That is after Saudi Arabia, India and China opposed attempts to ensure the scientific body would provide its assessment in time for the next global stocktake, the UN’s scorecard of collective climate action, due in 2028, according to sources present at the IPCC talks in Istanbul, Turkiye, last week.

Following “fraught” discussions that ran all night Friday, governments postponed a final decision on the timeline until the next meeting scheduled in the summer.

How fossil fuels went from sidelines to headlines in climate talks

Swiss climate scientist Sonia Seneviratne, who is the vice chair of an IPCC working group, said she “was not totally surprised” to see opposition to the proposal.

“We know that some countries do not necessarily want climate policy to advance very fast and IPCC information will be critical for informing the global stocktake”, she added. “But I was surprised by the lack of willingness to even negotiate on these points”.

The findings of previous IPCC reports played a prominent role in informing the first global stocktake, which resulted in governments agreeing for the first time to begin “transitioning away from fossil fuels” at Cop28 last December.

Timeline disagreement

The IPCC met last week to decide the work programme for its seventh assessment cycle, which officially started in July 2023 with the election of its new chair Jim Skea.

Ahead of the talks, the UNFCCC officially requested that the scientific body align its activities with the timeline of the next global stocktake. The IPCC input would be “invaluable” for the scoring exercise, Simon Stiell, chief of the UN climate body, said.

Azerbaijan appoints fossil fuel execs and scandal-hit officials to all-male Cop29 committee

But sticking to a 2028 deadline would mean either fast-tracking its work or shortening the IPCC’s entire cycle from seven years down to five years. Small island nations, least developed countries and some rich countries favoured this option, sources told Climate Home.

But a group of governments, led by Saudi Arabia, India and China, argued the accelerated programme would force to complete the scientific process “in a hurry” and would not leave enough time for developing countries to review the output, according to sources.

Speed and quality

Mohamed Nasr, Egypt’s chief climate negotiator, told Climate Home that he was not opposed to the principle of IPCC producing reports in time for the global stocktake but only if “we are not rushing science to deliver in a short timeline”.

“The question is ‘can you provide the same level of quality in 2028 or not?’”, he added. “Otherwise, the credibility of the IPCC would come under question”.

The IPCC normally publishes its reports every five to seven years and three scientists involved in its activities told Climate Home it is entirely possible to conclude its next round of assessments by 2028.

Junk offset sellers push to enter new UN carbon market

“Linking the assessment cycle to the global stocktake makes a lot of sense to me”, said Richard Klein, a senior researcher at SEI and a lead author of previous IPCC reports. “It is the gold standard of everything to do with climate science and the IPCC was explicitly set up to inform climate policy, including the UNFCCC’s processes”.

Eleventh-hour compromise

The issue caused major divisions between governments throughout the meeting, which “teetered on the brink of failure on Saturday morning”, according to a summary of discussions by the IISD’s Earth Negotiations Bulletin. The lack of consensus led to “IPCC Chair Jim Skea half-jokingly warning that the time to leave the venue was near and further consultations would shortly have to be held on the street”, the report added.

Negotiators huddle looking for an agreement on the final day of the IPCC meeting. Photo: IISD/ENB | Anastasia Rodopoulou

Most critical discussions took place when many delegates, especially from vulnerable countries, had already left because of their inability to change complicated travel arrangements. Seneviratne said that was morally “questionable”.

Veteran US and Chinese climate envoys step down

Negotiators eventually struck a last minute compromise. The final agreement puts the IPCC’s bureau – an advisory group – in charge of proposing a timeline for the assessment reports that could be decided at the next meeting.

Seneviratne said that, while she would have wanted a “more explicit response” on this point, “the decision does not prevent the IPCC from delivering information in time for the global stocktake”.

But Klein argued the lack of a firm commitment leaves the process stuck in limbo. “There’s no guarantee that there will be agreement on the next meeting and, meanwhile, the working groups need to get started now. They don’t have the luxury of waiting until the next meeting”, he added.

No extra special reports

Egypt’s Nasr said he was satisfied with the meeting’s outcome: “It confirmed that reports will have the same level of comprehensiveness, will consider all literature and will allow for full engagement for developing countries”.

But he expressed disappointment over the absence of a special report on adaptation, which some African countries had asked for. Governments have instead only agreed to update technical guidelines first devised in 1994 to help countries measure climate impacts and adjust to them.

The IPCC will also produce a special report on climate change and cities, which had already been agreed on, and a methodology report on carbon removal, including carbon capture and storage (CCS).

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During a meeting of the bank’s steering committee in Marrakech, Morocco, they voiced opposition to reforms which are expected to channel more money into clean energy projects.

Mohammed Aljadaan, the Saudi finance minister, said “hydrocarbons will continue to play an important role in balancing the energy mix for the foreseeable future”, calling on the World Bank to reflect “these realities” in its financing.

He added that the lender should prioritise supporting universal electricity access, which requires “tapping all energy sources”.

His calls were echoed by Bahrain’s finance minister, Sheikh Salman Al Khalifa, who intervened at the meeting on behalf of a group of countries including neighbouring United Arab Emirates and Qatar.

“All sources of energy are essential and needed for economic growth and development,” he said before going on to make the case for the “indispensable role” of fossil gas as a source of “reliable and affordable” energy during the transition process.

Gulf states are among the world’s biggest producers and exporters of fossil fuels, which contribute to the vast majority of their national incomes.

Carbon capture pitch

Both Aljadaan and Al Khalifa also urged the World Bank to boost investment in carbon capture and storage (CCS) to allow for “a wide and reliable energy mix”. Saudi Arabia is a major proponent of CCS and has a history of promoting it in international summits, including talks over the IPCC scientific reports and UN climate talks.

Countries that produce or rely on fossil fuels particularly advocate the use CCS to trap their emissions, rather than ending the use of such fuels completely. However, the technology remains expensive and unproven at large scale.

According to the IPCC’s scientists, stopping a tonne of carbon dioxide with CCS costs between $50 and $200. Replacing fossil fuels with renewables usually saves money.

The International Energy Agency recently downgraded the role of the techno-fix in its net zero scenario, saying the history of CCS “has largely been one of unmet expectations”, marked by slow progress and flat deployment.

Green agenda attacked

Another voice in favour of fossil fuels around the World Bank committee table was that of Alexey Overchuk, Russia’s deputy prime minister. In a not-so-thinly veiled attack on the lender’s new agenda, he hit out at “unbalanced” energy and climate policies.

“An accelerated ‘greening’ of the global economy without considering the social effects and economic efficiency of decarbonization measures, along with massive underinvestment in fossil fuels, undermines energy security globally,” Overchuk said.

He added that the World Bank should recognise “the potential advantages of other energy sources, including gas and nuclear”. Russia is the second world’s largest gas producer, accounting for 18% of the global gas output in 2021.

World Bank and fossil fuels

The World Bank has reduced its financial backing of fossil fuel projects over the last few years. But last year it still provided over $1 billion of direct support to oil and gas, according to research by campaigning group Oil Change International.

A separate study found the lender’s private finance arm supplied $3.7bn in trade finance to oil and gas projects in 2022. Trade finance refers to a complex set of financial instruments in which money flows through intermediaries, like commercial banks, before reaching governments and businesses.

The World Bank – along its fellow development banks – recently agreed on principles to align its activities to the goals of the Paris Agreement, which aims to limit global warming to well below 2°C and to “pursue efforts” to keep it under 1.5°C.

But analysts raised concerns over the framework which does not explicitly prohibit financing for fossil fuel activities.

Climate finance leader

The World Bank says it is the largest provider of climate finance to developing countries. In 2022, it delivered $31.7 billion for climate-related investments – 36% of its lending.

At the meeting on Thursday in Marrakech, the World Bank’s shareholders endorsed its new vision, which puts a sharper focus on climate change.

The bank has expanded its historical objective to “end poverty” by adding that this should happen “on a livable planet”.

The reason for evolving the statement is to widen the aperture through which the bank looks at its task in the future, its chief Ajay Banga said on Wednesday. “If you can’t breathe and cannot drink clean water, there is little point in eradicating poverty,” he added.

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Speaking at a meeting of the World Bank’s steering committee, Saudi Finance Minister Mohammed Al-Jadaan urged the World Bank to “take on a prominent role in promoting CCUS [carbon capture utilisation and storage]”.

At the same meeting in Washington DC, Russia’s deputy prime minister Alexey Overchuk said CCUS was “of utmost importance to the green agenda”.

The technology is meant to suck carbon out of the atmosphere, usually from a particularly polluting source like a fossil fuel power station’s smokestack, and either use it or put it back in the ground. But it remains very expensive and largely unproven at scale.

Brownen Tucker from the campaigning group Oil Change International said more World Bank support for carbon capture and storage would be “beyond ridiculous”.

“The World Bank prioritising carbon capture and storage would just be a way to greenwash its long-time role as a piggy bank for the fossil fuel industry,” she told Climate Home.

Saudi’s CCUS pitch

At this week’s spring meeting of the World Bank, Al-Jadaan said the bank’s support for CCUS has been “insignificant” so far.

He added that the technology has “great potential to serve the climate mitigation agenda while contributing to affordable universal energy access”.

At the World Bank Group Development Committee meeting in Washington DC, I stressed the importance of continuing the Group’s commitment to ending extreme poverty and boosting shared prosperity and the Sustainable Development Goals of the United Nations.#WorldBank #SpringMeetings

— محمد عبدالله عبدالعزيز الجدعان | Mohammed Aljadaan (@MAAljadaan) April 12, 2023

Saudi Arabia is a major proponent of CCUS and has a history of promoting it in international summits, including talks over the IPCC scientific reports and UN climate talks.

‘Costly distraction’

Carbon capture and storage remains expensive and unproven at large scale.

According to the IPCC’s scientists, stopping a tonne of carbon dioxide with CCUS costs between $50 and $200. Replacing fossil fuels with renewables usually saves money.

There are currently only 35 commercial facilities applying CCUS with a total annual capture capacity of 45 Mt CO2, according to the International Energy Agency (IEA). Most are in North America and in the gas processing industry.

Many climate campaigners have called it a “distraction” that gives fossil fuel companies a licence to keep extracting more climate-harming coal, oil and gas.

But the IEA’s head Fatih Birol disagrees, calling it “critical for ensuring our transitions to clean energy are secure and sustainable”.

‘Absolutely essential’

In its current climate change action plan, the World Bank says CCUS “may be an important lever for decarbonization”.

