Growing GCC ownership of electric vehicles bodes well for a zero-emissions future

Special Consumers in the GCC region are drawn to electric vehicles for their advanced engineering. (Madinah Municipality)
Consumers in the GCC region are drawn to electric vehicles for their advanced engineering. (Madinah Municipality)
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Updated 03 May 2022

Growing GCC ownership of electric vehicles bodes well for a zero-emissions future

Growing GCC ownership of electric vehicles bodes well for a zero-emissions future
  • Regional consumers drawn to electric vehicles for their advanced engineering and lower carbon emissions
  • Surge in the popularity of EVs is bringing GCC trends closer to those reigning in Western markets

DUBAI: Among the many industries facing pressure to make fundamental changes to their production processes is the automobile sector, a major emitter of greenhouse gases blamed for global warming.

Once in use, a typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year, according to the US Environmental Protection Agency.

This assumes the average gasoline-driven vehicle on the road today has a fuel economy of about 22 miles (35.5 kilometers) per gallon (4.5 liters) and drives 11,500 miles per year. Every gallon of gasoline burned adds some 8,887 grams of carbon dioxide to the atmosphere.

Such numbers raise the question of whether it is even possible for the titans of the automobile industry to significantly reduce their carbon footprints so that they can meet their environmental, social and governance criteria.

Fortunately, a surge in the popularity of electric vehicle (EV) units in the relatively affluent GCC countries is bringing the region closer to trends that characterize Western markets.

Growing by leaps and bounds over the past decade, the global electric car market was assessed to be worth roughly $105 billion in 2021 and is expected to reach $354.80 billion by 2028, according to a March 2022 report by Vantage Market Research.


Read More: Saudi Arabia’s Altaaqa and TotalEnergies to jointly develop EV charging stations


In 2021, EV car sales more than doubled to hit 6.6 million, representing close to 9 percent of the global car market and more than tripling their market share from two years earlier, the report added.

In the Middle East, interest in eco-friendly alternatives to the internal combustion engine vehicle is slowly growing as automobile manufacturers race to bring more EV models to the market every year.

Saudi Arabia aims for at least 30 percent of its cars to be electric powered by 2030, following its pledge to reach net zero carbon emissions by 2060. Last year, EV manufacturer Lucid announced a long-term plan to build the first international manufacturing plant in Saudi Arabia, targeting 150,000 vehicles per year at the King Abdullah Economic City.




Saudi Arabia is planning new electric vehicles production plants capable of building 150,000 models per year and an EV infrastructure to support them. (Madinah Municipality)

Meanwhile, the UAE is pushing for 42,000 EVs to be on its streets within the next decade. To meet the rise in demand for green mobility, the UAE opened its first electric vehicle manufacturing facility in Dubai Industrial City last month, built at a total cost of $408 million. The facility is expected to produce 55,000 cars per year.

There is strong competition for a share of the GCC region’s EV market, with brands such as Tesla leading the charge and others including BMW, Audi and Mercedes-Benz in close pursuit.

Opinion

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Noor Hajir, head of transport planning and mobility at WSP Middle East, says there are positive signals in the Gulf marketplace, with many developers, particularly those in Saudi Arabia, embracing greener alternatives and future mobility solutions such as EVs to help them achieve their future net-zero targets.

“We’re seeing a trend of private developers leveraging EV charging stations as a branding and customer incentivization tool within assets such as major malls and business districts,” she said.

Still, Hajir believes the region has a long way to go before the infrastructure required to make widespread private and public EV adoption a reality is in place.

“The Middle East may be behind the curve compared with more developed economies in providing roadside infrastructure to facilitate and incentivize widespread private EV ownership, which relies heavily on public sector endorsement,” she told Arab News.




Beyond the challenge of having enough charging stations, EVs must also tackle the region's host and arid climate. (AFP)

Dr. Hamid Haqparwar, managing director of BMW Group Middle East, said infrastructure development for EVs in the region varies from country to country, resulting in different rates of adoption across markets.

