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Saudi Arabia Sets 2060 Net-Zero Target

Copyright © 2021 Energy Intelligence Group
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Saudi Arabia, the world's largest oil exporter, has committed to a net-zero carbon emissions target by 2060, making it the second Opec member and Mideast Gulf economy to adopt such a target.

The announcement, made at a climate conference in Saudi Arabia, comes just a week before world leaders are due to gather for the crucial COP26 climate change summit in Glasgow from Oct. 31 to agree on speeding up global climate action.

The Saudi initiative also comes just a few weeks after the United Arab Emirates (UAE) became the first Mideast hydrocarbon exporter and Opec member to announce a net-zero target, to be achieved a decade earlier by 2050.

Energy Intelligence reported earlier this month that the UAE's declaration was likely to put pressure on other Gulf states to make similar commitments.

Shortly after the Saudi announcement Bahrain also said that it would target zero-carbon emissions by 2060, Bahrain's state news agency reported.

Circular Carbon Economy

"We announce today the kingdom is aiming to reach net zero by 2060 through a circular carbon economy approach," Saudi Crown Prince Mohammed bin Salman said at the opening of the climate conference in Riyadh on Saturday.

It would seek to do so "in a way that's compatible with the kingdom's development plans and enables its economy to diversify ... while maintaining the kingdom's leading role in strengthening security and stability of global oil markets," he added.

The kingdom's Saudi and Middle East "green" initiatives represent planned investments of more than 700 billion Saudi riyals ($187 billion).

They seek to create more opportunities for the private sector and more jobs for Saudis, in line with the crown prince's "Vision 2030" economic reform program.

"The Saudi Green Initiative will provide huge investment opportunities for the private sector, quality job opportunities for the next generation of leaders in the kingdom and enhanced international relationships that will have a positive impact on the region and the world," Prince Mohammed said.

Details of the plan and how it will be realized remain scarce for now.

"The year 2060 is a long way off … I am more interested in what they will do in the next 10 years leading to 2030," said Robin Mills, chief executive of Qamar Energy, an energy consultancy in the Gulf.

"In this context they made commitments to cutting emissions. It looks doable — methane leaks, efficiency, cutting emissions, renewables. If they invest and try hard it's doable. Beyond 2030, then maybe it starts getting harder," Mills added.

Climate Diplomacy

The Saudi announcement comes amid plans for the US special presidential climate envoy, John Kerry, to visit Riyadh this week to discuss the kingdom's climate initiatives with officials.

Like the UAE's announcement, Saudi Arabia's was well received by the international community. UN Secretary-General Antonio Guterres, in a phone call with Saudi King Salman, welcomed the initiatives announced by the kingdom.

Given Saudi Arabia's keenness to maintain the value of its crude oil resources for decades to come, skeptics have questioned the kingdom’s real commitment to a net-zero target.

But during the Saudi Green Initiative Forum on Saturday, the kingdom’s energy minister, Prince Abdulaziz bin Salman, said that technologies for renewable energy would not mature until 2040, making it necessary to adapt different approaches to achieving net-zero emissions.

China, Russia and Saudi Arabia are now all aligned in their aim to reach net zero by 2060, while the US, UK and UAE all plan to reach that target a decade earlier.

Energy Market Stability

Energy Intelligence understands that, behind the scenes, Saudi Arabia has been lobbying hard to stress the importance of fossil fuels in the global energy mix and the need to continue investment in the upstream sector.

Prince Mohammed said that the newly announced net-zero target will be achieved without affecting the "stability of global energy markets."

Topping off the stream of ambitious announcements, Saudi Aramco CEO Amin Nasser said the world's biggest oil company was aiming to achieve net-zero emissions by 2050.

"We understand the road will be complex and this transition will have challenges, but we're confident we can meet them and accelerate our efforts to a low-emission future," he told the forum.

Aramco plans to disclose further details of the initiative in its forthcoming sustainability report to be published in the second quarter of 2022.

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