How the GCC countries have fared on their net-zero commitments so far

Above, attendees at the opening ceremony of the Saudi Green Initiative forum on Oct. 23, 2021, in the Saudi capital Riyadh. (AFP)
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Updated 06 November 2022
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How the GCC countries have fared on their net-zero commitments so far

  • Four out of the six Gulf states have pledged net-zero by at least 2060, with others greatly reducing carbon emissions
  • They have begun to transition to renewables, implement afforestation initiatives and adopt carbon removal projects

RIYADH: According to the UN, net-zero emissions can be achieved by balancing carbon dioxide emissions with removal or by eliminating emissions.

Net-zero emissions are also referred to as carbon neutrality or becoming climate neutral. This specific climate goal is key to reducing global warming under the 2015 Paris Agreement. The agreement calls for countries to achieve net-zero emissions by 2050.

For the oil and gas dominated Gulf Cooperation Council countries, this means translating net-zero emissions ambitions into tangible action.

Saudi Arabia

Saudi Arabia pledged to achieve net-zero emissions by 2060. The country has undertaken $1 billion in climate change initiatives as part of the Saudi Green Initiative program, which seeks to establish a regional carbon capture and storage center, an early storm warning center and cloud seeding programs as part of its efforts to create a greener future.




Saudi Arabia has committed to plant 450 million trees and rehabilitate 8 million hectares of degraded lands by 2030. (Supplied)

The Kingdom will also join the Global Methane Pledge to cut global methane emissions by 30 percent by 2030 to deliver a cleaner, greener future.

Crown Prince Mohammed bin Salman said that the Kingdom will plant 450 million trees and rehabilitate 8 million hectares of degraded lands by 2030, reducing 200 million tons of carbon emissions with additional initiatives to be announced in the years to come.

According to the King Abdullah Petroleum Studies and Research Center, the Kingdom will achieve this ambition through numerous programs and initiatives, which include energy efficiency, renewable energy, hydrogen and carbon capture, utilization and storage.




Caption

Saudi Arabia established the Saudi Energy Efficiency Center in 2010 and launched the Saudi Energy Efficiency Program in 2012.

“Since then, the program has led to many actions to improve energy efficiency. For example, insulation standards for buildings were introduced, the minimum energy efficiency levels for appliances like air conditioners were increased, fuel economy standards for cars were launched and various awareness campaigns were implemented,” Anwar Gasim, a researcher at KAPSARC, told Arab News.

Saudi Arabia launched and built several major renewable energy projects, taking advantage of its natural potential in solar and wind. For example, there is the Sakaka solar power plant, the first “utility-scale” solar power project in Saudi Arabia, with 1.2 million solar panels arranged in an area of over 6 sq. km. and a capacity of 300 MW.
“This project, which is fully operational, has set a new world record for the lowest solar power generation cost,” Gasim said.




Power efficiency is one of the central themes of Saudi Vision 2030. (SPA)

Another example is Dumat Al Jandal, Saudi Arabia’s first utility-scale wind project. “With a capacity of 400 MW, Dumat Al Jandal is the largest wind farm in the Middle East,” he added.“Furthermore, Saudi Arabia very recently announced five new renewable energy projects, with a combined capacity of 3,300MW,” he said.

Moreover, Saudi Arabian Oil Co. has been pioneering the capture and storage of carbon dioxide to enhance oil recovery from its fields. At its plant in Hawiyah, Saudi Aramco can capture 45 million standard cubic feet of the gas, which they pump and store in an oil reservoir, leading to increased oil production.

Saudi Basic Industries Corp. has built one of the largest CCUS plants, which uses the captured gas to produce liquified carbon dioxide that can be used in the food and drink industry. It also uses the captured gas to produce valuable chemicals like urea and methanol.

The Kingdom aims to become the world’s leading hydrogen producer and exporter in hydrogen production and has already taken the first step globally. Saudi Aramco and SABIC, in partnership with the Institute of Energy Economics, Japan, announced in 2020 the world’s first blue ammonia shipment from the Kingdom to Japan.