But like many other experts in the field, he believes the region’s overall direction is clear. Greener modes of transport are a key part of the sustainability visions set by governments, and mass adoption of electrified vehicles per market is “a matter of when, not if.”

Haqparwar says during the current “transition” phase the region is witnessing a wider range of EVs enter its markets, confirming that manufacturers will continue to expand their EV portfolio.

“This growth of supply, along with expansion of the required infrastructure, will gradually increase the demand in the Middle East,” he told Arab News. “I would expect EV sales to see more growth in the next five years.” 

As desirable as the viability of EVs in the Middle East market may be, it is not without its challenges.

INNUMBERS

* 33% Environmental damage caused by an automobile before it is sold and driven. 

* 3% Hybrid and EVs’ share of total new vehicle sales in KSA. 

* 8% Saudis who think EVs will be increasingly common in the future.

One of the main gaps exists in the regulatory framework, both at the base economy and local authority levels, according to Hajir of WSP Middle East.

For example, in Saudi Arabia, where EV rollout is still in its initial stages, updates to these regulatory frameworks are required to streamline certification processes and encourage uptake, she told Arab News.

Additionally, she cited global-supply chain issues and the consequent lag time in manufacturing as a major challenge currently facing vehicle manufacturers.

The delays are likely to have a knock-on effect on some of the immediate EV projects being implemented in the Middle East.

“Average procurement and delivery of EVs can take anywhere between six and 18 months,” said Hajir, pointing out that adequate implementation planning and early engagement of both operators and manufacturers need to be considered by mobility service providers.

Then there is the Middle East’s hot, arid climate, which might adversely affect the longevity of battery life in EVs. Hajir says more Middle East-centric data concerning the full impact of heat on EV batteries is urgently needed.

For this as well as many other reasons, internal combustion engines are certainly still going to be on our roads, says Haqparwar of BMW Group Middle East. In his opinion, driving will continue to be a huge part of people’s lives in the GCC.




Global sales of EVs have more than doubled to $6.6 million in 2021, according to the International Energy Agency. (AFP)

“Where other parts of the globe will see less cars on the road, this region is more likely to see new environmentally friendly models on our roads as individual mobility steps into a new era,” he said.

Haqparwar pointed out that while industry wide growth in EV sales is in line with evolving sustainability driven values of the region’s young demographic, emotional sentiments still play a major role in their purchasing decisions.

At the same time, the region’s younger generation’s growing environmental consciousness is reflected in online conversations surrounding EVs in the GCC.

Rami Deeb, marketing manager CEEMEA at Talkwalker, the industry leading consumer intelligence platform, believes that real-time data will play a critical role in the development of the regional EV industry.

The company, which tracks conversations on blogs, social media, videos, audio, forums, and reviews sites in six countries — KSA, UAE, Bahrain, Qatar, Kuwait and Oman — reports a positive trend around EVs in the GCC region over the last 13 months.




Noor Hajir (L), head of transport planning and mobility at WSP Middle East, and Dr. Hamid Haqparwar (R), managing director of BMW Group Middle East. (Supplied)

During this time, there were more than 133,000 online conversations around EVs in the GCC region, 21 percent of which have positive sentiment and revolve around government pledges to become net-zero in the near future.

Those who fall within the 25-34 age group discussed the latest technological innovations and mainly engaged with video customer reviews of EVs.

The 18-24 age group mostly shared their enthusiasm about the future and how technology companies like Apple and Sony are exploring the EV space with concept cars and 3D renders, said Deeb.

The same age group also discussed the harmful environmental impact of battery manufacturing and lithium mining.

In a study conducted in the Kingdom by the consulting firm Kearney late last year, 15 percent of the Saudi nationals polled said they intended to own an EV in the next three years, while 33 percent said the availability of more charging stations would increase their interest in buying one.

Another 23 percent said that the provision of more information and government fee exemptions could make ownership of an EV more appealing.

“GCC consumers are reacting positively to the potential of EVs in reducing carbon emissions, as well as the level of innovation they bring to the table,” said Deeb.