In 2009 the World Bank set up a dedicated trust fund looking to support developing countries exploring CCUS potential.

Supported by the UK and Norwegian governments, the fund has provided grants worth a few million dollars.

It has supported technical assistance for the development of technology in Mexico, South Africa, Botswana, and, most recently, Nigeria.

Developing countries call for new government funds for World Bank

Speaking at a seminar last year, World Bank specialist Natalia Kulichenko said the trust fund would be closed in December 2023.

But she added the support was “absolutely essential to continue” in other forms, as the World Bank had been receiving more interest on CCUS from developing countries.

Kulichenko talked about the possibility of providing loans to governments and guarantees to the private sector as part of existing programs.

Russian backing

Alongside CCUS, Russia’s Overchuk listed gas, nuclear energy and measures to reduce the burning of gas as a by-product of pumping it up, known as flaring, as important green projects.

Russia is the second world’s largest gas producer, accounting for 18% of the world’s gas output in 2021.

Following Russia’s invasion of Ukraine, countries, especially in the European Union, have dramatically cut imports of Russian gas.

A gas field in the Yamal Peninsula in Russia. Photo: Russian Government

Russia is also the eighth biggest shareholder of the World Bank, where voting rights are linked to financial contributions.

The World Bank has provided over $1.5 billion in support for gas projects since 2020, according to an analysis from the campaigning group Oil Change International.

Gas commitments

In 2017, the bank said it would end its financial support for oil and gas extraction within the following two years.

But at Cop26 in Glasgow, it did not join five fellow development banks and 20 countries in signing up to a commitment to halt any new financing for oil and gas projects internationally by the end of 2022.

Green hydrogen rush risks energy ‘cannibalisation’ in Africa, analysts say

Russian Deputy prime minister Overchuk also urged the international community, including the World Bank, to find a common solution to ensure energy access and tackle poverty in Africa.

“Developing natural gas projects in African countries, abundant with natural gas, is a part of this solution,” he said. Several African leaders have said the same, criticising the West for stopping gas finance.

Overchuk opposed “additional reiteration and redistribution of resources” towards tackling climate change. Those efforts, he believes, are already well funded by the World Bank.

World Bank’s private sector arm to stop supporting new coal

The World Bank has committed to aligning all its operations with the Paris Agreement by July 2023.

However, the draft methodology to be used for this process indicates that some support for Paris-unaligned oil and gas projects will continue, according to the National Resources Defence Council.

The lender claims to be the world’s largest provider of climate finance to developing countries. It says in 2022 it delivered $31.7 billion for climate-related investments, taking up 36% of its overall lending.

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Major oil and gas producers like the USA and Saudi Arabia, along with most of Asia, want the proposed treaty to be “bottom-up” like the Paris Agreement on climate change. This means countries can make their own plans and set their own targets.

A “high ambition coalition” covering roughly a quarter of UN member states including several European countries is calling for a top-down treaty that binds all to certain measures. This could include bans on certain types of plastics.

Nations are split on whether to emphasise recycling and waste management or whether to reduce the production of plastic. A key tactical debate concerns how much voting power the EU should get.

Neil Tangri, from the Global Alliance for Incinerator Alternatives, said: “The US is calling for a treaty with no binding obligations and no requirements to achieve its goal, such as bans on toxic polymers or a reduction in overall production. Every country just does what it wants to. I think that’s a terrible idea.”

He added: “It’s not going to get us where we need to go. It’s not going to restrain plastic production. It’s not going to get the toxics out of plastic. It’s not going to arrange a just transition for workers especially waste pickers. It’s going to be a lot of fancy words with no substance.”

The US is not one of the members (light blue) of the High Ambition Coalition to End Plastic Pollution (Photo credit: High Ambition Coalition/Screenshot)

Big Oil’s plan B

As well as polluting land and sea, plastics are responsible for an estimated 3% of global greenhouse gas emissions through their lifecycle. They are made from oil and gas, potentially offering a lifeline to the sector as climate action cuts demand for hydrocarbons as a fuel source.

But awareness of plastic pollution is rising and in March, governments agreed to negotiate a legally binding UN treaty on the issue. They aim to land a deal by 2024 and, in Uruguay this week, held their first official committee meeting on the scope of the talks and the rules of procedure.

Cop27: Late-night fossil fuel fight leaves bitter aftertaste

At the start of the week, Saudi Arabia launched an impassioned defence of plastic in the plenary hall in Punta del Este. Its negotiator said: “We cannot deny the importance of plastics for humanity. Plastics have contributed to development and global commercial and economic prosperity, promoting the achievement of the [sustainable development goals].”

He added: “Plastic products are part of every part of our lives. They are present in manufacturing as well as renewable energy and food security. Plastics also play an important role in socioeconomic development in several countries and therefore the instrument must ensure that no-one is left behind by focusing on the priorities of developing countries”.

Bahrain’s negotiator said “plastics play an important role in our society” and are important for “sustainable development” while the Asia-Pacific group argued “our task is ending plastic pollution, not necessarily plastics themselves”.

The high ambition coalition, which counts the EU, Australia, Canada, small islands and a handful of African and Latin American states among its members, argued for an agreement which covers the whole lifecycle of plastics. That includes their production.

Antigua and Barbuda’s negotiator Asha Challenger, speaking on behalf of small islands, said that old models of international agreement are “not up to the task”.

EU mandate

In UN climate talks, the EU negotiates as a bloc on behalf of its 27 member states. Under the rules of procedure drafted by the UN Environment Programme (Unep), they would do the same in the plastics treaty talks.

While UN climate talks work on consensus, meaning any country can block an agreement, Unep proposed a voting system, under which numbers matter.

At a preliminary meeting in Dakar, Senegal, in June, the EU’s mandate to vote on behalf of all its members was questioned. In one alternative proposal, each member state would need to have a representative in the room for their vote to count.

On Friday in Punta del Esta, that question had not been settled. In the absence of an agreed voting procedure, decisions require consensus, which campaigners warned could lead to weaker outcomes.

At the Cop27 climate talks last month, a call by more than 80 countries to phase out fossil fuels was not put to open debate because a handful of oil and gas producers objected. At Cop26 the year before, the US denied developing countries – the overwhelming majority of parties – a steady flow of income to adapt to climate change impacts.

Carroll Muffett, CEO of the Center for International Environmental Law, told Climate Home: “Thirty years of experience with the [UN climate change talks] demonstrates the critical importance of parties to these negotiations having the ability to vote on complex issues, take a decision and move forward.”

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An international policy advisor at the energy ministry and former Saudi Aramco employee, Shasly has been a prominent figure representing Saudi Arabia for years: at the UN climate talks, the Intergovernmental Panel on Climate Change (IPCC) and as a board member of the Green Climate Fund (GCF).

He served as chair of the powerful Arab group for a decade, taking on the role in January 2012. 

Albara Tawfiq, an international policy advisor at the energy ministry and policy advisor at oil giant Saudi Aramco, confirmed that Shasly is not attending interim climate talks in Bonn this month. Tawfiq is chairing the Arab group’s meetings in his absence.  

“We don’t have a clear direction of the chairmanship of the group,” Tawfiq told Climate Home, adding that his role as chair was “not yet officially permanent”. He added that Shasly was still working on climate issues and may return to international forums.

In March, the Asia-Pacific regional group informed the GCF secretariat that Shasly would be replaced by Tawfiq on the board with immediate effect. One source suggested this was due to health issues.

Shasly and Saudi Arabia’s energy ministry did not respond to Climate Home’s request for comment.

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Shasly has played a critical role in shaping the Kingdom’s negotiation style at the UN climate talks. 

One former climate diplomat described Shasly as “deliberately obstructive” and “sneaky” in pushing Saudi Arabia’s agenda in the negotiations. Others saw him as an ally in defending the principles of equity and historic responsibility.

Shasly stepping back from the process is unlikely to alter the Arab group’s and the Kingdom’s positions, but it may impact their attitude in the negotiations.

“[Tawfiq’s] style is markedly less confrontational in language, while still on target on substance,” one veteran climate observer told Climate Home.

Unusually, Arab youth activists were invited to attend the group’s coordination meeting last week. They welcomed the development and called for further chances to participate.

Albara Tawfiq at the Cop24 climate talks in Katowice, Poland, in December 2018 (Photo: IISD/ENB | Kiara Worth)

Tactics used by Saudi Arabia to block and delay international climate action have challenged the consensus-based approach of the climate negotiations – often offering cover for laggard nations less keen to make their views public.  

In 2018, Saudi Arabia was one of four oil producers to block the welcoming of the IPCC’s special 1.5C report which lays out the differences between 1.5C and 2C of warming – a matter of survival for many small island states. Under Saudi pressure, discussion of the IPCC report in formal negotiations was shut down.

Discussions on the issue were so heated that civil society observers lodged a formal complaint against one Saudi negotiator for “bullying” a female co-facilitator during the talks. The name of the negotiator was never revealed.  

The 1.5C target poses a threat to the Kingdom’s oil revenues, which fund fuel subsidies, free healthcare and education. While Saudi Arabia is attempting to diversify its economy, oil rents still account for around a quarter of its GDP.

“We need time” to end the use of fossil fuels, Shasly told Carbon Brief in a rare interview in 2018. “Now, that could be within the next 15, 20, 30 years. It’s just a matter of supply/demand.”

More recently, Saudi Arabia adopted a 2060 net zero target, which doesn’t include an oil exit plan, and pledged to plant 10 billion trees to combat desertification and reduce emissions.

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The Intergovernmental Panel on Climate Change (IPCC)’s latest report focuses on how to halt global heating below 2C and to 1.5C in line with the Paris Agreement. While it deals with solutions, this is the most politically sensitive part of the IPCC’s three-part assessment.

Publication was delayed by six hours on Monday following a marathon 40-hour session over the weekend for scientists and government representatives to finalise its summary for policymakers – the longest approval plenary in the IPCC’s 34-year history.

The document concludes “a substantial reduction in overall fossil fuel use” is needed to tackle the climate crisis. But compared to earlier drafts, there is a much stronger emphasis on technologies to capture and store carbon dioxide underground (CCS) as a potential solution that extends the lifespan of coal, oil and gas infrastructure.

Saudi Arabia, one of the world’s largest oil producers and exporters, successfully argued for the repeated inclusion of references to CCS, which remains unproven at commercial scale. Opposition from European nations wasn’t enough to prevent a weakening of language on the need to phase out coal, oil and gas.

