COP28: UAE presidency gives oil a seat at the climate table as summit opens

COP28 President Sultan al-Jaber unapologetically pledged to "proactively engage" with oil and gas companies for the duration of the UN climate change negotiations, which kicked off Nov. 30 in Dubai, brushing aside criticism of his industry background and advocacy for fossil fuels.

Jaber, who has faced a barrage of negative headlines over his concurrent role as the CEO of Abu Dhabi National Oil Co., said in his opening speech to the COP28 summit that it was vital fossil fuel companies be included in talks to tackle emissions and shift fuel demand.

But, in lauding many Middle East oil companies for their net-zero targets and methane abatement programs, he also called on them to redouble their efforts to green their industry.

"I must say, it is not enough, and I know that they can do more. They can lead the way, and others must catch up," said Jaber, who described his "many hard discussions" with oil companies.

In addition to being the head of ADNOC, the 50-year-old is also CEO of UAE renewables firm Masdar and the country's minister for industry and advanced technology.

The UAE's position as a significant oil and gas producer and Jaber's role in overseeing its development have been prominent themes in the lead-up to COP28, with many policymakers and climate activists decrying the presence of the industry at the climate talks.

But Jaber insists he and his presidency took a bold decision to engage with this sector, which has been traditionally shunned.

The phasing out of unabated fossil fuel consumption is considered the most contentious issue to be discussed in Dubai, with the prospect of a breakthrough in wording still seen as unlikely by many. The oil industry has said the focus of any climate agreement should be on addressing emissions, without discriminating against any fuel.

Jaber urged countries to be flexible and take "unprecedented" decisions, including the need for clarity on the future of fossil fuels.

"I know there are strong views about the idea of including language on fossil fuels and renewables in the negotiated text," Jaber said.

'New energy system'

The United Nations Framework Convention on Climate Change has also been very vocal in its view on fossil fuels.

Simon Stiell, executive secretary at UNFCCC, who spoke right after Jaber in the COP28 opening ceremony, was blunt in his remarks, saying the world needs to "commit to a new energy system."

"If we do not signal the terminal decline of the fossil fuel era as we know it, we welcome our own terminal decline," he added.

The UNFCCC has repeatedly reiterated that phasing out fossil fuels is urgently needed for the world to meet its Paris Agreement commitments of limiting warming to 1.5 degrees Celsius above pre-industrial levels.

A day earlier, the US's chief climate envoy John Kerry urged oil and gas producing nations to commit to a phaseout of unabated fossil fuels at the climate talks, with the US and the EU pushing for a 2050 deadline.

The phaseout would refer to coal, oil and gas consumption without the capture, utilization or storage of emissions, and it has been a major sticking point at every COP summit. Besides fossil fuel industry resistance, major emerging economies such as China and India have also pushed back against limits or restrictions on their energy use.

"We still have people who have not signed up to that," Kerry said in a briefing with reporters. "They are some of them among the major producers of fossil fuels, and they need to immediately step up and be part of the solution, not the most significant part of the problem."

Down or out

The COP28 negotiations also come at a volatile time for oil and gas prices, and the opening day coincided with a meeting between OPEC and its Russia-led allies to set crude production quotas beyond 2023.

Platts Dated Brent, the world's main benchmark for physical crude oil trading, has ranged between $77-$97/b in the past three months as weak demand indicators but also rising geopolitical tensions have caused prices to fluctuate, data from S&P Global Commodity Insights showed.

Platts assessed Dated Brent at $82.28/b on Nov. 28.

Analysts at S&P Global Commodity Insights said that discussions around the future of fossil fuels are likely to further highlight differing views between developed and developing economies.

"The highest emitting markets are divided on whether a pledge to abate all fossil fuels is appropriate at this time," they said in a recent note. "Negotiations will likely depend on whether countries can reach a compromise regarding phraseology, [and] the success of the proposal is very likely going to hinge on discussions around climate finance."

At 2021's COP26 climate talks in Glasgow, leaders failed to agree on phase-out wording for coal in the final communique, as China and India forced a last-minute softening to a coal "phase down" without timelines.

Many environmentalists are worried a similar compromise could be made in Dubai. It will be up to Jaber and his presidency to deliver a result that can keep all parties satisfied, when the summit ends on Dec. 12.