A man stands at an oil terminal at Fujairah, in the United Arab Emirates.Photo: Karim Sahib / AFP
An oil terminal at Fujairah, in the United Arab Emirates. The UAE will host COP28 in November 2023. Photo: AFP / Karim Sahib

There are growing hints the United Arab Emirates may announce a net-zero carbon-emissions target ahead of the COP26 climate conference in November. Saudi Arabia also may agree to a carbon-neutral goal for around 2050, according to the US climate envoy, John Kerry. So should Gulf oil producers truly commit to carbon neutrality, and if so how would they get there?

At first encounter, even asking the question seems bizarre. The region remains the world’s premier locus of hydrocarbon exports, the foundation of its economy. But the global winds are changing.

By the end of last year, more than two-thirds of the global economy had set, or had planned to set, net-zero targets, mostly around 2050, or 2060 in the case of China. As record heatwaves sweep the Middle East and North America, eliminating net greenhouse-gas emissions is necessary to keep global industrial-era temperature rises below 1.5 degrees Celsius by the end of the century.

Still, setting a target could be aspirational and not much more, a sign of concordance with other leading countries. But even that would send an important signal to those fossil-fuel exporters that have lagged on the issue of climate change, notably Russia and Australia.

To be somewhat cynical, if others do not achieve their goals, any shortfall from the Gulf Cooperation Council bloc will be overshadowed. If they do meet them, much of the GCC’s hydrocarbon economy will be obsolete anyway.

That said, a really effective target for the GCC, backed up by concrete goals and intermediate milestones, would help prepare the bloc’s entire domestic and export economy for three decades of total reinvention. That would require intermediate targets for 2030 and 2040, such as that of the European Union, which is to cut 2030 emissions by 55% versus 1990.

The concern is that the whole plan will quickly become infeasible if emissions are still rising by 2025 or 2030. The UAE’s nuclear-power plan, its single largest low-carbon investment, took 13 years from conception to first generation of electricity. Fewer than three such cycles remain by 2050.

The first GCC country to commit to a net-zero carbon goal would certainly be taking a big risk: of moving prematurely away from hydrocarbons while prices are still high and when reserves underground are enormous.

But it would also be getting ahead of the game. Some competitors already are offering carbon-neutral oil and LNG (liquefied natural gas) cargoes, reducing associated emissions as far as possible, then paying for “offsets” to neutralize the rest. Oman, in partnership with Shell, sent the Middle East’s first carbon-neutral LNG shipment in June.

Of course, reaching net-zero carbon would not mean stopping the extraction, use and sale of oil and gas entirely. But oil output in particular would fall precipitously. The International Energy Agency’s plan for net-zero by 2050, albeit not the only possible route, sees OPEC oil production, mainly from the GCC and its neighbors, falling to 12.5 million barrels per day, from current capacity of some 35mbpd.

The remaining oil and gas output would mostly be employed in non-emitting uses – with carbon capture and storage, or as feedstock for long-lived materials such as plastics. Any residual emissions would be mopped up by direct removal of atmospheric carbon dioxide, or by planting trees and other biological methods.

There is going to be enormous competition for a limited amount of “negative emissions,” given all the users who will not have managed to eliminate their emissions or will regard them somehow as essential or unavoidable.

The leading countries in such a plan would avoid locking in high-carbon infrastructure, and would encourage and enable people and companies to reorient their skills and strategies. There would be a clear direction for research and investment in startups and new technologies.

Such a strategy would help protect the economy against the increasingly likely prospect, in the EU and probably the UK, the US and others, of border carbon tariffs, designed to penalize imports from countries without strict carbon-reduction policies.

But what would the components of such a plan be? The electricity and desalination sector would be the easiest target, though still challenging.

The UAE’s national energy strategy already plans for renewables and nuclear power to be half of generation capacity by 2050. This share would have to increase, and be paired with batteries and other storage options for nighttime electricity demand.

Wind power would complement solar across parts of Oman, Kuwait and Saudi Arabia. Any remaining gas- and coal-fired plants would use hydrogen or be fitted with carbon capture and storage. Expansion of the GCC power grid, and connection to neighbors, would help balance variable renewable output across days and seasons.

Ground transport would need to move away from gasoline and diesel power toward better “walkability,” “cyclability,” metro and railways, and electric cars. Ships would need to be converted to electric propulsion for short distances, and to use synthetic fuels made from hydrogen for ocean-going vessels.

The GCC’s large aviation industry would need to find solutions – probably again, batteries for city hops, and biofuels or hydrogen derivatives for long-range aircraft. Such planes and their fuels do not yet exist, and international cooperation will be essential.

Oman, Saudi Arabia and the UAE already are moving ahead with ambitious hydrogen ventures, including the alliance among ADNOC), Mubadala and ADQ in Abu Dhabi. Along with renewable electricity, hydrogen will become the essential multi-purpose fuel, as well as an export industry partly to replace oil and gas.

It would also mean cleaning up heavy industry, particularly refining, petrochemicals, and iron and steel. Cement plants would need to turn to carbon capture.

Energy use would need to become much more frugal by ending what remains of subsidies, by improving design and construction, by thoroughly insulating and shading buildings, by using passive cooling systems and by retro-fitting existing structures. Urban planning must be rethought for livability, climate resilience and low-carbon living.

Putting a price on carbon emissions, comparable to the practice in Europe, where prices recently reached records of more than €50 (US$59) per metric ton, would reward low-carbon technologies and behavior.

To eliminate the residual emissions, the planting of trees, as ambitiously outlined by Saudi Arabia in May, and the restoration of mangroves, would soak up carbon in natural ecosystems. The Persian Gulf region could become a center of direct air capture, with fleets of solar- and wind-powered machines sucking carbon dioxide from the atmosphere and injecting it underground.

Oman could soak up more than a billion metric tons of carbon dioxide by reacting it with the minerals in its famous mountains. These negative emissions are another source of value for the Gulf region.

The sheer scale and pace of the required changes are daunting. But that is all the more reason to forge ahead. The challenge is colossal for every country, and may seem especially challenging for the Gulf region, since it also demands a complete reinvention of the economy.

For even tremendous success in hydrogen, renewable electricity export and carbon capture will not come close to replacing oil and gas rents. A new productive economy must emerge on the foundations of the old.

Yet in some ways, eliminating the Gulf’s domestic emissions is easier than for many other countries. Net-zero may not be achieved by mid-century, but it will be far better for the climate and for each nation to be two-thirds there, rather than nowhere.

This article was provided by Syndication Bureau, which holds copyright.

Robin Mills

Robin Mills is CEO of Qamar Energy and author of The Myth of the Oil Crisis.