CCS and other carbon dioxide removal practices have become “the escape hatch for the fossil fuel industry,” one source told Climate Home. The negotiations are closed to media.

Five takeaways from the IPCC’s report on limiting dangerous global heating

Wrangling over this and other issues made the summary longer. In total, 22 pages were added compared to a draft dated 16 March seen by Climate Home News – taking it from 41 to 63 pages.

Language on risks and feasibility concerns about carbon dioxide removal techniques was toned down. References to shifting away from coal, oil and gas were qualified with the word “unabated” and “fossil fuels with CCS” was identified as a way to cut emissions in line with global climate goals.

A whole section was introduced on CCS, describing the technology as “an option” to cut emissions from fossil fuel use and in the industry sector. It notes that CCS has the capacity to store more carbon under ground that what is needed by 2100 to limit warming to 1.5C, albeit with some regional limitations.

And the report makes clear that CCS technology is the way to keep the oil and gas industry alive: “Depending on its availability, CCS could allow fossil fuels to be used longer, reducing stranded assets,” it states.

Saudi Arabia gets more than half its government revenue from the oil and gas sector. In recent years, the Kingdom has promoted the concept of a “circular carbon economy”, advocating for technological solutions that would cut emissions while allowing it to continue to extract and sell its oil for decades to come.

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In the negotiations, Saudi Arabia was isolated on the issue. But its vocal position may have provided cover for others with similar views.

“The US was silent on CCS,” Teresa Anderson, climate justice lead at ActionAid International, told Climate Home. “It really seemed like they were happy to let Saudi Arabia be the bad guys.”

Anderson added: “The IPCC report delivers a clear warning that reliance on technofixes and tree plantations to solve the problem not only amount to wishful thinking, but would drive land conflicts and harm the food, ecosystems and communities  already hardest hit by the climate crisis.”

The Center for International Environmental Law (CIEL) denounced the outcome of the negotiations as “de-emphasising” the risks and uncertainty of carbon dioxide removal techniques while “overwhelmingly rely[ing] on technologies that pose grave threats to people and the environment”.

“States may water down the text but they cannot mask this clear scientific reality: only a rapid and equitable phaseout of fossil fuels, and the transformation of our energy system, can avoid overshooting 1.5C and the irreparable damage that would follow,” said Nikki Reisch, climate and energy programme director at CIEL.

Breakdown of recent average (downstream) mitigation investment flows and modelled investment needs until 2030 in scenarios likely to limit warming to below 2°. The figure was deleted from the summary for policymakers after a dispute between the US and China (Source: draft IPCC WGIII report)

Another point of contention between the US and China was the scale of the funding gap for developing countries to cut emissions compared to wealthier ones.

The issue flared over a figure detailing the finance gap by sector and for developed and developing countries. It showed that developing countries need on average four to seven times more mitigation finance per year to 2030 to align with pathways that limit warming to below 2C – an upper range of approximately $2.8 trillion.

The US opposed the distinction between developed and developing countries in the graph – a red line for China. The figure was eventually deleted from the summary but remains in the underlying report.

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Energy minister Abdulaziz bin Salman told the online World Economic Forum this week the kingdom was pursuing blue, green and pink hydrogen development, the colours representing the way it is made – some cleaner than others.

He said the EU was interested in green hydrogen, made with renewable electricity, and joked that pink – to be generated with planned nuclear power plants – was of particular interest to women in the industry.

“We are recruiting, by the way, young Saudi ladies that are happy to see the pink coming along,” said bin Salman. “We have started being very conscious of taking care of our female new recruits and new cadets. We’re becoming an extremely well emancipated society.”

However the bulk is likely to be blue, made from methane gas and emitting carbon dioxide in the process, some of which may be captured and stored.

“We will have a field day with blue hydrogen because again, we’re the cheapest cost producer of gas,” bin Salman said. “We’re doing a huge investment in shale gas in Saudi Arabia and we will be dedicated to have that gas to be used for producing blue hydrogen.”

Likely future importers of hydrogen are in yellow with exporters in blue (Photo: Natural Earth)

Hydrogen can be burned to power processes like steel-making or propel planes and ships. While it’s currently expensive and not widely used, many analysts see it as a clean fuel of the future, particularly for applications that cannot be easily electrified. How clean depends on how it is made.

By 2050, the global trade in hydrogen is expected to be worth more than global trade in oil, according to the International Renewable Energy Agency.

Europe and East Asia are likely to need more hydrogen than they can produce and Gulf nations are well-placed geographically to export through ships or pipelines.

Egypt names foreign minister Sameh Shoukry to lead Cop27 climate talks

Bin Salman said that he had discussed exporting green hydrogen to the EU with the European Commission’s vice-president Frans Timmermans. Saudi Arabia is developing a $5bn green hydrogen plant in its new megacity of Neom, which is due to start running by 2025.

E3G hydrogen analyst Lisa Fischer said the EU is developing guidelines on what constitutes “low-carbon” hydrogen and blue hydrogen, particularly if it comes from fracked shale gas, is likely to be excluded.

The other big hydrogen market is East Asia, which is more likely to accept blue hydrogen. Saudi Arabia is in hydrogen talks with South Korea and Japan.

Saudi Arabia’s electricity has always come almost entirely from oil and gas but it is now planning to ramp up renewables and to build two large nuclear power reactors for power and smaller ones to power taking salt out of sea-water.

The cost of producing green hydrogen. Red is the cheapest and blue is the most expensive (Photo: International Energy Agency)

With its abundant gas reserves and sunshine, the kingdom is well placed to produce both blue and green hydrogen cheaply. Its competitive advantage in nuclear power is less clear.

While women have won more freedoms in Saudi Arabia in recent years, notably permission to drive cars, in 2021 the World Economic Forum’s gender equality index ranked Saudi Arabia 147 out of 156 countries.

There are no female government ministers in Saudi Arabia, women take up just 7% of managerial roles and earn a quarter of a man’s income on average, the report found.

Green hydrogen creates jobs in production of renewable energy and electrolysers, and can support industries like fertiliser production.

Those jobs would help Saudi Arabia transition away from oil and gas while keeping its public on side, Fischer suggested. “If you don’t have that many rents any more from your fossil fuels then you need some other way of keeping people happy, to manage the politics.”

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One week ahead of Cop26, the Gulf state announced it will slash its emissions to net zero by 2060 and strengthen its carbon target this decade – subject to revenue from exporting oil and gas.

Neither target counts the emissions from the burning of huge amounts of oil that Saudi Arabia exports to other countries, leaving climate watchers unimpressed. The Gulf state pumps one in 10 oil barrels consumed each day in the world.

Crown prince Mohammed bin Salman announced he would invest 700 billion riyals ($187 billion) in climate action this decade and stressed that Saudi Arabia would continue producing oil and gas. The targets would be achieved “while preserving and reinforcing the kingdom’s leading role in the security and stability of global energy markets, with the availability and maturity of required technologies to manage and reduce emissions,” he said at an environment summit in Riyadh on Saturday, before meeting with US climate envoy John Kerry on Monday.

In its submission to the UN, the Kingdom said that by 2030 it would reduce, avoid and remove 278 million tonnes of CO2 equivalent a year. That is more than double its previous target of 130 million tonnes, which was ranked “critically insufficient” by Climate Action Tracker.

Observers at the Riyadh event tweeted that this amounted to a 35% reduction in emissions from business as usual.

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Half of the country’s electricity in 2030 will come from renewables, according to the updated plan. Today less than 1% of Saudi Arabia’s power comes from solar, with the rest generated by burning oil and gas. The Kingdom said in March that it would plant 10 billion trees over the coming decades to combat desertification and reduce emissions. 

To cut its emissions, the government said it would use a “circular carbon economy” approach, which means relying on carbon capture and storage to allow continued use of fossil fuels.

Following the government announcement, state oil firm Saudi Aramco said it would cut emissions from its operations to net zero by 2050. That applies to oil production and processing, known as scope 1 and 2, but not the much higher emissions when the fuel is consumed, scope 3.

In its new climate plan, the Kingdom signed up to a global methane pledge, joining more than 30 countries aiming to cut methane emissions 30% by 2030. At the same time, Aramco is considering an increase its oil production from 12 million to 13 million barrels a day.

“The Saudis see robust long-term demand for their crude oil, even as global oil demand shrinks. Saudi Arabia has enormous resources as well as the world’s lowest production costs. As non-Opec supply gradually declines, their comparative advantage will be clear and their market share should grow,” Ben Cahill, senior fellow at the Center for Strategic and International Studies, told Climate Home News. “At the same time, the net-zero pledge raises the pressure for Saudi Arabia to decarbonise its oil and gas production.”

“Saudi Arabia makes no plan to reduce its fossil fuel exports. In fact the Saudi announcement makes its climate commitments conditional on its ability to maintain its fossil fuel exports,” Karim Elgendy, associate fellow in the environment and society programme at Chatham House, told Climate Home News.

Revealed: Cop26 sponsor National Grid spewing methane across England

Climate campaigners said to be truly ambitious, Saudi Arabia needed to phase down oil production.

“We question the seriousness of this announcement, as it comes in parallel with plans for the Kingdom to increase its oil production to 13 million barrels per day,” Greenpeace Middle East and North Africa campaigns manager Ahmad El Droubi said in a statement. “[It] seems to simply be a strategic move to alleviate political pressure ahead of COP26,” he added.

“Scopes 1, 2 and 3 and then there is Scope Saudi,” Rachel Kyte, former adviser to the UN secretary general on sustainable energy, wrote on Twitter. 

The International Energy Agency (IEA) has said that investors should not fund new oil, gas and coal supply projects beyond this year if the world is to meet net zero by 2050, in line with a 1.5C global warming limit. Saudi energy minister Prince Abdulaziz bin Salman previously mocked the IEA’s 2050 target, calling it “a sequel to [the] ‘La La Land’ movie”.

The target depends on using oil revenues to diversify the economy. The climate plan outlines two scenarios. In one, oil export revenues are used to build high value industries like financial services, tourism and clean energy. In the other, oil and gas are used at home as a feedstock for petrochemicals or energy source for heavy industry. The speed and extent of economic diversification could depend on oil prices and export revenues, said Elgendy.

According to analysis by the state-backed think tank Kapsarc, oil’s share of Saudi Arabia’s total GDP has declined from 65% in 1991 to 42% in 2019.

Jim Krane, energy geopolitics expert at Rice University in Houston, said: “Saudi Arabia is serious about cutting emissions and fossil fuel use, but mostly inside its own borders. For the Saudi net zero goal to succeed, Riyadh needs the world to continue buying and burning its oil.”

