Energy transition begins at home with Saudi Green Initiative
The Saudi Green Initiative — to be unveiled with fanfare today — will hammer home the message that the Kingdom will carry into the 2021 UN Climate Change Conference in Glasgow next month: That hydrocarbons will be a vital part of the global energy mix for decades to come, but that the transition to cleaner sources of energy is under way and has to be given urgent support — for the good of the Kingdom and of the world.
The SGI will be an opportunity to underline Saudi Arabia’s green credentials, and to point out to a sometimes skeptical world that it is possible to be the biggest producer of oil on the planet, and at the same time be among the leaders of the campaign to combat global warming.
Indeed, the Kingdom’s long-standing expertise in energy gives it distinct advantages in that campaign. It knows that oil and gas are the most powerful fuels mankind has ever developed, but also knows that the effects of irresponsible use can have negative economic and environmental effects.
The Vision 2030 strategy recognizes that fact. The aim is to wean the Saudi economy off its dependence on oil while continuing to provide the global economy with the hydrocarbon fuels it needs during the transition.
Of course, a significant amount of the Kingdom’s hydrocarbons can be diverted to non-fuel uses, principally in the petrochemical industry. This has been a feature of Saudi industrial strategy for some time, and was given a significant boost in the merger between Saudi Aramco and SABIC. Saudi Arabia is now a major force in the global chemicals industry.
But it is the other side of the hydrocarbon equation that will be on show at SGI. The Kingdom will want to demonstrate that, in addition to using oil for non-fuel purposes, it can also mitigate the greenhouse gas (GHG) emissions that come from hydrocarbon industrial processes and from power generation.
It will start by announcing new goals for GHG emissions reduction. Saudi Energy Minister Prince Abdulaziz bin Salman told a forum in Moscow recently that there would soon be a “staggering” cut in Saudi emissions, and the SGI will put some hard numbers to the new targets.
That should help Saudi Arabia answer the criticism from some environmentalists that it — and some other countries like China, India and Brazil — are not taking seriously the nationally determined contributions (NDC) set by the Paris Agreement. By playing its full part in the global NDC bargain, the Kingdom will serve as a leader to other hydrocarbon producers.
Other elements of the SGI have already been made public. Launching the initiative in March, Crown Prince Mohammed bin Salman committed the Kingdom to the ambitious target of phasing out liquids (oil) from domestic power generation entirely by 2030, when 50 percent of Saudi needs will come from renewables and the rest from natural gas.
For an economy and society that has in the past grown accustomed cheap and abundant supplies of oil for power generation, that is indeed a high goal, and a signal to the rest of the world that Saudi Arabia is serious. The energy transition begins at home.
Other pillars of SGI are equally ambitious. Perhaps the most eye-catching item on the agenda is the plan to plant 10 billion trees in the Kingdom over coming decades, as part of the wider Middle East Green Initiative that will see 50 billion trees planted across the region.
Given the sheer scale of this plan, some skepticism was inevitable. The SGI event will be the opportunity to explain the complex logistics of such a tree planting program in the arid Middle East, as well as the benefits in terms of CO2 reduction.
The SGI will also focus on the technology needed for transition to a cleaner world. Carbon capture, utilization and storage technologies have been a focus of Saudi innovation and R&D for some time, but the SGI will be an opportunity to explain the latest advances.
Similarly, direct air capture, the physical removal of CO2 from the atmosphere, is a technology that requires massive financial investment. Details of this, and other investment strategies to accelerate the transition to renewables, like wind and solar, and alternative fuels like hydrogen, could also be unveiled at SGI.
• Frank Kane is an award- winning business journalist based in Dubai. Twitter: @frankkanedubai