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Oil giant Saudi Arabia pledges to achieve carbon neutrality by 2060

Highlights

Saudi Aramco, Sabic set even more aggressive 2050 target

UAE was first Middle East country to set net zero goal

Focus on renewables, carbon capture, hydrogen, low carbon fuels

Saudi Arabia, the world's largest crude oil exporter, aims to achieve net-zero carbon emissions by 2060, with more than 60 initiatives planned at an initial cost of almost $190 billion, Crown Prince Mohammed bin Salman announced Oct. 23.

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Renewables, carbon capture, utilization and storage, direct air capture, hydrogen and low carbon fuels are among the projects that Saudi Arabia will develop to help achieve the target, Saudi energy minister Prince Abdulaziz bin Salman told the inaugural annual Saudi Green Initiative forum in Riyadh.

The goal refers to emissions produced domestically and does not apply to hydrocarbons exported and combusted elsewhere.

Saudi Arabia is the world's fifth largest emitter of carbon emissions per capita at 14.59 mt/yr, according to the S&P Global Platts Atlas of Energy Transition, and has the third largest fossil fuel demand per capita.

State oil giant Saudi Aramco, along with its 70% owned Sabic petrochemicals company, set their net zero target at 2050.

"As the largest provider of energy to the world, Aramco's ambition to reach net-zero greenhouse gas emissions across our operations in less than three decades is a historic step forward that will help tackle the most pressing challenge facing humanity," Aramco CEO Amin Nasser told the forum.

The kingdom considers 2060 a realistic target to reach net zero because most technologies needed for the energy transformation won't be "mature" until 2040, the Saudi energy minister said. More time will also allow the kingdom to adjust without risking social or economic effects, he said. Saudi Arabia will not be seeking financing on any of its programs, and will support regional initiatives, he said.

Saudi Arabia's interim target is to reduce carbon emission by more than 278 mt/year by 2030, more than double the target set earlier this year, according to a government statement. The kingdom will also join the Global Methane Pledge to contribute to cutting global methane emissions by 30% by 2030, the crown prince said.

The Saudi plan follows the UAE's announcement on Oct. 7 that it aims to achieve net zero by 2050, becoming the first country in the Middle East and North Africa to set such a goal.

The UAE's program includes $163 billion in planned investment for renewables alone and comes even as the country is planning to expand its crude production capacity 25% by 2030, as well as boost its gas output to drive energy self-sufficiency.

Exports focus

In renewables, Saudi Arabia wants its power sector to get 50% of its electricity from renewables and the other 50% from more natural gas. Prince Abdulaziz noted Saudi Arabia was able to achieve a record low solar cost of 1.04 US cents/kWh.

"That record I think will be there for quite some time," he said. The kingdom also has an energy efficiency program that has reduced carbon emissions by 48 million mt/year and plans to boost that to 90 million mt/year with a focus on industry, transportation and building, which make up 90% of the kingdom's energy intake, he added.

A key focus area is cement, steel, petrochemicals and building and transport fuels. A smart metering program started in February 2020 was able to add 127,000 smart meters a day even during lockdowns in the pandemic, and was finished by March 30 this year on time, he noted.

All but 1,500 electricity customers in the country now have smart meters, he said. All street lamps and bulbs in Saudi Arabia have been changed to efficient lights.

Saudi Aramco's plans to boost natural gas capacity over the next 10 years will allow it to eliminate burning crude for power generation and use gas instead within 10 years, Nasser added. The company is building capacity in hydrogen, expanding its maximum sustained crude capacity to 13 million b/d, building renewables and processing crude to chemicals.

Investment is important in oil and gas, he said, noting that a pickup in the airline industry would be enough to close the 3 million b/d of spare capacity in the market currently.

On the petrochemicals side, Sabic aims to reduce greenhouse gas emissions by 20% by 2030, from a 2018 base, and will focus on ways to adapt processes to use renewables, invest in low carbon emitting technology and deploy green hydrogen, CEO Yousef al-Benyan said.