Saudi Arabia and UAE, which made a similar commitment earlier this month, are using their goals to “buy influence in climate talks,” said Krane.

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In comments reported by the government-affiliated Saudi Press Agency, Bin Salman said the climate crisis had increased desertification, dust storms and air pollution in the Kingdom, damaging the Saudi economy and its citizens’ health.

In response, the Saudi Green Initiative aims to transform one of the world’s top oil producers into “a global leader in forging a greener world”. This is part of efforts to diversify the economy away from its oil dependence.

The Saudi Press Agency said the crown prince recognised the Kingdom’s share of responsibility in advancing the fight against the climate crisis.

“We reject the false choice between preserving the economy and protecting the environment. Climate action will enhance competitiveness, spark innovation, and create millions of high-quality jobs,” he said.

The statement was welcomed by Saudi Arabia’s Gulf allies, Pakistan’s prime minister Imran Khan, UN Climate Change chief Patricia Espinosa and the International Renewable Energy Agency.

Am delighted to learn of “Green Saudi Arabia” & “Green Middle East ” initiatives by my brother, His Royal Highness Crown Prince Mohammed bin Salman! Have offered our support on these as there are many complementarities with our “Clean & Green Pakistan” & “10 Billion-Tree Tsunami. pic.twitter.com/ExHSS8DUVh

— Imran Khan (@ImranKhanPTI) March 29, 2021

But the government did not say whether it would produce and export any less oil while powering its own economy with cheap solar power.

Tanzeed Alam, a climate change consultant based in the United Arab Emirates, described Saudi Arabia’s renewable ambition as “huge”.

“Coming from the world’s largest oil producer, it’s a pretty bold statement,” he told Climate Home News.

Renewables made up just 0.02% of Saudi Arabia’s final energy consumption in 2017, according to the IEA. Neighbouring United Arab Emirates aims to reach the 50% target by 2050 while its capital Abu Dhabi wants to reach it by 2030.

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Although some mountainous regions have wind power potential, Alam said the majority of this renewable energy would come from solar power generated by huge farms in the desert. The scale of the projects and the power of the sun make solar power in Saudi Arabia cheaper than anywhere else, he said.

In a December 2020 report, the International Energy Agency said: “Solar PV [power], if deployed at large scales and under favourable climatic conditions, can be very cost competitive.”

But Alam added that the Saudi government had “a lot of work to do” to achieve its 50% goal, particularly by investing in energy storage. Currently, only Iceland and Norway get more than 50% of their primary energy from renewables.

He added that investment would come from both the government and the private sector.  The government’s Public Investment Fund puts down the risk finance that supports a competitive tendering process, he said.

As well as renewables, the government said they would pursue “clean hydrocarbon” projects to make fossil fuels less polluting. Chatham House analyst Valérie Marcel said this was likely to include carbon capture and storage, cutting methane leaks and the use of renewable energy to extract fossil fuels.

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Experts told Climate Home News that while Saudi Arabia’s tree-planting ambition was welcome, it isn’t clear how they plan to plant 10 billion trees in the third-driest country on earth.

According to the Saudi Press Agency, 10 billion trees will be planted across the Kingdom “in the upcoming decades” and an additional 40 billion will be planted across the Middle East.

Currently, just 0.5% of Saudi Arabia is forest and the Middle East’s tree cover is mainly limited to the Mediterranean coast.

Environmental economist Kenneth Richards told Climate Home News: “It is not unprecedented for massive tree planting to experience high mortality rates due to local conditions. Given the potentially harsh climatic conditions in the regions that these two initiatives appear to be targeting, it is not difficult to imagine a similar problem.”

But Tanzeed Alam, a climate change consultant based in the United Arab Emirates, said areas prone to desertification had once supported vegetation. “You think about Saudi and you think ‘OK, it’s just a desert’. It’s not. There’s a lot of areas which are quite fertile and have been increasingly desertified.”

In the 1950s, the Saudi Arabian state abandoned a traditional sustainable land management system called Al Hima, Alam added. Instead, the government took control of tribal land and encouraged crop cultivation, which strained water resources.

I congratulate Saudi Arabia for the new Saudi Green Initiative and the Green Middle East Initiative that aim at planting 50 billion trees in the region.

We need #climate action from all in the. I look forward to seeing these efforts reflected in ambitious #NDCs.

— Patricia Espinosa C. (@PEspinosaC) March 30, 2021

Nina Lindstrom Friggens, a soil ecologist who has researched tree planting in Scotland, told Climate Home News the Saudi government had to consider the wider implications of a massive tree planting initiative on local water resources and ensure the project is managed sustainably.

“It is always encouraging to see governments discussing climate mitigation but it is important to understand that there are no simple solutions, and a holistic approach, which takes into account not just carbon sequestration but also land and water resources, biodiversity and livelihoods will be the key to sustainable mitigation,” she said.

Alam suggested that the Arab peninsula’s iconic ghaf trees would be a good choice, as they live a long time, don’t use much water and support biodiversity.

He said the Al-Baydha restoration project could be an example of sustainable land restoration. This was a project led by scientist Neal Spackman, and praised by the Saudi government for reversing desertification by harvesting rainwater and planting drought-resistant date palms.

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A joint statement from the group of major economies on Monday focused on stabilising energy markets disrupted by the coronavirus pandemic. After a two-day virtual meeting, ministers pledged to collaborate “to encourage dialogue to help mobilize public and private investment in various energy sectors”.

Discussion of energy efficiency and renewables was put in the context of a “circular carbon economy”, with equal weight given to reusing and removing carbon dioxide from the air.

Saudi energy minister Prince Abdulaziz bin Salman insisted when he set out the circular carbon strategy earlier this year: “Carbon is not the enemy.”

The G20 communique described it as “a holistic, integrated, inclusive, and pragmatic approach to managing emissions that can be applied reflecting country’s priorities and circumstances”.

Countries promise green recovery at Japanese virtual summit, keep quiet on fossil fuel bailout

Climate campaigners criticised the emphasis on commercially unproven technology, saying it was a way for oil-rich Saudi Arabia to justify unsustainable use of fossil fuels.

“Circular carbon economy is clearly a Saudi priority,” said Enrique Maurtua Konstantinidis, G20 campaigner at Climate Action Network (Can). “While the concept looks noble, the idea puts a particular attention to the use of the carbon capture use and storage, geoengineering practices that are heavily criticized by civil society due to the yet unknown environmental impacts and the distraction it creates from the real solution, which is reducing emissions.”

Eddy Perez from Can Canada told Climate Home this year’s G20 chair Saudi Arabia was “stuck in the past and unable to accept the green and just transition [to clean energy] that is already well under way”.

He added: “At a moment where decisive action is expected from leading economies to respond to the health, economic, social, climate and biodiversity crises, Saudi Arabia has managed to make the G20 irrelevant and disconnected from the reality of this year.”

Ivetta Gerasimchuk, of the International Institute for Sustainable Development, said the G20 has become less and less ambitious since it started hosting summits in 2008. The energy ministers’ joint statement, she said, “just lists what countries are doing anyway, rather than what they should be doing”.

Saudi Arabia censors fossil fuel subsidy discussion as G20 host

Arab News, which is closely linked to the Saudi government, reported some European countries pressed for a stronger stance against fossil fuels but the Saudis’ “more inclusive stance on hydrocarbon resources” was supported by Russia and the USA.

At G20 meetings on agriculture and the environment, ministers failed to agree a joint statement due to similar divides over climate change.

Commenting on this, Germany’s agriculture minister Julia Klöckner, said by email: “The younger generations expect the agriculture ministers to speak out about climate change. No other sector has been hit as hard by climate change as the agricultural sector.”

According to Energy Policy Tracker, G20 nations have committed $206 billion to sectors linked with fossil fuel production and consumption in coronavirus stimulus packages. Only $137bn has been earmarked for sectors linked with the production and consumption of clean energy.

Since 2009, the G20 has repeatedly pledged to remove fossil fuel subsidies. That was not mentioned in the latest statement.

In July, Climate Home revealed that the Saudi authorities were uncomfortable with the word “subsidies” and sought to remove it from policy briefs produced by ostensibly independent research groups. They preferred a phrase with no established definition – “fossil fuel incentives”.

The G20 leaders’ summit will be held online in November 2020 before Italy takes over the G20 Presidency. Perez said he “look[s] forward to an Italian G20 presidency who will seize its opportunity to preside over the forum representing 80% of the global economy to present a much more relevant, ambitious and safer vision for a world responding to multiple subsequent crises.”

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Typically, nearly two million Muslims visit Mecca for the annual pilgrimage, a pillar of the Islamic faith. Another 1.8 million come throught the year for smaller pilgrimages (umrah). Covid-19-related restrictions are creating a gap in what is one of the most important sources of revenue, besides oil, for Saudi Arabia.

“We haven’t had a guest since March,” said a hotel manager for a four-star hotel in Mecca, who asked not to be named. “Both Ramadan and hajj, which are our most profitable times, have been spent more or less in a lockdown.”

The collapse of religious tourism is a blow to Saudi plans to diversify the economy away from oil. At the same time, a slump in the oil price shows the risks inherent in continuing to rely on fuel exports for revenue.

Analysis: This oil crash is not like the others

With the International Monetary Fund predicting a 7.6% shrinkage of the overall Gulf economy this year due to the coronavirus outbreak, Riyadh has several reasons to worry.

“Indeed, the imposition of state lockdowns to lessen the spread of Covid-19 led to a great deal of travel and mobility restrictions; consequently contributing in part to reduced global oil demand and oil prices, which in turn has negatively affected Saudi oil revenues,” says Matthew McIntosh, a political risk analyst for the Atlas Institute for International Affairs.

The decline in oil prices, combined with slowdowns in both domestic and global economic activity due to Covid-19 containment policies, caused the Saudi economy to contract by 1% in the first quarter  of 2020. Q2 numbers are not expected to be any better.

And with oil exports dropping by 41.2% in May, Saudi Arabia is now said to be “considering all options” to support its economy.

Finance minister Mohammed Al-Jadaan outlined some of the measures under consideration during a virtual forum organized by Bloomberg last week.

Plans include the possibility of privatizing state-held assets in the healthcare, education, and water utility sectors. That could raise as much as $13.3 billion over the next five years, said Al-Jadaan, who also hinted that the country might introduce an income tax.

