By staying at the forefront of technological progress, the energy sector seeks to play a proactive role in shaping solutions for the energy trilemma—balancing energy security, environmental sustainability, and economic development. This proactive stance underscores their commitment to driving progress that benefits both societal and environmental needs, positioning themselves as key contributors to a sustainable future.
The energy sector across all streams recognizes the imperative to be a solution to climate change rather than a contributor to the problem. Years of proactive research and ambitious roadmaps, particularly in hydrogen technology, initiated well before the widespread focus on decarbonization, highlight this commitment. This proactive approach has established the energy industry as a leading driver of global climate technology innovation. These efforts were prominently featured last year at COP28, the world’s largest annual climate gathering. Leaders like Dr Sultan Ahmed al Jaber, President of COP28, Chairman of Masdar, and Managing Director and Group CEO of ADNOC, emphasized the industry’s dedication with the mantra “Maximum energy, minimum emissions.”
Many argue that an inclusive energy mix is not possible without incorporating sustainable strategies within existing business models. Declining renewable electricity costs and digital technologies are driving a more widespread adoption of renewable sources for power generation, but they still only account for a quarter of global power generation—far short of the estimated 85 per cent share required by 2050 to comply with climate objectives.
Hydrogen is one of the solutions being put forward. More than 30 countries worldwide have unveiled hydrogen roadmaps, with 228 large-scale hydrogen projects announced across the value chain. Of those, 85 per cent are in Europe, Asia, and Australia. If all the projects come to fruition, total investments will exceed $300 billion in spending through 2030. The Middle East, home to some of the world’s biggest oil and gas companies, is on an ambitious hydrogen track.
The UAE’s Mubadala, ADNOC, and ADQ created the Abu Dhabi Hydrogen Alliance in 2021, aimed at establishing the country as a leader in low-carbon green and blue hydrogen in emerging and international markets. Saudi Aramco has signed an MOU with Japan’s ENEOS to develop a new hydrogen and ammonia supply chain, and Oman’s Green H Project at Duqm will supply Germany’s Uniper with ammonia. Many other such agreements and alliances continue to be built by producers in the region
The energy transition to renewables still requires massive investment in infrastructure to make grids suitable for enabling offshore wind and solar power to reach demand centers. This investment is crucial to ensure that renewable energy sources can be efficiently integrated into existing energy systems, supporting a more sustainable and diversified energy mix.
Last year, the COP28 Presidency and the Kingdom of Saudi Arabia launched the landmark Oil and Gas Decarbonization Charter (OGDC), a pioneering initiative dedicated to accelerating climate action across the global oil and gas sectors. The OGDC garnered significant industry support, with 50 companies signing on, representing more than 40 percent of global oil production. Notably, National Oil Companies (NOCs) accounted for over 60 per cent of the signatories, marking the largest-ever commitment from NOCs to a decarbonization initiative. This underscores the industry's dedication to embracing new energy technologies and driving progress toward a sustainable future.
The Charter highlighted crucial steps, including the adoption of net-zero 2050 targets by many national oil companies for the first time. There was an emphasis on stronger ambitions to limit global warming to 1.5°C. Key commitments under the OGDC included achieving net-zero operations by 2050, ending routine flaring by 2030, and reducing upstream methane emissions to near-zero levels.
Signatories committed to investing in renewable energy, low-carbon fuels, and negative emissions technologies, such as hydrogen, while enhancing transparency through improved measurement, monitoring, and reporting of greenhouse gas emissions. They aimed to align with industry best practices to accelerate emission reductions, aspiring to implement these practices collectively by 2030.
The OGDC underscored climate change as a collective challenge requiring decisive action from both energy producers and consumers. Beyond decarbonization, the initiative emphasized engagement with customers, investment in future energy systems, including hydrogen, and increased transparency. It formed a pivotal part of the Global Decarbonization Accelerator (GDA), a comprehensive framework launched at the World Climate Action Summit, guided by input from international organizations, governments, NGOs, and industry leaders across sectors.
This comprehensive approach highlights the industry's dedication to adopting and investing in new energy technologies, such as hydrogen, to support global energy needs and drive progress toward a sustainable future.
That said, cost should not deter investment. For instance, when the UAE embarked on its renewables journey in 2006, high development costs, an uncertain supply chain, and intermittency issues made it economically unfeasible to implement independent power producer projects with solar PV. The country began with a few pilot projects to gather insights, and once technological advancements reduced costs, it moved on to larger-scale initiatives. Today, renewables are not only competitive but are often undercutting conventional energy prices. This evolution underscores that with persistent innovation and strategic investment, transformative progress is achievable in the energy sector.
Badar Chaudhry
Head of Energy Sector, Mashreq
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