Simultaneously, “major car manufacturers around the world are developing a clear road map to fit their factories into an EV future and announcing their plans to only build EV cars,” he said.

In a handful of countries, several incentives are being implemented to increase consumer demand and interest, like dedicated free EV parking spaces, free toll tags, and free charging through the public EV charging network.

Given the abundance of market signals, Deeb believes the real “threat” to the industry would be any resistance to change or disregard for consumer preferences.

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Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen

Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen
Updated 13 sec ago

Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen

Saudi-Oman Investment Forum sees 13 MoUs signed as trade ties deepen

RIYADH: The Saudi-Oman Investment Forum and exhibition beginning in Riyadh on Wednesday discussed various ways and means to enhance long-term economic partnership between the two Gulf states in the investment and industry sectors.

Held under the theme “Partnership and Integration,” the four-day forum aims to build sustainable partnerships in key sectors and contribute to enhancing mutual interests between the two sides.

Saudi Arabia’s Ministry of Investment hosted a senior delegation from Oman, which culminated in the signing of 13 Memoranda of Understanding in various sectors, including biochemicals, energy, mining, financial investment, logistics, maritime transport, and information technology among others.

The agreements signed at the forum underscore the long-standing partnership between Saudi Arabia and Oman, which has accelerated in recent years with several high-level engagements.

In December 2021, Saudi Arabia and Oman announced the opening of the first land crossing between the Gulf states to promote trade exchange, while in April last year Saudi Arabia’s Minister of Investment Khalid Al-Falih met with the Chairman of the Oman Investment Authority Abdulsalam bin Mohammad Al Murshidi to explore the enhancement of investment cooperation between the two countries.

This week’s four-day forum was opened by Al-Falih with Qais bin Muhammad Al-Yousef, Omani minister of commerce industry and investment promotion, who led the Omani delegation of diplomats and business leaders.

Al-Falih stressed the importance of the private sector’s role in Oman and Saudi Arabia in pushing the wheel of development forward as an active partner and contributor to the growth of economic, investment and trade sectors in the two countries.

He affirmed that the Saudi government is keen to strengthen investment relations with Oman, noting that the volume of trade exchange between the two countries during the first half of 2022 reached SR11.39 billion ($3.03 billion).

“This forum is the embodiment of a deep relationship between Oman and Saudi Arabia, coming together under the theme of ‘Partnership.’ We have the opportunity to create a roadmap that supports businesses and investments for a prosperous future,” said Al-Falih.

Al-Yousef lauded the distinguished relations between Oman and Saudi Arabia, which resulted in an increase of 219 percent in the volume of trade exchange between the two countries until September 2022 as compared to 2021.

Alongside the forum, Al-Falih and Al-Yousef  jointly opened the maiden Saudi-Omani Industries Exhibition.

The exhibition is open to the public from Feb. 1  to 4, highlighting the strong economic relationship between both nations across several sectors, and showcasing products and services from small and medium enterprise, businesses from both sides to stimulate opportunities for investment.

Participating in the exhibition Sumaiya Abdullah AlRamdhani, CEO of the ELIF Entrepreneurship of Oman told Arab News: “This exhibition has opened for us so many lines, sharing experiences, exchanging business ideas with our counterparts from Saudi Arabia, and sharing our experiences with them, if they are interested in what we produce, our perfume. This gives us a new trade opportunity.”  

The session on Wednesday saw several presentations by both Oman and Saudi representatives.

From the Oman side, Invest in 2040 and Special Economic Zones in the Sultanate of Oman were highlighted as opportunities available to Saudi investors, while Saudi officials presented Invest in Saudi Arabia and Special Economic Cities and Zones which showcased the areas available in the Kingdom.

On the sidelines of the forum, business-to-business meetings were held between representatives of the private sector in the two countries, discussing opportunities for cooperation and partnership and reviewing available investment opportunities.


OPEC+ sticks to oil output policy

OPEC+ sticks to oil output policy
Updated 56 min 50 sec ago

OPEC+ sticks to oil output policy

OPEC+ sticks to oil output policy

LONDON/DUBAI: An OPEC+ panel endorsed the oil producer group’s current output policy at a meeting on Wednesday, leaving production cuts agreed last year in place amid hopes of higher Chinese demand and uncertain prospects for Russian supply.