Saudi Arabia, like other Gulf states, has traditionally been tax-free for individuals and thus an attractive haven for foreign workers. Government sources categorically denied having any plans to change that.

“Income tax is not, at all, being discussed at any of the government councils or committees,” an official in Riyadh, who was not authorised to speak on the record, told Climate Home News.

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These financial challenges are raising concerns among experts on whether Saudi Arabia will continue to work on its “Vision 2030” diversification plan. The plan is meant to create new industries and jobs in the kingdom, with entertainment and tourism one of the focus areas.

While both sectors enjoyed a temporary boom after tourist visas were launched in 2019, travel restrictions are creating a dent in the non-oil sector growth projections.

Investments announced last year to build leisure and entertainment complexes for tourists face an uncertain future.

“Economic diversification is an expensive initiative – even during times of economic prosperity, as government capital can be directed towards diversification projects. Yet, with this economic contraction and a reduction in oil revenues, the country’s budget is certainly challenged,” added McIntosh.

A BNN Bloomberg analysis of an Okaz newspaper report indicated that $8 billion is being cut from Vision 2030, meaning that various projects could be delayed or cancelled.

Lola Vallejo, director of the climate programme at French think tank Iddri, however, said the dramatic fall in the global demand for crude oil should “hit home that relying on oil for nearly three-quarters of government’s revenues makes Saudi Arabia dangerously vulnerable economically and socially”.

“It is vital for Saudi Arabia to deploy economic diversification policies, in order to tackle structural issues such as youth unemployment,” she said. “Logically, this should cause Saudi Arabia to ramp up plans to diversify its economy and follow the international momentum to put clean energy at the center of the economic recovery.”

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The move seems to go against a 2009 commitment by the club of major economies to phase out “inefficient fossil fuel subsidies that encourage wasteful consumption”. Leaders have reaffirmed this pledge at every summit in the past decade.

Sources close to the G20 preparations told Climate Home News the Saudi authorities were uncomfortable with the term “subsidy” and asked for the word to be removed from policy proposals.

Instead of “fossil fuel subsidies” ­– an established concept in the energy literature – they inserted “fossil fuel incentives” – a term with no commonly agreed definition.

The edits came in the final stages of Think20, which engages researchers and academics from the international community to thrash out policy recommendations on a range of G20 priorities. Their work is meant to be independent from national governments.

Researchers expressed concern the term “incentives” would muddy the waters at a time when countries need to move away from supporting coal, oil and gas and accelerate the transition to clean energy.

“The word incentives takes the idea of fossil fuel subsidy in a very different direction,” one person close to the process told CHN. “Let’s make sure that we are not defining loopholes for the continued use of fossil fuels.”

A spokesperson for the G20 secretariat told CHN the “independent participation of engagement groups in G20 discussions is important for the Saudi G20 Presidency and we are fully committed to an independent, open, transparent and inclusive process”.

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Last week, UN secretary general António Guterres ramped up his rhetoric urging leaders to end fossil fuel subsidies and use the recovery to the pandemic to accelerate the clean energy transition.

“Fossil fuels are increasingly risky business with fewer takers,” he said during an International Energy Agency conference. “We need to stop wasting money on fossil fuel subsidies and place a price on carbon.”

Although definitions of what constitutes a “subsidy” varies between global institutions, the term “fossil fuel subsidy” is widely used to describe any government support for oil, gas or coal activities that lowers the price paid by consumers, raises the price received by producers or lowers the cost of production.

“The definition of a subsidy has always been a problem for Saudi Arabia,” Tom Moerenhout, an associate at the International Institute for Sustainable Development (IISD) told CHN.

As the world’s largest oil exporter, with low production costs, Saudi Arabia has been able to sell its oil below international price benchmarks.

At home, the Kingdom provides cheap energy to its citizens as part of a social contract whereby Saudis cannot choose their leaders but benefit from generous welfare provision.

The Kingdom denies subsiding petrol, arguing it is selling its oil at an “internal price” above production costs.

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In recent years, Crown Prince Mohammed bin Salaman has been leading efforts to diversify the economy and move the country away from its oil dependency. To pay for an ambitious economic programme known as “Vision 2030”, Riyadh has embarked on an energy subsidy reform, raising energy prices closer to world market prices.

“Saudi Arabia has always been concerned not to destroy oil demand and keep its market share,” said Glada Lahn, a senior energy and resources research fellow at Chatham House. Saving a major domestic crisis, “their easy-to-produce oil has a longer shelf life than most”.

As G20 host, Saudi Arabia has been using its platform to promote the idea of a “circular carbon economy” which would reduce emissions but still allow for fossil fuel production by using technologies such as carbon capture, utilization and storage, and hydrogen.

Lahn described it as an attempt to “clean up the image of oil and gas”. “There is going to be much more scrutiny on the support for fossil fuels globally and the Saudi government is desperate for foreign investment,” she said. But the plan should not be promoted as a one-size fits all, she added.

In the 10 years since the G20 promised to phase out “inefficient fossil fuel subsidies”, limited progress has been made to meet the goal. The latest expert stocktake shows G20 countries subsidised coal, oil and gas to the tune of $150 billion in 2016, including both production and consumption subsidies.

In 2019, government support for fossil fuels totalled $478 billion in 77 countries, according to more recent analysis by the OECD and the IEA. While consumer subsidies had fallen slightly, the data showed a 38% rise in support for the production of fossil fuels across 44 advanced and emerging economies compared with 2018.

Big nations aid fossil fuels more than clean energies amid pandemic, researchers find

And despite talks of a “green recovery”, the coronavirus pandemic has done little to reverse the trend. A study by 14 research groups found G20 nations collectively spent at least $151 billion on supporting fossil fuels in their Covid-19 recovery packages, with only 20% of the relief conditional on green requirements.

In contrast, the world’s richest economies committed $89 billion to clean energy. The findings will be regularly updated on the Energy Policy Tracker, which launched on Wednesday.

As part of efforts to weather the economic impacts of the pandemic, Riyadh announced a $240 million package to provide electricity price relief for commercial, industrial and agricultural sectors.

“Money is not going in the right direction,” said Ivetta Gerasimchuk, an energy expert at IISD who led the Energy Policy Tracker project.

“The Covid-19 crisis and governments’ responses to it are intensifying the trends that existed before the pandemic struck. National and subnational jurisdictions that heavily subsidised the production and consumption of fossil fuels in previous years have once again thrown lifelines to oil, gas, coal, and fossil fuel-powered electricity.”

The story was updated on 15/07/20 to include the findings of the Energy Policy Tracker. 

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The state oil producer netted $111 billion in 2018, more than tech giants Apple and Alphabet combined, it revealed in a bond prospectus.

It is aiming to raise funds to buy petrochemical company Sabic, as part of Saudi Arabia’s strategy to diversify its economy away from crude oil.

Saudi Aramco will continue to be “significantly impacted” by the international oil price, the document noted, warning: “Climate change concerns and impacts could reduce global demand for hydrocarbons and hydrocarbon-based products and could cause the company to incur costs or invest additional capital.”

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Climate policies such as renewable energy mandates, carbon pricing and energy efficiency standards are expected to dampen demand for fossil fuels, it said. Trends in electrification of transport and clean energy prices will also be critical.

Meanwhile the company faces legal challenges over the role of its products in causing climate change. On 2 July 2018, US state Rhode Island sued oil and gas companies including Motiva, an Aramco subsidiary, for damages to coastal infrastructure. “Claims such as these could grow in number,” the note said, and “litigation could result in substantial costs”.

Peter Barnett, a climate lawyer with ClientEarth, agreed. “Climate litigation is gathering pace as citizens, cities, states and shareholders seek accountability for continued reliance on fossil fuels as the impacts of climate change are increasingly acutely felt,” he said. “As Saudi Aramco’s prospectus underscores, climate litigation is now of mainstream financial concern to fossil fuel-exposed companies and their investors.”

Saudi Aramco dismisses peak oil demand ‘hype’, touts carbon efficiency

These caveats did not stop agencies Fitch and Moody’s giving the company a solid A+/A1 credit rating, judging it a fairly safe bet for investors.

Saudi Aramco’s relatively low cost oil production makes it better placed than many competitors to weather the global transition to clean energy.

To meet the goal of the Paris Agreement to hold global warming below 2C, oil will ultimately need to be phased out. In the short term, though, climate models allow a budget for its continued role in the energy mix.

Less than 10% of Saudi Aramco’s capital spending to 2025 falls outside that 2C budget, analysts at Carbon Tracker judged in a 2018 ranking of 72 oil companies. That compares to 20-30% for Exxon Mobil, Total and Petrobas, or up to 60% for US-based Energen.

Saudi Arabia also wastes less energy in the extraction process and through gas flaring than most oil-producing countries, a 2018 study in Science found.

For all these advantages, Saudi Aramco is not immune from pressure on the sector to shift investment into renewable energy. At a conference in February, its chief Amin Nasser described a “worrying and growing belief among policy makers… and many others that we are an industry with little or no future”.

Crown prince Mohammed bin Salman in 2016 proposed floating part of the company on the stock exchange. If that ever comes to pass, it will only bring more scrutiny on its carbon and financial accounting.

Shareholder resolutions on climate change have become a regular feature of AGM season for publicly listed companies. Several oil majors have bowed to calls to disclose what the 2C warming limit means for their business. The next ask is to set emissions reduction targets in line with the Paris Agreement goal – a proposal Exxon Mobil is trying to block.

Another focus for activists is the mismatch between companies’ climate-friendly rhetoric and covert support for lobbying against climate policies. Shell revealed on Tuesday it was quitting the American Fuel & Petrochemical Manufacturers over its climate stance – but staying in the controversial American Petroleum Institute.

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That’s rich. In the North Sea oil fields, Britain is propping up a dying industry. Multi-billion tax breaks, supplemented in the 2017 budget, are given at the expense of diversifying the economy towards lower-carbon energy sources. In 2016, the UK’s oil and gas industry not only failed to bring in any tax revenue, but generated a net cost of £396 million to the government.

May could learn a thing or two from the Saudis about the strategy behind sunsetting the petroleum sector.

As long ago as the 1970s Sheikh Zaki Yamani, Saudi Arabia’s oil minister and one of the OPEC masterminds said: “The stone age did not end for lack of stones, and the oil age will end long before the world runs out of oil.” Saudi Arabia’s leadership well understands the fundamental shift in energy markets due the plummeting cost of renewables and other innovations.

