Five priorities for the Middle East’s climate agenda
This article is part of our COP28 series. Learn more about CATF at COP28.
As the world gathers in the Middle East for the 28th gathering of UN-led climate talks, the need to strengthen efforts toward meeting climate targets has never been more pressing. The most recent UN Environment Programme (UNEP) report exposes the huge gap between countries’ emissions plans and the world’s 1.5° C climate target, finding that the Earth is on course for 2.9° C of global warming above pre-industrial levels. Since COP1 in Berlin in 1995, global greenhouse gas emissions (GHG) levels have continued to climb steadily, only pausing briefly during the 2008 global recession, and in 2020, from the consequences of the Covid-19 pandemic. Even since the 2015 Paris agreement at COP21, global greenhouse gas emissions have risen.
Today, more than eighty percent of the world’s final energy demand is still met by fossil fuels, and the demand for fossil is growing. A recent 2023 report from United Nations Environment Programme (UNEP) found that while a drop in fossil fuel demand would cut methane emissions, these reductions would not occur fast enough to meet the world’s climate goals. In addition, according to the International Energy Agency, the oil and gas industry wasted nearly $90 billion of gas in 2022 through flaring, venting, and leaks.
These stark realities illustrate the need for a new reckoning with our approach to managing energy demand and supply to confront these hard realities. The need to build a compelling vision amongst governments, civil society, and industry that includes a shared understanding to prepare for a range of energy futures has never been clearer. Climate solutions must be embedded into existing global development priorities around economics and trade, and solution pathways must be compatible with technical, political, social, environmental and economic realities. This means advancing all climate solutions that can reduce emissions: the world does not have the luxury of being selective.
With the spotlight on the Middle East region as the UAE has the COP presidency, there is a unique opportunity for the region to put forward its climate actions and priorities. Middle East and North Africa (MENA) stakeholders can work to create a shared and collaborative regional climate vision to advance decarbonisation technologies that will reduce greenhouse gas emissions at scale.
CATF’s key recommendations for the Middle East region on climate fall into five broad categories:
1. Build on the global methane emissions reduction pledges with actionable frameworks
Efforts to clamp down on methane emissions are crucial to overcoming climate concerns, as this is a powerful greenhouse gas with a warming potential more than 80 times larger than CO2 over a 20-year period and that threatens the health of millions of people.
Many MENA countries have recognized the importance of addressing GHG and in particular methane emissions in the oil and gas sector. Fourteen countries1 across the region have joined the Global Methane Pledge and other actors acknowledge the positive economic returns of methane mitigation. There have been some positive steps by governments in the region who have announced commitments to cut their methane emissions and have taken measures such as banning routine flaring of natural gas.
MENA governments are encouraged to take the next steps by developing and implementing regulations to reduce methane emissions associated with fossil energy, to have transparent measurements of emissions, and to implement financing schemes to make sure there is adequate methane mitigation investment across the region. These efforts would encourage other MENA governments to also address methane emissions. Increased regional coordination, for example the Middle East Green Initiative, could be used as a forum for developing common standards. The initial efforts could include provisions on emissions monitoring, reporting, and verification (MRV), leak detection and repair (LDAR), and banning routine venting and flaring practices.
The positive economic and local health benefits of reducing methane emissions should be internalised across the region’s decision makers. According to recent CATF analysis looking at health effects due to flaring, Iraq and Nigeria have the most people affected by methane leaks with 3.0 million and 2.5 million respectively; whilst another 2.9 million people live within 5km of flares in the United States, Mexico, Azerbaijan, and Egypt combined.
2. Develop low-carbon hydrogen to expand and decarbonise local industry to satisfy global demand for sustainable products
Presiding over COP28 provides a unique opportunity for the UAE and consequently to the Gulf Cooperation Council (GCC) countries — where economic growth has been closely tied to energy production and prices — to implement climate action for addressing emissions from industry and hard-to-abate sectors. Alternative fuels are needed for decarbonisation and to clean up all emissions associated with these sectors.
GCC countries are well-positioned to deliver on the solutions to transition to decarbonised alternatives for these sectors. As a hub for energy production and trade, with established energy partners and customers, abundant natural resources, experience in delivering capital projects, a stable investment environment and strong commercial and political relationships, the GCC region can play a dominant role in a low-carbon hydrogen-based industry for sustainable manufacturing.