Ministers from OPEC+ countries — members of the Organization of the Petroleum Exporting Countries and others including Russia — met in a virtual gathering that OPEC+ sources said lasted less than 30 minutes.

The ministers on the panel, called the Joint Ministerial Monitoring Committee, reviewed production figures and “reaffirmed their commitment” to the OPEC+ accord that runs to the end of 2023, OPEC said in a statement after the meeting.

The message was OPEC+ is staying the course until the end of the agreement and the group was on “mute mode,” a source said.

The ministers did not discuss the prospects for Chinese demand and supply from Russia, other OPEC+ sources said. Oil product exports from Russia will as of Feb. 5 be subject to a EU ban and G7 price cap.

OPEC+ agreed to cut its production target by 2 million barrels per day, about 2 percent of world demand, from November last year until the end of 2023 to support the market.

Oil fell at the start of the year but has rallied, supported by hopes that Chinese demand will rebound, although fears of global recession remain a drag on prices.

Brent crude was little changed around $85 a barrel after the JMMC meeting.


Magrabi announces new leadership structure, unveils latest mission statement

Magrabi announces new leadership structure, unveils latest mission statement
Updated 01 February 2023

Magrabi announces new leadership structure, unveils latest mission statement

Magrabi announces new leadership structure, unveils latest mission statement
  • Business group eyes international expansion and listing

RIYADH: Marking the beginning of a new chapter in its growth story, Magrabi Retail Group, the Middle East’s leading eyewear retailer, announced its newly formed leadership structure and unveiled its latest mission statement in an exclusive interview with Arab News.

While Amin Magrabi, formerly CEO, is stepping up as the chairman to lead the business forward and oversee strategic expansion goals in the region and beyond, Yasser Taher, formerly COO, is moving up to become the CEO as part of a gender-balanced C-suite.

“I am very excited by what the future holds as we see us expanding internationally and also listing the organization in the public markets,” Amin Magrabi told Arab News. 

He added: “We will also announce a new progressive board of directors in a couple of months.”

As the newly appointed CEO, Taher told Arab News that he is proud to become the first non-family member to hold this position in the history of the group. 

“We are transforming this family business to become a world-class business group. And I’m very excited about this transformation mission,” he said.

Last year, Magrabi achieved several milestones including the founding of the Lens Innovation Center based in Dubai, the first fully automated production installation in the region which aims to produce 2 million lenses a year by 2025.

Amin Magrabi, formerly CEO, is stepping up as the chairman to lead the business forward.

The company’s growing portfolio includes Magrabi, the biggest luxury eyewear chain in the region, as well as the lifestyle chain Doctor M, multiple owned brands, and a robust wholesale and distribution arm. Its retail network consists of 142-plus outlets and a growing omnichannel presence.

Magrabi seems all set to move forward now, with a strategic shift that is aligned with the group’s accelerated gender equity commitments.

With the new leadership structure firmly in place, Magrabi went on to unveil its new mission exclusively to Arab News. “We are delighted to announce the latest update, our new mission: Re-envisioning the world of eyewear to empower the lifestyles of millions.” 

“Re-envisioning entails transformation,” he explained. “It means going beyond the traditional approach, trying to unleash this industry from a very traditional setup to the way we think about it. It entails a new vision of how we look into this. This is the ‘how’ in the mission statement, the ‘what’ is the world of eyewear.” 

Magrabi added: “We look at how we can introduce new brands, new banners, new products, and services and create differentiated store concepts, online and offline proposition. This is how we look at the world of eyewear.”

Yasser Taher, formerly COO, is moving up to become the CEO. He is the first non-family member to hold this position in the history of the group. 

“The ‘why’ is to empower lifestyles,” Taher explained. “So what does this mean? We don’t want to only sell products. In reality, we want to empower our customers. We look at customer engagement with a very different approach.”