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The consequence is the “green paradox”, a phenomenon described by the German economist Hans-Werner Sinn. An anticipated transition away from fossil fuels provokes their producers to accelerate the extraction of oil, gas and coal. This is exactly what happened over 2015-2016 when Saudi Arabia, with its world’s lowest cost production, chose to flood the market with cheap oil in competition with Iran and US shale gas over market share.

In doing so, Saudi Arabia drained its tax revenues – and those of all other oil-producing nations from Iran to the UK. This led to an unprecedented budget deficit for the country, estimated at 12% of GDP in 2017.

Saudi Arabia took important steps and used the budget deficit as a context for phasing out fossil fuel consumer subsidies, estimated at $71.3 billion in 2014. For decades, Saudi Arabia’s consumer prices for energy were among the lowest in the world, distorting the level playing field for renewables and making them uncompetitive.

The new fiscal pressure created the sense of urgency for this much-needed change that would otherwise be stifled by the political economy. In 2015 Saudi Arabia raised retail gasoline prices by about 50% and is considering further price increases in 2017.

Into the abyss: oil states face turmoil as climate policies bite

Saudi Arabian leaders more and more frequently speak about “leaving oil behind” and diversifying into the new economic activities including new energy technologies, particularly solar. In 2016 Saudi Arabia launched its Vision 2030 and the National Transformation Programme that deserves praise for a focus on renewables.

Prime Minister May’s programme of meetings with King Salman and other counterparts in Riyadh included a pitch for Britain’s strategic role in advising Saudi Arabia on implementation of the Vision 2030 and “tax and privatisation standards” for the initial public offering (IPO) of Saudi Aramco, the world’s largest petroleum company.

It is not difficult to imagine what kind of tax advice can come from the UK experts: more tax breaks. Indeed, at the end of March 2017 Saudi Arabia cut the corporate income tax rate from 85% to 50% – which is estimated to have boosted Aramco’s capitalisation by roughly $1 trillion.

Whereas UK tax cuts have come in the context of falling revenues to government from oil and gas, the Saudi cut will allow the government to raise much more money (at least in the near term) from the IPO.

Report: Indian oil majors prepare for electric vehicle boom

Unfortunately, both types of subsidies to fossil fuel production unlock “zombie energy”, encouraging oil consumption worldwide and driving more emissions. A recent study by the International Institute for Sustainable Development and the Overseas Development Institute estimated that a complete removal of subsidies to fossil fuel production globally would reduce the world’s emissions by 37 Gt of CO2 over 2017-2050, equivalent to global aviation emissions over the same period.

It is high time the UK stops trying to export its “expertise” on subsidising oil and gas production around the globe and rethinks how to use public resources for the low carbon future. The question is not if the oil age will end, but when, and how disruptive this end can be.

A much more useful avenue for UK’s cooperation with Saudi Arabia and other petroleum-producing nations would be to agree on a plurilateral plan to manage the fossil fuel industry’s decline in a just, transparent and predictable way. The first step should be elimination of tax breaks for the petroleum industry and other fossil fuel subsidies.

Ivetta Gerasimchuk and Peter Wooders are energy experts at the International Institute for Sustainable Development and Shelagh Whitley leads the climate and energy programme at Overseas Development Institute

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On Sunday, Climate Home reported that president Abdulla Yameen Abdul Gayoom and Saudi Arabia had agreed a massive development project would be placed on Faafu atoll.

The former president of the Maldives Mohamed Nasheed and foreign policy experts raised the prospect that the move was aimed at installing a permanent Saudi presence along that country’s vital oil trade routes to China.

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On Tuesday, the president’s office issued a statement that said: “The Administration categorically rebuts allegations that the atoll has been ‘sold off’ to a foreign entity…

“The Government of Maldives’ plans to develop Faafu atoll, and other regions for the country, is focused on delivering positive outcomes for Maldives and its people. Foreign investment is not out of the ordinary in this region, or for that matter anywhere else.”

President Yameen said: “Much like our friends in both the East and West, we remain an open and valued player in the global economy, and should be afforded the ability to expand our economy to propel more and more Maldivians towards middle income status.”

Few details of the government’s plans have been released to the public. Yameen has said the entire investment spend will be US$10 billion – three times the Maldives GDP. He said last week that the proposal would be made public “once the negotiation process was completed”.

That scale of investment was welcomed by some Maldivians, while others decried the prospect of such a dominant Saudi influence. Protests were held on Faafu last week.

Report: Saudis make Maldives land grab to secure oil routes to China

The Maldives government has a history of corruption surrounding land sales. Last year, Al Jazeera revealed a racket that saw cash from foreign land investors disappearing – some of it was traced to Yameen’s personal bank account.

Transparency International’s 2016 Corruption Perceptions Index ranked the country 35 out of 100 – below the global average.

Speaking to Climate Home in London last week, Nasheed said the Saudi investment, coupled with an effort to spread Wahhabism in the islands, was part of a strategy to protect Saudi supply lines to the far east.

“One of the issues with these kind of hidden deals is that it encourages corruption and through corruption you can subvert states,” said Nasheed.

Yameen’s official statement did not specifically address the lack of transparency.

“All infrastructure projects strictly adhere to regulations and boundaries set out by the Maldivian constitution,” it said. The statement also said environmental laws would be respected as the atoll was developed.

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The move could prefigure a Chinese military expansion into the heart of the Indian Ocean, one observer said.

The economic future of the Saudi petro-kingdom is bound to the sale of oil, gas and other goods to China. The supply lines for that trade run through the Indian Ocean, where terror is a growing concern and vessels are shadowed by piracy.

The ships also pass by the Maldives – an 820km-long chain of atolls southwest of the tip of India. In this small country, with its growing Wahhabist majority and autocratic government, the Saudis have found – or, according to the Maldivian opposition, created – a pliant ally where few questions are asked and fewer are allowed.

Last week, unconfirmed reports emerged that the Saudi government intended to buy one of the atolls, Faafu – a collection of 19 low-lying islands 120 kilometres south of the capital Malé and home to 4,000 people.

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President Abdulla Yameen Abdul Gayoom has denied the entire atoll will be sold to the Saudis, but said plans for a “mega project” worth US$10 billion – three times his country’s GDP – would be disclosed “once the negotiation process was completed”.

Former-president and opposition leader Mohamed Nasheed said the reported sale of Faafu, which has been subject to no public tender process, was “disturbing”.

“[The Saudis] want to have a base in the Maldives that would safeguard the trade routes, their oil routes, to their new markets. To have strategic installations, infrastructure,” he said.

On Friday, worried Faafu locals mounted a protest on the island of Biledhdhoo, under a heavy police presence. Earlier in the week, the Maldives Independent reported that two of its journalists in the atoll had been detained overnight by police.

Maldives police had issued a written warning against any demonstration that might embarrass a visiting foreign leader. Saudi king Salman bin Abdulaziz and his entourage are set to spend two weeks in the Maldives at the end of March, as part of a tour of Asia.

People of Faafu Biledhoo protesting against sale of faafu atoll to the Saudi King. #SaveFaafu pic.twitter.com/h1JvsoORAx

— Shauna Aminath (@anuahsa) March 3, 2017

Ahead of #Saudi King Salman visit, #Maldives police warns strongly against any/all forms of expression that may ‘belittle’ visiting leaders https://t.co/o40Fb1RXyS

— AzraNaseem (@Manje) March 1, 2017

At a briefing for international journalists in Malé, housing minister Mohamed Muizzu said he hoped it would be a big investment: “We don’t want to move slowly; we want transformational change. That is the whole mentality of this government. We want to bring better living conditions to this country on a large scale, in a small period of time.”

Protests against the deal were “not in the best interests of the country,” he added. “A responsible opposition would always give support to the government and the people for whatever project that is beneficial to the country. That has been the case in all the other democracies as well.”

Opposition MP Eva Abdulla – a cousin of Nasheed – told Climate Home: “With Faafu or any other project, we are told there will be a trickle-down effect. That is not what we have seen. It is government MPs and their cronies who get all the benefits.”

Nasheed was the nation’s first democratically-elected president and was removed in what his supporters describe as a “coup” in 2012. He now lives in exile in London, where he met Climate Home at a hotel restaurant.

He said scholarship programmes for young islanders to study in Medina or Mecca have facilitated the spread of Wahhabism, the founding faith of the Saud dynasty. This cultural campaign laid the groundwork for an “unprecedented” land grab.

The view from Malé

At the city beach on Saturday, children splash about in a small enclosed section of lagoon. Mohamed is with his wife and sister-in-law, who retreat to a bench five metres away when asked questions.

A member of the Maldives military, Mohamed asks not to use his full name because he has seen people lose their jobs for criticising the government. A wrong word could also jeopardise his chances of getting a new apartment in Hulhumale, the reclaimed island next to the airport.

“In my opinion, that is not good to give too much long term… it is the Maldivian property,” he says of the rumoured Faafu atoll sale.

Roughly half the population of the Maldives lives on tiny, overcrowded Malé. (Photo: Shahee Ilyas)

He describes approvingly a shift towards conservative Islam in recent years. “Mixed dancing with short clothes” is no longer accepted. “If it is in resorts then it will go well, [but] normal people cannot see that… Little boys and girls, they get a bad image.”

One of his wife’s sisters got a scholarship to study business administration in Saudi Arabia and religious experts visited during Ramadan, the holy month of fasting.

“Nowadays, people are well educated, many religious people are there and because of this, people know what is in the religion. When I was my son’s age, I don’t know what is religion, I just follow my mum and dad.”

Khathma, a school teacher visiting Malé for the weekend from Himmafushi, 17km away, has heard about protests on Faafu even though they were not on the TV news. “It is not a good thing, right, because that is our islands, Maldives islands,” she says.

Not everybody opposes the deal. Firushan and Fathun sit toying with their smartphones under a palm tree. They met on Facebook and hope to get married soon.

Firushan does not like overcrowded Malé, where he shares a small room with a friend – “it is a bad dream” – but has been obliged to come here for rehabilitation from a marijuana habit. They will stay until Fathun has completed her training to be a nursery school teacher.

A billboard, featuring president Yameen, advertises the government’s green development plans. (Photo: Megan Darby)

He points at the China-Maldives “Friendship Bridge”, one of the biggest infrastructure investments in the country. “We have seen it, it is a good investment here, so I guess as well it [the Saudi investment] is a positive…

“I don’t see any harm in it. If the country goes forward, then everybody should be happy. If my islands are getting that kind of investment, I would appreciate it. Every atoll is competing with Malé.”