“Ammonia, a form that makes transporting hydrogen easier, is obtained by combining hydrogen with nitrogen,” Gasim said.

“The blue ammonia was shipped to Japan to be used in zero-carbon power generation,” he added.

Furthermore, NEOM announced its plans to build one of the world’s largest green hydrogen plants.

Saudi Arabia also announced its ambition to generate 50 percent of its electricity from renewables by 2030, with the remaining 50 percent coming from natural gas.

The UAE
According to the state’s government portal, the UAE was the first country in the Middle East to establish the Net-Zero by 2050 strategy, pledging to cut carbon emissions by 23.5 percent, equal to 70 million tons by 2030.

The Abu Dhabi Department of Energy announced new clean energy generation projects focusing on solar and nuclear sources to help meet these goals. In addition, the Dubai Future Council of Energy released a detailed path to establishing a carbon-free economy.

The Abu Dhabi Fund for Development has also pledged $400 million to a new energy transition program to finance renewable energy projects in developing countries that would otherwise be unable to raise funds.

The deployment and use of clean energy solutions are one of the main pillars of the UAE’s model of addressing the challenge of climate change and reducing carbon dioxide emissions. 




EGA’s CelestiAL aluminum is made using electricity generated at the Mohammed Bin Rashid Al-Maktoum Solar Park, located in the desert outside Dubai. (Supplied)

The UAE government portal reported that the country began financing clean energy projects more than 15 years ago and has invested over $40 billion in the sector to date.
Current trends predict the production capacity of clean energy, including solar and nuclear, to reach 14 GW by 2030, up from about 100 MW in 2015 and 2.4 GW in 2020.
The country has also invested in renewable energy ventures worth around $16.8 billion in 70 countries, focusing on developing nations.

It has also provided more than $400 million in aid and soft loans for clean energy projects.

Qatar
Qatar, which has the highest carbon intensity per capita in the world, reaching 34.3 tons of carbon dioxide per capita in 2021, has created a national climate change action plan to lower greenhouse gas emissions by 25 percent by 2030 and liquefied natural gas facility carbon intensity by 25 percent by the same year.
Qatar is the world’s largest producer of liquefied natural gas and aims to expand its production to 127 million tons annually by 2027.
It says its gas production helps combat climate change globally because it can help the world shift from high-polluting fuels like oil and coal to renewable energies.
The plan pledged to intensify efforts at carbon capture and storage at its gas production facilities, Reuters reported.

Kuwait

Kuwait has pledged to reduce greenhouse gas emissions by 7.4 percent by 2035.

The country estimates greenhouse gas emissions at around 142 tons of carbon by 2035, 65 percent more than in 2016. The 7.4 percent cut would limit GHG emissions by nearly 11 tons to 132 tons.

Most of the reduction in GHG emissions would come from an oil-to-gas substitution in energy production, according to Enerdata intelligence and consultant.

In 2016, fuel combustion activities accounted for 95 percent of the country’s total GHG emissions, amounting to 86 tons, followed by industrial processes and product use 2 percent and waste 2 percent.

In 2018, Kuwait implied a commitment following the Paris Agreement to transitioning to a low-carbon economy without a quantitative target, Enerdata reported.

Bahrain

Bahrain committed to net-zero emissions by 2060 and pledged a 30 percent reduction by 2035, including investments in renewable energy, carbon removal solutions and afforestation.

The state’s action plan includes an integrated strategic plan for afforestation, aesthetic landscaping and green patches in all parts of the country.

More than 120 public parks and gardens have already been constructed all over the governorates in addition to a series of construction projects underway in which it has been observed that they should satisfy the housing, urbanization needs in each region, according to the UK-based Climate Action platform.

Oman

Oman is the latest country to commit to achieving net-zero emissions by 2050, announcing its plan recently. The target involves reaching zero routine flaring by 2030 and a 7 percent reduction in emissions by that year.

According to media reports, renewable energy and energy efficiency efforts are among the country’s interim goals, aiming to generate 20 percent of its electricity from renewable sources by 2027.