 This is an industry where consumers are not very well informed about their options and how to make the right selection, he said. 

“Hence, we wanted to empower consumers; we want to educate them. We want to simplify this industry for them to make sure that they are capable to make their own decisions and understand their options,” Taher went on to say.

The last piece of the mission, according to him, is the millions. “The millions is the ‘who,’” Taher said. “It not only implies the international expansion across different markets in different segments but it also implies corporate social responsibility and social impact programs.”

Summing it up Magrabi said that the company would like to drive home the message that Magrabi Retail Group is not a typical regional Middle Eastern company nor is it a typical family business. 

“It’s a very progressive business that wants a place for itself on a global platform and is not just about finances and numbers,” he concluded. 

“It’s about creating something truly differentiated; that is there to change an industry. And this executive transition is just part of this progressiveness as this company matures and moves from family hands to professional leadership hands.”

 


Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 

Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 
Updated 01 February 2023

Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 

Ma’aden awards Phase 1 Phosphate 3 project contract to Worley and JESA International 

RIYADH: Saudi Arabian Mining Co., also known as Ma’aden, awarded an engineering, procurement and construction management contract to Australian consultant Worley and Morocco’s JESA International for the first phase of its Phosphate 3 project. 

All sides plan on reaching a conclusive agreement regarding the EPCM contracts in the coming months, Worley noted in a statement.  

“We are pleased that Worley has been selected for providing services to Ma’aden’s Phosphate 3 development program that is expected to make Saudi Arabia one of the leading phosphate fertilizer exporters worldwide,” said Chris Ashton, CEO of Worley in the statement.  

As per the agreement, in-Kingdom services will be provided by Worley, while out-of-Kingdom services will be provided by JESA International.   

The project consists of the design and construction of new process plants in the Saudi industrial cities of Wa’ad Al Shamal and Ras Al-Khair.   

The statement also noted that the plants are part of an integrated greenfield complex that aims to generate 1.5 million metric tons of phosphate fertilizers a year.  

Implementation will take place through Worley’s offices in Saudi Arabia and India and JESA’s facility in Morocco, according to the statement.   

Ma'aden aims to complete the first phase of its Phosphate 3 complex in 2025 and the second phase in 2027, it said in its second-quarter 2022 investor presentation.  


Experts to discuss pathways for a clean, sustainable future

Experts to discuss pathways for a clean, sustainable future
Updated 01 February 2023

Experts to discuss pathways for a clean, sustainable future

Experts to discuss pathways for a clean, sustainable future
  • The IAEE conference in Riyadh to serve as a platform to deliberate on pressing challenges, strategies

CAIRO: Saudi Arabia will host the 44th International Association for Energy Economics International Conference from Feb. 4-9 to discuss the path for a sustainable future. 

To be held for the first time in the Middle East and North Africa region, the event is set to take place at the King Abdullah Petroleum Studies and Research Center in Riyadh in cooperation with the Saudi Association for Energy Economics. 

“It will be the first time the IAEE is organizing its annual conference in the MENA region, a region that has produced more than 40 percent of the world’s oil and gas over the past two decades,” Fahad Alajlan, KAPSARC president, said in a statement. 

The event will be addressing critical topics under the theme “Pathways to a clean, stable and sustainable energy future” by facilitating academic evidence-based solutions and providing a platform for productive dialogue and problem-solving capacities 

The conference is set to host over 500 delegates from over 40 nationalities to participate in 10 plenary sessions. 

In-depth topics include carbon capture, circular carbon economy, the role of hydrogen in energy transition, the impact of oil price volatility on supply and investment, and the challenges facing the power sector in the MENA region. 

The conference provides the opportunity for academia, industry, government and scientific experts to assess the evolving energy landscape to explore ideas and strategies to ensure the future of a low-carbon future. 

“Since its inception, KAPSARC has been very active in conducting critical research on energy economics and climate sustainability. The upcoming IAEE conference, hosted for the first time in the Middle East, is a wonderful opportunity to visit KAPSARC and Saudi Arabia’s capital, Riyadh,” Yukari Yamashita, IAEE’s managing director, said in a statement. 