In the fish market, standing over a slab of gleaming local tuna, Adnan Siraj says he trusts president Yameen to get a good deal for the Maldives. He speaks in Dhivedi and Moussa Afeef, a self-appointed guide who runs a nearby souvenir shop, translates.

Dried fish seller Abdulla Youssef shakes his head emphatically when asked about the Saudis. “I don’t like,” he says in English. He has nothing against the people – good Muslims – but is not happy about ceding territory to foreigners.

Ibrahim Thoufeg, who sells sweet potatoes and carrots imported from Sri Lanka as well as Maldivian bananas and chili peppers, takes a similar view. “Saudi is good, the country is good,” interprets Afeef, but “he is not really happy to sell to any other countries these islands.”

“[The Saudis] have had a good run of propagating their worldview to the people of the Maldives and they’ve done that for the last three decades. They’ve now, I think, come to view that they have enough sympathy for them to get a foothold,” said Nasheed.

In February, the Saudi embassy in Malé was criticised for handing out sealed envelopes filled with cash to local Maldivian journalists at an event. The embassy described them as “gifts”. On Saturday, it was reported that the Saudi national airline was doubling the number of flights from the kingdom to Malé.

Foreign land ownership was illegal in the Maldives until 2015, when the Yameen government passed an amendment to the constitution. Nasheed compared Saudi acquisition of Faafu to China’s building of military facilities on islands in the South China sea.

“This is far more devious, because they hide inside you and they come out when they want to,” he said.

In exile: former Maldives president Mohamed Nasheed sought asylum in London after he was allowed to leave prison in the Maldives to receive medical treatment. (Photo: Karl Mathiesen)

Dr Theodore Karasik, senior advisor to Gulf States Analytics in Washington DC said the motivation for the Saudis was unlikely to be militaristic.

“Saudis are not going to set up bases anywhere else. Saudi uses allies and proxies to try to achieve strategic and tactical goals… [Their intention is] to build up a network of allies that form a logistical chain from the Gulf to east Asia and back,” he said.

US imports of Saudi oil have steadily declined since a 2003 peak, falling 40%. Growing demand in China offers a new opportunity for the kingdom. But it is not without competition. In 2016, Saudi Arabia was overtaken by Russia as China’s largest source of oil.

Last year, the kingdom unveiled an economic restructuring plan called “Vision 2030” that points towards deeper economic ties with east Asia. Karasik says the Indian Ocean supply chain is “absolutely critical” to the success of the plan.

King Salman is on a tour of the countries along that supply chain, striking deals and announcing investments in Malaysia, Indonesia, Brunei, Japan, China and finally the Maldives.

“Saudi partnership with other countries will be required to ensure that freedom of navigation remains and that piracy and terrorism doesn’t occur,” said Karasik.

Saudi Arabian King Salman bin Abdulaziz (Photo: Erin A. Kirk-Cuomo)

The employment of the Maldives as a strategic anchor for future oil trade rubs against the country’s vulnerability to climate change. It is the lowest-lying country on earth, with a high point of just 2.4m, meaning even small rises in sea level could be devastating. (Nasheed rose to international prominence for his advocacy on the issue as president.)

According to the International Energy Agency, oil demand in China must peak within a decade for the 2C temperature goal of the Paris climate agreement to be met – even more radical cuts will be required for survival of communities in the Maldives according to the government’s own statements.

Though the physics of climate change are inexorable, geopolitical forces are also overwhelming these islands. In August 2015, Salman and Chinese premier Xi Jinping signed a cooperative agreement on China’s One Belt, One Road initiative – the cumulative term for the New Silk Road and the Maritime Silk Road that China has outlined as its key strategic supply lanes (see figure below).

This has coincided with a widening of Chinese interests in the Maldives. The Chinese premier, Xi Jinping visited the islands in 2014, announcing the construction of a US$210 million “Friendship Bridge” connecting Malé to its airport island. China is also financing an extra runway at the airport and intends to develop a port on Laamu atoll, which lies south of Faafu. The Maldives, once tied to India for its economic survival now owes 70% of its external debt to China.

Chinese-owned or financed port locations (existing and proposed) along the Maritime Silk Road. Maldives marked with red rectangle. (Source: Institute for the Analysis of Global Security)

Cleo Paskal, associate fellow at Chatham House and author of Global Warring: How Environmental, Economic, and Political Crises Will Redraw the World Map, said the Saudi purchase of Faafu could lay the foundation for China to extend its military reach in the Indian Ocean, securing Saudi and Chinese interests.

“China is on record as wanting a base in the Maldives,” she said. “It was a big issue in 2015. It already has or is working on ‘commercial’ ports in several countries along the route from the Indian Ocean to China and recently opened an overtly military naval base in Djibouti. Saudis are unlikely to build anything like that for themselves, but may facilitate the construction of some sort of ‘resupply’ installation built by China that would likely have dual use capacity.”

She said this would raise concerns in Delhi, which has courted its neighbours. It would also place the Chinese military very close to the US base at Diego Garcia. The US state department did not respond to requests for comment.

Ankit Panda, senior editor of The Diplomat, cautioned against ascribing long term strategic motivations to the Faafu deal – should it eventuate. He said the purchase was clearly part of the Saudi programme to diversify its economy from oil, but that the Maldives may be playing a longer game.

“The geopolitical layer to this, in my view, is more on the Maldivian side for now. The Saudis are looking primarily for a strategic investment opportunity,” said Panda. “The [Maldives’] leadership understands its strategic location in the Indian Ocean and sees a Saudi outpost there potentially paying dividends in the future.”

It was also likely, said Karasik, that the Saudi visit would be accompanied by the announcement of an investment in the country’s newly-created national oil company, MNOC. A UK company, Zebra Data Sciences, has been linked to further exploration after the government announced that initial prospecting had found deposits of oil and gas in the atolls.

Energy and environment minister Thoriq Ibrahim told Climate Home: “What the country needs now is to use the resources we have. We don’t know yet [whether there are viable oil reserves]. There was a research team here.”

All of this investment, said former president Nasheed, was happening without transparency. This was particularly problematic given the Yameen government’s history of corruption. Last year, an Al Jazeera documentary revealed a land deals racket that saw cash from foreign buyers going missing – some of it ending up in Yameen’s personal bank account.

“One of the issues with these kind of hidden deals is that it encourages corruption and through corruption you can subvert states… This is fairly unclear territory we are going into,” said Nasheed.

Megan Darby’s travel to the Maldives and accommodation was paid for by the Maldives government.

Note: an amendment was made to correct the date of the end of Nasheed’s presidency and to clarify Eva Abdulla’s familial relationship to Nasheed. A quote from Muizzu was extended to reflect that he felt the opposition should support the interests of the country.

The post Saudis make Maldives land grab to secure oil routes to China appeared first on Climate Home News.

Asked about the chances of the US quitting the Paris Agreement, Al-Falih said “I don’t know about this,” and added: “I think he wants a mixed energy portfolio that includes oil, gas, renewables and make sure the American economy is competitive. We want the same in Saudi Arabia.”

https://www.youtube.com/watch?v=qco2OWcEMSA

The post Saudi oil chief hails Trump’s ‘realistic’ energy plans appeared first on Climate Home News.

HSBC, JP Morgan Chase and Credit Suisse are among the banks vying to help the oil-rich Kingdom start its transition towards a low carbon future.

“First investments under the plan could occur this year,” reported Bloomberg, which broke the news that Riyadh planned to diversify away from oil and gas back in 2015.

Current Saudi clean energy targets include 10 gigawatts from wind, nuclear and solar by 2023. By 2030 the government wants  to secure 30% of power from low carbon sources.

Analysis: Can Saudi Arabia’s regime survive in a greener world?

The post Saudi Aramco planning $5 billion clean energy binge appeared first on Climate Home News.

Speaking at the annual IRENA renewable energy summit in Abu Dhabi, al-Falih reiterated the Kingdom was committed to sourcing 30% of power from non-fossil sources by 2030.

“There will be significant investment in nuclear energy,” said the influential oil chief, adding: “We will connect to Africa to exchange non-fossil sources of energy.”

Saudi ministers have long hinted the country would tilt towards major solar investments, but progress has been slow in a country heavily reliant on hydrocarbons.

In 2013, the government said it planned to invest $109 billion to build over 50 gigawatts of renewables by 2030; currently its largest solar farm is a 10 megawatt installation in Dhahran.

Under the 2015 Paris climate agreement Saudi Arabia offered little in the form of emission cuts, but last year Riyadh outlined plans to diversify away from oil.

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For an article published on Wednesday, Climate Home spoke to concerned security specialists about the serious challenge this poses to countries that currently rely on the commodity to pay for everything from their armies to their food supply.

Here we profile Saudi Arabia, the world’s biggest producer of crude.

The country’s US$600bn sovereign wealth fund has provided a buffer for the national budget, which has suffered deficits since the recent oil price crash that the Saudis helped precipitate in an effort to kill US production. But that fund is dwindling, with one senior government advisor warning it would run out in less than a decade at current oil prices.

Fundamental for all petrostates will be finding new ways to maintain prosperity. In Saudi Arabia’s case, that raises deep questions about who the wealth is meant for.

The younger generation “are asking for something different”, says Glada Lahn, a resource and energy research fellow at Chatham House. There is great hope vested in the reforms promised by 31-year-old deputy crown prince Mohammed bin Salman al-Saud, who has cult status among young Saudis of a certain economic class.

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Meanwhile, says Lahn, Saudi citizens are aware that they are surrounded on all sides by conflict and potentially dangerous enemies.

This means relative acquiescence to the regime both spending huge amounts on its military as well as cutting some of the benefits associated with oil wealth.

However, she says: “If one of the justifications for legitimacy crumbles then you’ve got the potential for descent into instability.”

This is a “non-trivial security threat”, according to E3G executive director Nick Mabey, who raises the prospect of disenfranchised Saudi youth becoming targets for radicalisation.

In a report released last month, professor Paul Stevens, Lahn’s Chatham House colleague, wrote that since the Arab Spring, Gulf states have “come to consider an inability to buy off domestic political discontent arising from lower spending as potentially representing an existential threat”.

He noted that there was widespread acceptance among the regimes that to stop their kingdoms falling to popular uprisings they must find other ways to keep citizens happy.

Report: Saudi Arabia working on plan to boost climate target

Progress has been fitful. Solar energy has long been touted as a beneficial industry for the sun-bathed country, but big plans to meet a target of 50% renewable energy by 2040 were slashed last year to 10% in favour of a pivot towards natural gas.