In October, Oman also established the state’s Sustainability Center to supervise and follow up on zero-carbon emission plans and programs.

The 2021 UN Climate Change Conference in Paris agreement, signed by 192 countries, including Oman, requires states to balance anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, The National reported.

 


Oil Updates – crude set for weekly gain on signs of improving demand

Updated 13 sec ago
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Oil Updates – crude set for weekly gain on signs of improving demand

NEW YORK : Oil prices gained on Friday, with global benchmark Brent set for its first weekly increase in three weeks on signs of improving global demand amid stronger economic indicators from key consumers China and the US, according to Reuters.

Brent crude oil prices climbed 21 cents, or 0.25 percent, to $83.48 a barrel by 6:14 a.m. Saudi time. US West Texas Intermediate crude futures rose 7 cents, or 0.09 percent, to $79.30 a barrel.

Brent futures are set to rise about 1 percent on a weekly basis, with WTI futures set to gain 1.4 percent.

“WTI crude oil prices seem to have found a near-term floor/support at around $78.40/barrel after a 9 percent+ decline from 26 April in the past week due to several encouraging factors such as two consecutive weeks of decline in US crude oil stockpile and more upcoming ‘piecemeal’ stimulus measures from China,” said OANDA senior market analyst Kelvin Wong, referring to the country’s potential program to buy up unsold homes directly from property developers.

Markets were also bolstered by China’s industrial output growth at 6.7 percent year-on-year in April as recovery in its manufacturing sector gathered pace, pointing to possibly stronger demand to come.

Declines in oil and refined products inventories at major global trading hubs have also created optimism over oil demand growth, reversing a trend of rising stockpiles that had weighed heavily on crude oil prices in prior weeks.

Recent economic indicators from the US have fed into the optimism over global demand. US consumer prices rose less than expected in April, data showed on Wednesday, boosting expectations of lower interest rates in the country.

Those expectations were further bolstered by data on Thursday that showed a stabilizing US job market.

Lower interest rates could help soften the US dollar, which would make oil cheaper for investors holding other currencies and drive demand.

On the supply side, investors were mostly looking for direction from an upcoming OPEC+ meeting on June 1, which will likely be held online.

An extension of OPEC+ cuts in oil output beyond June is likely to see firmer prices in the medium term, said OANDA’s Wong.

ANZ analysts said in a client note: “We see three possible scenarios for the outcome of the 1 June meeting: extend, unwind or complete removal of the voluntary cuts of 2.2mb/d. Our current model is based on a gradual unwinding of the cuts in H2 2024. Even with that, we see the market moving into a deficit, with the future call on OPEC production well above current output.” 


Saudi Arabia innovating procurement, supply chains to secure prosperous future, forum hears

Updated 16 May 2024
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Saudi Arabia innovating procurement, supply chains to secure prosperous future, forum hears

  • Experts highlight Saudi Arabia’s innovative steps to transform various sectors of the economy

RIYADH: Saudi Arabia is spearheading transformative initiatives in order to enhance innovation in procurement and supply chains across various sectors, an industry forum was told.

At the Chartered Institute of Procurement & Supply’s MENA Conference in Riyadh, a series of presentations and panel discussions underscored the vital importance of ensuring the security of supply chains, boosting local content, and streamlining government procurement spending in order to pave the way for a prosperous future. 

From water desalination to real estate development, the Kingdom is leveraging advanced technologies to optimize operations and drive economic growth, delegates heard.

Transforming the real estate sector

The National Housing Co. has embarked on a journey to optimize the supply chain in the Saudi real estate sector, according to the firm’s Supply Chain and Business Support General Manager Maan Al-Othimeen.

He took to the stage to outline the organization’s strategic initiatives aimed at fostering local production efficiency and supporting small and medium enterprises in order to create the infrastructure needed to support the government’s development goals in the construction sector. 

The implications of these efforts are not limited to the construction supply chain alone, rather, they translate into a foundation on which the nation will be able to build its hospitality and giga-project goals, he said.

Beyond that, by 2030, NHC aims to deliver 600,000 housing units, further catalyzing the sector’s growth and stimulating the economy.

