This year, when Crown Prince Mohammed bin Salman announced Saudi Arabia’s “green initiative,” he made a compelling promise that has become a feature of the young royal family’s grand plan to modernize the kingdom.
Prince Mohammed promised that the world’s largest oil exporter will lead the “next green era” and vowed that by 2030, 50% of Saudi Arabia’s electricity generation will be provided by renewable energy, and the other 50% will be provided by natural gas. In the coming decades, Riyadh will plant 10 billion trees in this desert country.
“As the world’s leading oil producer, we are fully aware of our responsibilities in advancing the fight against the climate crisis,” said the prince when he announced the plan in March. “And as [with] We have played a pioneering role in stabilizing the energy market in the oil and gas era, and we will take action to lead the next green era. “
But like many of the prince’s ambitious plans, skeptics question whether his words will match the actual actions on the ground. Saudi Arabia burns about 1 million barrels of oil equivalent a day to fuel its power system, a number that rises sharply in the hot summer when Saudis rely on air-conditioning to keep them cool.
The Climate Action Tracker, an independent research organization, rated Saudi Arabia’s climate commitments as “seriously inadequate” on the grounds that it lacked clear policies or data on its emissions.
“It is unclear how they actually achieved these goals [climate goals], It’s not very transparent at all,” said Mia Moisio, an analyst at the New Climate Institute, which helps collate data from the Climate Action Tracker. “I’m [the kingdom’s] announcement. .. There is no reason why it is impossible in Saudi Arabia. But the inertia is great. ”
Riyadh stated in its 2015 emission reduction plan that it would reduce 130 million tons of greenhouse gas emissions by 2030, but it did not outline how to do this.
According to several people involved in the discussion, in negotiations with scientists, Saudi officials opposed some of the language in this month’s landmark UN climate report, hoping to replace “carbon emissions” with “greenhouse gas emissions”.
According to the International Institute for Sustainable Development, Riyadh also requested that the term “net zero” be removed from several parts of the report summary, but it was unsuccessful because it was “policy-prescriptive.”
Saudi officials insist that the government is committed to action, saying that Riyadh’s opposition to the use of carbon emissions in part of the UN report is related to their argument that in order to address the climate goals of the Paris Agreement, including net zero, “we really need to look at the greenhouse In the gas, it is not only carbon dioxide”.
Officials said that this hydrocarbon-based kingdom has made great progress since it put climate change on the national agenda in 2015, and Prince Mohammed promised to ease the economy’s dependence on oil.
“Now we are much more comfortable, at that time we had a very big question mark,” a senior Saudi official told the Financial Times. “But the progress we have made since then is amazing.”
Three years ago, Riyadh took a politically sensitive move, doubling gasoline prices and raising utility electricity prices, partly to increase revenue, but also to improve energy efficiency. It also issued multiple statements on renewable energy projects, including ambitious plans to create the world’s first zero-carbon city The Line in Prince Mohammed’s flagship mega project Neom, which aims to be powered by hydrogen.
In 2018, he announced the establishment of a US$200 billion joint venture with Japan’s SoftBank to develop the world’s largest solar project. But a few months after the announcement, the public investment fund chaired by the prince was forced to issue a statement denying that the project had been shelved. In the following three years, there is no detailed information about its progress.
PIF invested US$40 billion in SoftBank’s Vision Fund and took the lead in promoting Prince Mohammed’s development plan, but did not respond to a request for comment.
However, the fund is expected to oversee 70% of the renewable energy projects in Saudi Arabia’s 2030 development plan. This month, ACWA Power, a public utility company in which PIF owns 50%, announced the financial settlement of the 3.4 billion riyals (907 million US dollars) solar project Sudair, which is expected to generate 1.5 GW of electricity. PIF has also invested in the $5.4 billion TPG Rise Climate Fund, which is chaired by former U.S. Treasury Secretary Hank Paulson (Hank Paulson).
Saudi officials stated that the current installed solar capacity is 300 MW, and added that Riyadh is developing 13 projects, which will increase to 5GW by 2024.
But Tim Buckley, head of Australia/South Asia Energy Finance Research at the Institute of Energy Economics and Financial Analysis, said the shutdown nature of the Saudi project discouraged potential investors.
“The market is cynical: they announced the world’s largest solar project three or four years ago, but got nothing,” he said.
However, he added that the kingdom’s vast desert land and hot climate mean that it has resources that make it possible to become the “world’s solar capital, once the world’s oil capital”.
Government officials said they also plan to use carbon capture, utilization and storage (CCUS) and direct air capture (DAC) to capture emissions from hydrocarbon production—much smaller than those generated when fuel is burned.
Saudi officials said that the state-owned oil company Saudi Aramco and the petrochemical group Sabic are both developing projects in this area.
“We realize that we must go beyond renewable energy and electrification to ensure that CCUS and DAC are properly handled; hydrogen becomes a clean fuel that needs to be established [and] We realize that even if it is aviation fuel, we need to work hard on electronic fuel,” said a senior Saudi official.
He said that there is no conflict between using clean hydrocarbon technology and “using hydrocarbons and solving climate problems.”
The kingdom still relies on oil for its income and foreign exchange. It also faces huge financial commitments to fund a series of large-scale projects that are part of Prince Mohammed’s plan to achieve economic diversification.
“the fact is [the Saudis] Richard Black, senior assistant to the Energy and Climate Intelligence Department, said there is currently no economic incentive to move away from fossil fuel production.