Gulf states push for net zero but warn ‘we can’t just switch off the tap’6 min read

The next time Saudi Arabias energy minister goes shopping for a car, one thing is clear — it “certainly” won’t be electric.

The Gulf state is the world’s largest exporter of crude oil and “as a minister of energy in Saudi Arabia, I have to be faithful to my beliefs”, said Prince Abdulaziz bin Salman at a green energy conference in Riyadh. He added one caveat. “However, the country will be manufacturing electrical cars . . . you have to keep your options open.”

Prince Abdulaziz’s answer makes clear the ambivalence of oil-rich Gulf exporters, some of the world’s largest emitters of greenhouse gases, as they pledge to cut their emissions. Ahead of COP26 in Glasgow, both Saudi Arabia and the United Arab Emirates committed to reaching net zero by 2060 and 2050, respectively.

The desert states, themselves highly exposed to the impact of global warming, are investing billions into solar, wind and hydrogen power in an effort to become world leaders in clean energy. But they also insist that they need to pump more oil to keep their economies afloat and have the financial resources to invest in new energies.

“They’re telling us, ‘We need to fight climate change, but we want oil and gas to remain part of the mix’. They want to shape the conversation. A world that shifts to renewables and electrifies everything is a disaster for petrostates,” said Jim Krane, of Rice University’s Baker Institute.

In a virtual speech addressing the G20 summit in Rome, Saudi Arabia’s King Salman pledged to develop clean energy. But, in remarks carried by the state news agency, he said the kingdom would continue its leading role in “achieving security and stability in energy markets”.

In joining the host of nations pledging to cut carbon emissions to almost nothing and offset the remainder, the UAE is acting as a “responsible global citizen”, Mariam Almheiri, the UAE’s minister of climate change and environment, told an Atlantic Council webinar last week.

But “this is a transition, we can’t just switch off the tap”, she added. “As we ramp up clean and renewable energy, we will also be ramping down oil and gas production — but at the moment there is still a global need, so we will still be supplying.”

Saudi King Salman bin Abdulaziz gives a virtual speech during the G20 leaders summit in Rome, Italy © Bandar Algaloud/Saudi Royal Court/Reuters

For Gulf states eager to cut emissions, the scale of the task is enormous. With a population of just 34m, Saudi Arabia is the world’s fourth-largest oil consumer. It relies on oil-related liquids and gas to fuel its power stations and desalination plants, and produce heavily subsidised electricity. Qatar, Kuwait, the UAE and Bahrain comprise the globe’s top four carbon emitters on a per capita basis.

While sales of electric vehicles in the UAE are growing at about a third a year, boosted by free charging and parking, in general the region mostly remains true to its stereotype of outsized SUVs, cavernous, air-conditioned malls and subsidised fuel. Despite recent cuts in subsidies, fuel in Saudi Arabia is about 60 cents a litre or $2.20 a gallon.

“Throttling all those emissions down to zero is going to be a very heavy lift,” said Krane. “It’s going to take a top-to-bottom overhaul of the economy and in local attitudes towards energy.”

Saudi Crown Prince Mohammed bin Salman, who has put renewables at the heart of his plan to reform the kingdom’s economy, has pledged to spend $187bn to meet the net zero target, outlining plans to plant 10bn trees in the kingdom, as well as 50bn across the wider Middle East.

But with only 10m trees planted in Saudi Arabia between October 2020 and April 2021, Li-Chen Sim, a non-resident scholar at the Middle East Institute, described this project as “a very tall order”.

“The devil is in the detail — neither of them (Saudi Arabia and the UAE) released a detailed pathway of how to achieve net zero, with no short-term targets by year. So it is very hard to see if they have developed credible plans,” said Sim.

The UAE has said it will release detailed planning on its path to net zero next year. The plan should involve a combination of doubling down on renewable energy, developing hydrogen as a clean energy source, reducing consumption and boosting carbon capture. With three of the world’s largest solar parks, its latest forecast — which is likely to be upgraded soon — was to source 20 per cent of its electricity from renewable energy by 2030 and 44 per cent by 2050, up from at least 7 per cent now.

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Saudi Arabia, a relative laggard in the renewables race, has committed to a target of deriving half of its electricity from renewable sources by 2030 — up from what was estimated in 2018 to be about 0.04 per cent. The kingdom is also focusing on the development of hydrogen as a new energy source, with a target of 4m tonnes a year by 2030.

The region does have some advantages in its battle to reduce emissions. Its carbon intensive industries, such as refineries and desalination plants, are clustered near large oilfields that could become depositories for carbon storage.

“Capturing and gathering those emissions and piping them to a nearby oilfield is pretty simple, and way cheaper than it would be in most countries,” said Rice University’s Krane. “These guys already know how to do this because it involves the same technology that the oil business uses.”

Despite the slow progress, Prince Abdulaziz remains bullish on future prospects. The Arabian peninsula’s geography has provided the kingdom with the lowest-cost solar and wind power, he said. “We are going to be producing the cheapest electricity on planet earth. Period.”

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