For the industry to deliver on this, support is needed from governments to shape decarbonisation policies that direct low-carbon hydrogen to the optimal end-uses and guide a new market to manufacture a variety of essential chemicals, as a feedstock for the fertilizers required to feed the global population, and to provide fuels for key segments of the transportation sector. Recent CATF analysis suggests the following sectoral priorities:
Iron and steel production is an energy demanding process which the region can shift to sustainable paths, due to its abundant resources and capacity to produce low-carbon hydrogen cost effectively and at scale. A recent report by the Institute for Energy Economics and Financial Analysis argues that the region’s position as a leading Direct Iron Reduction (DRI) producer with an established supply of high-grade iron ore in addition to a large pipeline of clean hydrogen projects should place the region as a dominant exporter of ‘green’ iron in the form of Hot Briquetted Iron (HBI). Several provide an essential role in providing a secure food supply for human populations worldwide. In fact, 70% of global ammonia supply goes to fertilizer production. Ammonia also has other important uses, such as for explosives in the mining sector, synthetic fibres, and specialty applications. Approximately 90% of ammonia production in the GCC is used to produce ~16 million tons per year of urea which is mostly exported. The region can use low-carbon hydrogen or carbon capture and storage to decarbonise urea production and increase the production of low-carbon ammonia.
Several countries in the GCC have already put forward hydrogen strategies for scaling low-carbon hydrogen production and use, including the UAE, Oman, and Saudi Arabia. The UAE hydrogen strategy is planning for 1.4 million tonnes of hydrogen in 2030, and Oman is developing a framework for blue hydrogen with CCS. The UAE has the world’s only low carbon steel plant, that captures CO2 and injects it for enhanced recovery.
These are positive developments, and GCC players can decarbonise faster and in a more cost-effective manner than non-producing peers, and showcasing the technical expertise and net-zero technologies needed for long-term decarbonisation efforts would help meet the diverse energy and climate needs of all its sectors and countries. Finally, the region can leverage this evolution to position itself as a global hub for clean manufacturing, taking advantage of these new technologies.
3. Create a business case for carbon management at scale through policy action to develop CO2 storage capacity
Carbon capture and storage is a critical element in climate change mitigation pathways, as outlined by multiple climate neutrality advocates, including the Intergovernmental Panel on Climate Change, the European Scientific Advisory Board on Climate Change, and the International Energy Agency. Net zero pathways would be significantly more expensive without the use of CCUS.
To make carbon management technologies viable at scale, some groundwork must be done. Governments need to systematically identify key point sources of CO2 emissions that are suitable for CO2 capture, map regional storage capacity and promising areas for storage site development, and assess potential means of transporting captured CO2 to storage sites. There is a need for a comprehensive legal and regulatory framework for carbon management to enable pore space leasing and storage site permitting, and establish requirements for site monitoring, closure, and post-closure protocols.
These activities will all benefit from collaboration and cross-border harmonization to ensure cooperation with regional players to develop carbon management infrastructure networks and plan for the development of cross-border CO2 storage and transport infrastructure. Sufficient funding should be made available for developing carbon capture and storage projects, with rewards based on a system-based approach to project design, to encourage economies of scale.
The GCC offers an attractive environment for rapid scale up of CCS, due to the extensive knowledge of geological formations, suitable for CO2 storage, and the presence of NOCs which possess the requisite economic resources and strong technical expertise in subsurface disciplines including CO2 storage to meet this challenge. This presents a clear opportunity to become world leaders in demonstrating and deploying CCS, not only for the attainment of domestic decarbonisation goals, but to help drive down technology costs, demonstrate new technologies, and progress CCS for faster adoption globally.
CCS deployment also provides a significant economic opportunity for the GCC. Many regional governments have started to look at this, announcing deployment targets and associated levels of funding, but further clarification on the future of CCS is needed to enable commercial scale-up of the technology. For example, by 2030 ADNOC plans to capture 10 million tonnes of CO2 per year and Saudi Arabia is planning a 9 million tonne per year hub of CO2 capture and storage by 2027 aiming for an expansion to 44 Mtpa by 2035. The Omani government is also planning to finalise a regulatory and strategic framework for carbon capture, utilisation and storage.
The next step is to finalise these strategies to see infrastructure build out and set in motion the steps required to achieve these though policy frameworks that define the roles of different actors in the private and public sector, and dedicated funds for supporting projects in key sectors and an investable framework for wider deployment.
4. Put in place strategies for low-carbon infrastructure incentives and identify areas for cooperation within the region
The GCC has a strongly positive record in the safe delivery of complex energy and infrastructure projects and has an established supply chain that can scale to rise to the challenge. The magnitude of the energy transition requires a large-scale build-up of power generation, manufacturing capacity and mining throughput. The MENA region is home to much state-owned industry, which could lend favour to the region in taking a leadership role to develop a process to transition the whole market, since industry needs to take a leadership role in developing how to decarbonise.