The event will host high-level attendees featuring keynotes sessions, workshops and plenary discussions to shape policies around the climate agenda. 

On Feb. 4, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman will inaugurate the event with a keynote speech followed by a conversation with Daniel Yergin, vice chairman at S&P Global. 

Before the energy minister’s key note address, the event will host an invitation-only IAEE Council meeting followed by a Young Professionals and Scholars Day in Hilton Riyadh. 

On the second day of the event, Alajlan will give his opening remarks accompanied with Majid Al-Moneef, chairman of the board at SAEE and Jean-Michel Glachant, IAEE president. 

The first plenary session will be themed “Energy Volatility, Security, and Access.” It will outline modern energy access in rural and developing regions in line with solving the world’s problems in economic growth and prosperity. 

The second day will feature dual-track sessions titled “Energy Investments and Financing’ and ‘Energy and Trade.” 

Day three will include a plenary session titled “Pathways to Energy Transitions” to explore whether climate ambitions and energy security can be harmonized by raising the question: What realistic pathways could best meet global and regional goals and the aspirations of a just energy transition? 

It will be followed by dual sessions as track one will hold the session “Energy, Development, and Climate Change” to explore the link between economic development and environmental conservation by highlighting factors that can simultaneously ensure the pursuit of both. 

HIGHLIGHTS

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman will inaugurate the event with a keynote speech followed by a conversation with Daniel Yergin, vice chairman at S&P Global. 

The event will host an invitation-only IAEE Council meeting followed by a Young Professionals and Scholars Day in Hilton Riyadh. 

Day six will be a technical tour of the Shaybah Oil Production Facility in Rub Al-Khali, the largest extended desert in the world. 

The tour will include visits to Saudi Aramco’s Shaybah facility as well as the 637 sq. km Shaybah Wildlife Sanctuary, an Aramco-sponsored biodiversity protection area that is home to native plant and animal species. 

Track two will lead the examination of problems from technology to geopolitics to gain a more descriptive insight into the underappreciated aspect of the energy transition in a session themed “Energy, Water, Food, and Minerals Interconnections.” 

On Feb. 7, the session “Energy, Mobility, and Technology” will kick off the day to shed light on the technology and regulatory options needed to deliver these services while meeting the multi-dimensional challenges of resource use, emissions, cost and impact on the urban environment. 

The sessions will move on to explore the opportunities and challenges arising in the industry with two sessions “Energy Efficiency and Industrial Competitiveness” and “Challenges and Opportunities for the Power Sector.” 

Day five will begin with renowned economists in the panel titled “Economy and Energy Diversification in MENA.” 

The closing session will be hosted by Al-Moneef, Glachant, Fahad Al-Turki, VP of knowledge and analysis at KAPSARC, Gurkan Kumbaroglu, professor of industrial engineering at Bogazici University, Christophe Bonnery, president at the French Association for Energy Economics, followed by closing remarks from Alajlan. 

Day six will be a technical tour of the Shaybah Oil Production Facility in Rub Al-Khali, the largest extended desert in the world. 

The tour will include visits to Saudi Aramco’s Shaybah facility as well as the 637 sq. km Shaybah Wildlife Sanctuary, an Aramco-sponsored biodiversity protection area that is home to native plant and animal species. 

The event will also discuss COVID-19’s impact on energy and energy poverty and sustainable development goals in addition to shedding light on academic research and case studies. 

The 43rd IAEE Conference was held in mid-2022 in Tokyo, Japan, titled “Mapping the Energy Future — Voyage in Uncharted Territory” which discussed the impact of new geopolitical conditions and technological progress in energy markets. 

Key takeaways from last year’s event were the increase in investments in innovative solutions which was estimated to reach $209 billion by 2030, according to Fumihiko Ito, chief sustainability officer at Sumitomo Mitsui Banking Corp., and the role of global collaboration to ensure a smoother energy transition. 

Other important discussions were around the technologies that tackle carbon emissions as well as risk assessment and intervention planning.