NHC is empowering local businesses and promoting national workforce participation by introducing new initiatives, Al-Othimeen said, adding: “In promoting local production efficiency by supporting local factories we have launched Mawad, an online platform linking contractors, real estate developers, local factories and suppliers to streamline purchases, expand choices and stabilize market prices.

“In terms of financing, we offer financial solutions in partnership with government entities, banks and financial firms to encourage local businesses, including developers, contractors and factories and improve project completion in the real estate development sector. 

“We are also building technologies through awareness campaigns while supporting local service providers.”

As a testament to its success, through the Mawad platform, the company has managed to reach over $500 million in transaction values, signed 113 memorandums of understanding with local factories, and achieved average savings of 21 percent, the general manager added. 

Moreover, NHC’s collaboration with Tawteen — Saudi Arabia’s human capital localization agency — and its focus on nurturing the next generation of workforce through initiatives like Wa’ed, demonstrates the organization’s commitment to sustainable development and talent empowerment.

Al- Othimeen added: “NHC employees undergo training and factory tours in collaboration with local manufacturing products to gain insight into product lines.”

As the Kingdom continues to embark on a journey of transformation of its hospitality, tourism and real estate sectors, it will require a strong basis for its supply chains and workforce to see it through, he noted. 

“KSA’s construction sector is projected to grow at 5.8 percent between 2023 and 2030, it is projected that the construction market value will grow from SR189 billion ($50.39 billion) in 2023, to SR281 billion by 2030. By 2030, 28 percent of this figure will be represented by hospitality, while 33 percent will be residential, 24 percent will be energy and utilities, 11 percent will be infrastructure, and 4 percent will be industrial,” he said.

In order to meet the growing demand for building materials, NHC plans to establish an industrial park specialized in the manufacturing of key building materials, the general manager added.

The industrial park will be an integrated development with three asset classes: industrial, logistic and urban class. 

Government procurement

Under the framework of Saudi Arabia’s Vision 2030, the government has implemented initiatives to enhance its procurement strategy. 

Ahmed Al-Harbi, executive director of government procurement efficiency, highlighted the significant strides made in digitalization and local content development at the forum.

This work has yielded tangible results, including cost savings and improved efficiency, Al-Harbi explained, adding: “Through all these transformations, information and data that have happened over the past years, it is a journey in the Kingdom that is still ongoing. 

“It began in 2018 through the digitization of the procurement industry which was largely made possible through Etimad, which is a unified end-to-end digital platform introduced by the government to assure efficiency and transparency, serving both the government and private sector. 

“It allows for sourcing through the Etimad e-market, government travel platform, Etimad e-auction, online tenders as well as digital contracting and an online payment platform.”

Moreover, the government’s emphasis on standardizing purchasing templates, introducing new methods, and enhancing payment processes has streamlined operations and fostered transparency in government procurement, he noted.

With transformative initiatives across key sectors, the Kingdom is poised to lead the way in procurement and supply chain innovation, driving economic diversification and sustainable development, he further explained.

A key achievement throughout the journey, according to the executive director, is an improvement of cost efficiency, with more than SR20 billion in savings witnessed by adapting category management methodology. 

Local content has also been supported through 35 industry localization and knowledge transfer agreements signed by the authority and over 1,000 items added to the mandatory list of national products, he said.

There has also been an improvement in procurement efficiency and effectiveness, with 15 percent reduction in life cycle, from tender to award, and 27 percent reduction in tenders’ cancellation rate, he added.

Al- Harbi said: “In the last three years, when we first started, there was a large amount of expenditures, we spent — compared to previous years — over SR7 billion annually in procurement spending on over 3,000 projects, and we were of course supporting over 300 government initiatives.”

 He went on: “These expenses have covered over 38,000 products and services that were provided. The number of POs (procurement orders) annually was 15,000 with over 600 procuring government entities, over 180 registered suppliers and four e-platforms.” 

Revolutionizing water desalination

The Saudi Water Authority has undertaken a comprehensive digital transformation of its supply chain operations. 