Saudi Arabia has 13 renewable energy projects under development that will deliver 11.3 GW of electricity with an ambitious 2030 goal of 58.7GW. The UAE has also invested over $40 billion in clean energy in the past 16 years and announced plans to develop 100 GW of renewable projects in the country and abroad. The expansion in renewable capacity serves not only to decarbonise the region’s power generation but also provides a compelling argument to decarbonise the production of key metals such as aluminium and steel and to produce an abundance of low-carbon hydrogen required to decarbonise heavy industry.
Governments can help guide this market and new standards to materialise by developing regulations and business environments that encourage and, occasionally, mandate low-carbon production and consumption methods. This would support the delivery of the needed scale of advanced zero-carbon energy and climate technologies through clear policy frameworks, targets, and business models to support production. A substantial increase in international public and private climate cooperation is needed, and the region could have an intensified focus on development of investable projects through policies to create enabling environments.
The MENA region can become a centre of excellence for materials and minerals and regional entities can start driving change by developing decarbonisation plans and mega projects, that include low-hanging fruit and longer-term plans for action and working with the government to build coordinated efforts of stakeholders such as, governments, developers, customers, and suppliers. The role of the government is essential in setting policies, building codes, and providing subsidies that incentivize these goals — including coordinating market groups between producers and consumers to set multi-regional targets in line with decarbonisation needs and adjust or pioneer new business models and help create a market shift with the right policy, market conditions, and international cooperation.
5. Bolster the ecosystem for scaling emerging decarbonised energy solutions
Reaching the goals of the Paris Agreement requires the international community to employ the full range of tools capable of delivering zero- or very-low-carbon energy. Energy decarbonisation plans need to factor in a whole-systems approach to manage trade-offs, interdependencies of decarbonisation, energy security, manufacturing, and economic growth. According to McKinsey, power consumption is projected to triple by 2050 as electrification and living standards grow, and this increased electrification will require a massive expansion of clean infrastructure globally.
Nuclear energy could be a major source of abundant, continually available, zero-carbon electricity and thermal energy to help meet this demand. Nuclear power is nearly 20 times more land efficient than wind and nearly 300 times more than solar, according to the U.S. Department of Energy, and these compact spatial requirements and relatively lower lifecycle material usage make it a favourable option for increased energy supply in a crowded world. Some regional players, such as the UAE, have already taken advantage of this by decarbonising 25% of its power sector with the Barakah units alone. This raises the profile and credibility of nuclear energy through the demonstration of clean technology innovation.
To accelerate the pace of clean energy infrastructure deployment the region should consider supporting coordinated infrastructure build out and a strong commitment to exploring all potential solutions, with a long-term vision to develop and deploy all available low-carbon energy sources. This means implementing policy that maximises investment in existing alternative energy solutions such as nuclear, as well as emerging energy solutions such as fusion and superhot rock geothermal energy.
Government schemes could also support the transfer of skills from the oil and gas skills base to carbon management and low carbon fuels production. This could achieve significant progress toward cleaning up upstream production, decarbonising export and transport, and achieving CCS on end uses of gas by importing regions. This could include net-zero or low carbon LNG export (i.e., low carbon electricity addition and CCS on compressors), and collaboration with importers to achieve carbon capture on fossil end uses. GCC producing countries might help provide funding or loans for the addition of carbon capture and, in exchange, might be able to secure long-term gas contracts. Whilst the UAE exports less than 10% of the gas exports of Qatar, UAE is working to double their LNG exports so this could be an option to demonstrate leadership.
GCC countries are member of several international collaborations and global initiatives2 addressing energy transition and decarbonisation, which can be instrumental in transferring learning, skills, and capabilities on deploying decarbonisation technologies and showcasing solutions to GCC customers and trade partners.
Conclusion
It is imperative that complex challenges across funding, energy security, policy, and regulation, are confronted to create incremental, realistic steps for long-term energy system transformation. The MENA region can showcase progress in promoting clean energy innovation — while engaging climate advocates in a dialogue that promotes an honest reckoning with the realities of the global energy system.
The MENA region can continue to establish and socialize credible and realistic pathways for eliminating carbon dioxide and methane emissions from existing energy flows from the region, while supporting innovation and deployment of critical carbon-free technologies, including low-emissions hydrogen coupled with carbon capture and storage, further nuclear build out and superhot rock.
MENA nations with significant financial resources, technical know-how, and influence in global energy markets can lay the groundwork for decarbonisation and climate action in the region, by taking a leadership role in efforts to address climate change and decarbonise the global energy system, and by defining what climate action means for the region.
1 Egypt, Sudan, Tunisia, Saudi Arabia, Qatar, Morocco, Kuwait, Jordan, Libya, Yemen, Lebanon, UAE, Iraq, Bahrain
2 Net Zero Producers Forum, Zero Routine Flaring initiative, Oil & Gas Climate Initiative, IRENA, Clean Energy Ministerial, etc.
