot for the moon. He went straight for Mars,” said a senior Daimler engineer said.

Meanwhile, an association with Japan’s Toyota, another early investor, taught him about quality management.

Eventually, executives from Daimler and Toyota joined Tesla in key roles, along with talent from Alphabet Inc’s Google, Apple, Amazon, Microsoft, as well as rival carmakers Ford, BMW and Audi.

Some relationships did not end well, however.

Tesla hooked up with Israeli sensor maker Mobileye in 2014, in part to learn how to design a self-driving system that evolved into Tesla’s Autopilot.

“Mobileye was the driving force behind the original Autopilot,” said a former Mobileye executive, who declined to be named.

Mobileye, which is now owned by Intel, also recognized the risk of sharing technology with a fast-moving startup like Tesla, which was on the brink of collapse at the end of 2008 and now has a market value of $420 billion.

US tech firm Nvidia followed Mobileye as a supplier for Autopilot, but it too was ultimately sidelined.

In addition to partnerships, Musk went on an acquisition spree four years ago, buying a handful of little-known companies — Grohmann, Perbix, Riviera, Compass, Hibar Systems — to rapidly advance Tesla’s expertise in automation. Maxwell and SilLion further boosted Tesla’s ability in battery technology.