Abdulrahman Al-Yousef, general manager of shared services and supply chain at SWA, highlighted the organization’s commitment to utilizing cutting-edge technology.

“Since we operate in a vital sector such as water desalination, our focus has been on enhancing efficiency and reliability through digitalization,” stated Al-Yousef. 

“Through initiatives such as smart warehouses and automation, we have achieved remarkable results, including a 98 percent reduction in time and a 400 percent increase in storage efficiency,” he added.

SWA’s adoption of advanced analytics, artificial intelligence and Internet of Things integration has revolutionized procurement processes, reducing its lifecycle by 37 percent. 

This transformation underscores the Kingdom’s dedication to ensuring accuracy and time efficiency in critical sectors.

Moreover, SWA’s continuous investment in renewable energy sources and eco-friendly technologies has positioned it as a global leader in sustainable water management. 

With 33 production systems utilizing the latest eco-friendly technology, SWA is driving environmental stewardship while meeting the Kingdom’s growing water demands with an efficient, automated supply chain.


Saudi Arabia moves to localize mining sector professions

Updated 16 May 2024
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Saudi Arabia moves to localize mining sector professions

RIYADH: Saudi Arabia is on track to boost the localization of professions related to the mining sector thanks to a new agreement signed by the Human Resources Development Fund. 

Inked with the Saudi Arabian Mining Co., also known as Ma’aden, the memorandum of understanding aims to enhance cooperation and partnerships between the two parties to develop human capital in the sector, according to a statement. 

This move falls in line with the common goals of the two sides and aligns well with the Kingdom’s Vision 2030 in developing human capabilities and enabling them to get promising job opportunities.

It also reflects the accelerating growth of the mining sector in Saudi Arabia and globally. Under the terms of the newly signed MoU, the two sides will work to support the training and empowerment of suppliers in Ma’aden’s local content program, Tharwa, in accordance with the controls approved by the fund.

The mining firm launched Tharwa in 2022. It encompasses the company’s vision to create a wealth of resources in the Kingdom. 

The deal will also see both sides ensure that trainees receive appropriate support solutions and motivation plans.

Additionally, the agreement entails studying the possibilities for achieving sustainability in the mining and mineral wealth sector, which is vital to strengthening the national economy.

The two parties agreed to form a joint working group that includes specialists to activate areas of cooperation as well as work to prepare unified periodic reports that outline the progress in the agreed upon areas.

Ma’aden is an important figure in the field as it is the largest multi-commodity mining and metals company in the Middle East. Its manufacturing capabilities include producing phosphate fertilizers, aluminum metal, and gold.

In January, the firm secured international recognition with a certificate for producing 614,000 tonnes of ultra-low carbon ammonia, the largest quantity acknowledged globally.   

The endorsement from Det Norske Veritas at the time signified a substantial stride in Ma’aden’s plans to expand and transform its operations, aspiring to become an environmental, social, and governance role model in the Kingdom.   

This accreditation, which was received at the time, also highlighted the mining firm’s commitment to operational excellence and expanding its product range.


Closing Bell: TASI closes in green to reach 12,198 points 

Updated 16 May 2024
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Closing Bell: TASI closes in green to reach 12,198 points 

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 95.24 points, or 0.79 percent, to close at 12,198.44. 

The total trading turnover of the benchmark index was SR7.15 billion ($1.9 billion) as 81 stocks advanced, while 144 retreated.    

Similarly, the MSCI Tadawul Index increased by 17.75 points, or 1.17 percent, to close at 1,530.05. 

However, the Kingdom’s parallel market Nomu dipped by 182.13 points, or 0.68 percent, to close at 26,484.03. This comes as 21 stocks advanced, while as many as 33 retreated.  

The best-performing stock of the day was Allied Cooperative Insurance Group, with the company’s share price surging by 6.5 percent to SR21.30. 

Other top performers included ACWA Power Co. and MBC Group Co., whose share prices soared by 6.19 percent and 4.69 percent, to stand at SR459.6 and SR53.6, respectively. 

The worst performer was BinDawood Holding Co. whose share price dropped by 9.98 percent to SR8.03. 

Other subdued performers were Al-Babtain Power and Telecommunication Co. as well as Al-Baha Investment and Development Co., whose share prices dropped by 7.67 percent and 7.14 percent to stand at SR42.75 and SR0.13, respectively. 

On the announcements front, MBC Group Co. announced its interim financial results for the period ending March 31, with revenues amounting to SR1.23 million and net profits reaching SR121,28. 

The group does not have comparative figures for the current reporting period, as it was incorporated on April 20, 2023, which is subsequent to the comparative reporting period. 

BinDawood Holding Co. also announced its financial results for the same period with revenues amounting to SR1.47 billion, up from SR1.38 billion in the first three months of 2023. 

In a statement on Tadawul, the company said: “This growth was driven by exceptional performances from both retail brands (BinDawood and Danube) where sales for BinDawood stores increased by 8.5 percent compared to Q1 2023, while Danube stores increased by 7.1 percent compared to Q1 2023.”  

It added that the improvement in performance was fueled by enhanced preparations for the pre-Ramadan season and the ongoing success of the loyalty program. 

Its net profits also rose in this period reaching SR60.54 million, marking a 15.9 percent year-on-year increase, due to the rise in sales and gross margin. 

In another development, Qassim Cement Co.’s revenues in this period surged by 18.8 percent to SR196.41 million compared to SR174.07 million in the first quarter of 2023. This increase was attributed to the rise in sales volume as well as the increase in the average selling price. 

The company’s net profit surged to SR74.22 million compared to SR54.93 million in the corresponding period last year. The reason for the increase was attributed to the increase in sales value and volume, despite the increase in the general and administrative expenses.  

Arabian Centers Co.’s revenues saw a slight increase of 1.56 percent to SR585.8 million in the first quarter of this year, compared to SR576.8 million in the corresponding period in 2023. 

The rise was mainly attributed to a 21.9 percent increase in media sales and a 48.0 percent increase in other revenue. 

Its net profit decreased by 52.1 percent from SR388 million in the first quarter of 2023 to reach SR185.6 million in the corresponding period this year. 


GCC housing ministers discuss joint action in Qatari capital

Updated 16 May 2024
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GCC housing ministers discuss joint action in Qatari capital

RIYADH: Gulf Cooperation Council countries are set to have better coordination in their housing projects as top ministers met in Doha to discuss the Joint Housing Action Plan for 2024. 

Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail headed the Kingdom’s contingent at the 22nd meeting of the GCC Housing Ministers Committee in the Qatari capital, where leaders deliberated over key housing issues and made multiple decisions.  

These included the approval of the Real Estate Incentive Guide, which aims to link landowners with developers and financial entities.  

They also approved the guide for evaluating the flexibility of cities in the field of housing in GCC countries, as well as the economic framework for partnership with private institutions to encourage investment in the real estate sector. 

The meeting also announced the launch of the sixth edition of the GCC Housing Work Award under the theme “Smart Digital Applications and Technologies in Housing Projects and Programs.”  

The monetary value of the award was increased to SR375,000 ($99,987) instead of SR100,000, emphasizing the importance of ministries and relevant institutions in the Gulf countries promoting the new award cycle to expand participation. 

Ministers emphasized the importance of continued participation in regional and international activities and meetings related to accommodation to showcase the region’s efforts. 

The UAE was nominated for membership in the Executive Bureau of the Asian-Pacific Assembly and the upcoming presidency of the UN Human Settlements Programme General Assembly. Additionally, the committee highlighted the necessity of activating the mechanism for exchanging experts among GCC countries. 

Furthermore, discussions were held regarding the General Secretariat’s proposal to sign agreements with various specialized organizations serving the residency sector, including the International Federation for Housing and Planning and the International Housing Association. 

Following the meeting, the dignitaries toured the accompanying exhibition, where the ministries in the Gulf countries showcased their prominent efforts and projects through their participating pavilions. 

At the end of the tour, Qatar’s Minister of Social Development and Family Mariam Al-Misnad honored the GCC ministers.