Earlier this year, Saudi Arabia announced plans for a partial privatisation of state oil entreprise Saudi Aramco – the world’s largest company. This was, said al-Saud, part of his plan to cure a country that was “addicted to oil”.

With 44% of GDP and 89% of revenue derived from the country’s oil fields and a population kept under tight state control, diversification can’t come fast enough. Qatar, Kuwait and the UAE have all made similar gestures toward privatisation of oil assets.

But the Saudi sovereign wealth fund that will take over the running of the company has been criticised for being the least transparent on earth.

Privatisation without meaningful democratic reform is unlikely to be the panacea for Gulf states seeking to divest from oil, according to Stevens. In fact, it may reinforce problems of patronage and corruption without doing anything to draw down on the ruling elite’s commitment to oil.

This could, he says, actually aggravate their people who will see the money from public offerings siphoned away into the same networks of obscure wealth as always. Instead, Stevens says, Gulf states should open up their oil markets to competition and begin the process of democratising their countries.

The post Can Saudi Arabia’s regime survive in a greener world? appeared first on Climate Home News.

Long regarded as an obstacle to a UN climate agreement, the Arab Kingdom has mollified its tone in recent years under pressure from the US and other developed countries.

With President-elect Donald Trump threatening to axe the Paris climate agreement, many assumed the Saudis could follow suit, but a representative insisted they will toughen carbon cuts.

“We are looking at it right now – we are re-evaluating our programmes to see those areas where we are advancing so we can meet our targets as soon as possible,” the source said.

“I think every country should challenge themselves… on an annual basis we are really challenging our different sectors to do more.”

Report: One week to save UN climate change talks from Trump

In a plan submitted to the UN in 2015, Riyadh said it would reduce its annual emissions from business as usual by up to 130 million tonnes of CO2 equivalent by 2030.

Analysis by independent body Climate Action Tracker rates the Saudi pledge as “inadequate” and says plans to move away from fossil fuels are too slow.

“If most countries followed Saudi Arabia’s approach, global warming would exceed 3–4C,” the CAT team say.

“The proposed abatement of 130 MtCO₂e/year is still far from what could be deemed a fair contribution by Saudi Arabia to limiting global warming to 2C.”

Under its “Vision 2030” plan the government aims to deploy nearly 10 gigawatts of renewables by 2020 and diversify the economy away from hydrocarbons.

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Agreed by 195 countries in the French capital last December, the Paris climate deal sets out a target of zero net emissions from fossil fuels and other sources in the second half of the century. It entered into legal force on Friday.

But speaking at an event in London hosted by Chatham House, Al-Naimi dismissed the notion this meant a slow but certain demise of the oil and gas sector, which underpins the Saudi economy.

“We need to work hard to eliminate emissions but there is nothing wrong with fossil fuels,” said the 81-year-old, who led the Saudi delegation at UN climate talks from 1995-2015.

Al-Naimi pointed to Saudi investments in technologies that capture carbon dioxide and inject it into oil wells to extract more hydrocarbons as evidence the industry was adapting to a low-emission future.

There's only *1* link you'll need for #COP22. Bookmark it now https://t.co/2WQUKsX9aq #climate pic.twitter.com/2ysrLGJ0FP

— Climate Home News (@ClimateHome) October 30, 2016

The remarks underline the deep challenges facing governments as they prepare for a two-week UN climate summit in Marrakech next week, where implementing the deal is a priority.

Al-Naimi said the oil-rich kingdom supported last year’s Paris climate summit, but admitted he had to fight off “nonsensical” efforts to keep fossil fuels in the ground to prevent dangerous warming.

“Work on emissions but don’t talk about fossil fuels in ground, that would be a tragedy. We should eliminate emissions but if we [eliminate] fossil fuels we will go back to the stone age.”

“I am a believer in solar – I believe it is making great strides today and we are going to see major breakthroughs hopefully soon, but that doesn’t take away anything from fossil fuels,” he added. This year, Saudi Arabia cut its renewable energy targets from 50% to 10%, protecting demand for oil and gas.

Leading oil majors are expected to announce plans for a renewable energy fund and new efficiency measures at an event in London later on Friday.

Some are already making initial investments in clean energy technologies, although this week the CEO of Total Patrick Pouyanne told investors the solar sector was facing a “new winter” due to over-capacity and low demand.

The post Paris climate deal will not kill fossil fuels, says ex-Saudi oil chief appeared first on Climate Home News.

That was revealed by energy minister Khalid Al-Falih in a foreword to the summit, on a website dedicated to the Kingdom’s role in the negotiations.

“It is encouraging to note that the Paris Agreement has achieved the threshold for entry into force, and Saudi Arabia is determined to see it implemented,” wrote the minister.

“In fact, we are updating our environmental plan to ensure timely implementation and we have managed to complete our ratification process of the Agreement before COP 22 in Marrakech.”

Saudi prince: From 2020, we can survive without oil

The Middle Eastern petropower will need to file its paperwork with the UN to officially join the deal, having completed its domestic procedures. It does not yet appear on the list of 192 signatories and 87 parties to the Agreement maintained by the climate secretariat.

While it does not explicitly refer to coal, oil and gas, the Paris Agreement implies a global phase-out of fossil fuels. To hold global warming below 2C, as countries agreed to do, analysts say more than two thirds of proven reserves need to stay in the ground.

As the world’s largest oil exporter, reliant on hydrocarbons for half its GDP, Saudi Arabia has often argued against ambitious climate goals. Yet as momentum built towards the deal last year, the Kingdom was keen to show a more constructive side.

Its contribution to the historic carbon-cutting pact focuses on economic diversification. Moves to reduce reliance on one volatile commodity will have “mitigation co-benefits” of avoiding up to 130Mt of CO2 emissions by 2030, the plan said.

Deputy crown prince Mohammed bin Salman is spearheading economic reforms he says could see the country survive without oil as early as 2020.

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“The industry has a role in playing part of the solution and meeting the commitments required by COP21 [the 2015 UN climate summit],” the influential oil minister told a meeting of executives in London.

Agreed last December, the deal outlines a global zero net emissions target in the second half of the century, effectively ruling out widespread use of fossil fuels without as-yet-unproven carbon capture technologies.

But Al-Falih avoided listing any specific policies to cut greenhouse gas emissions from oil and gas production, referring to technology investments and efficiency.

And he predicted oil and gas would form the “core” of energy supply for decades to come, pointing to China and India’s growing middle classes.

“Oil demand is expending at a reasonably healthy rate – look at the car fleet expansion in China which proves this,” he said.

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Saudi Arabia has played a leading role among the OPEC group of oil-exporting countries in keeping output at all-time highs in an effort to protect its market share against the US and other new players.

The drive has seen a collapse in oil prices from well over US$100 in 2015 to the mid-30s through 2016.

Projections these could recover to $50-60 in 2017 were “logical” he said, citing rising demand and the prospect of greater supply control from OPEC members. “There is a healthy future ahead of oil and ample growth opportunities for individual oil enterprises.”

Al-Falih, a key member in the Saudi government and one of the driving forces behind Riyadh’s new 2030 strategy to diversify away from oil, added investment in renewables and nuclear would also rise.

Gas use across the country would double he said, supplying up to 70% of utilities, while solar and wind capacity would be boosted to 10 gigawatts, enough to meet 10% of peak consumption.

“Wind and solar are going to play a very significant part of our energy mix. We’re going to localise… talking to manufacturers of solar and wind,” he said.

The post Saudi Arabia says oil industry must meet climate goals appeared first on Climate Home News.

In a 2-page submission the oil-rich Kingdom argues socioeconomic factors facing individual states should be given equal weighting to scientific reports and data.

“Policy makers need to be informed of the projected social and economic costs associated with different pathways of combating climate change in addition to environmental costs,” said the letter, dated 8 September.

“Furthermore, policy makers need to be informed of the availability and feasibility of various means of implementation, such as technology and finance, to enable them to make practical and effective decisions.”

Report: Adaptation takes centre stage as IPCC prepares 1.5C study

The intervention comes weeks after the UN’s Intergovernmental Panel on Climate Change met to start work on a report into the potential avoiding strategies and impacts of 1.5C of global warming.

Last December, 195 countries agreed to limit temperature rises to “well below” 2C and set a new aspirational goal of 1.5C above pre-industrial levels.

One study published this year suggested no new fossil fuel plants could be built beyond 2017 for the world to have a chance of avoiding 2C.

Saudi Arabia is the world’s top petroleum exporter and has long argued its reliance on hydrocarbon revenues means it would suffer in a carbon-constrained world.

A new investment strategy could radically cut its dependence on oil and gas by 2035, with $2 trillion sovereign wealth fund likely to target lower carbon and overseas investments.

The post Saudi Arabia warns UN over 1.5C climate study appeared first on Climate Home News.

German chancellor Angela Merkel and influential Saudi Arabian oil minister Khalid al-Falih revealed their intentions at the Petersberg Climate Dialogue, an annual gathering of envoys in Berlin.

“We are entering in a new phase, where renewables will be most important pillar of energy generation in Germany,” said Merkel.

The country’s new climate plan was under consideration at a federal level, she added, but hoped states could “agree our measures” shortly.

Report: Paris climate deal approval on course, say analysts

Former chair of Saudi Aramco Al-Falih said the oil-rich kingdom could formally join the Paris pact ahead of November’s annual UN climate summit in Morocco.

“We in Saudi Arabia are fully committed to the COP21 deal,” he said. Earlier this year, the government in Riyadh announced plans to diversify its economy away from oil.

While Germany must wait for all EU member states to formally ratify the deal, Saudi Arabia’s potential support could be enough to allow it to enter into force this year.

Ratification from 55 countries covering 55% of global emissions is required before the agreement – which targets limiting global warming to well below 2C – is activated.

Germany accounts for around 2% of global emissions, Saudi Arabia 1%. China (22%), India (5%), Brazil (6%) and the US (13%) are other major carbon polluters expected to join before 2017.

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“We are investing in capacity that would offset decline,” the newly appointed Khalid al-Falih told Argus Media. “We could build incremental capacity in the future, as global demand continues to grow.”

A much-publicised trillion dollar plan to wean the country off oil revenues would likely take decades. “We are not referring to three years, or five years,” he said.

“The kingdom is the country that will produce most oil. All indicators point to the fact that oil will continue to enjoy a considerable share of the market even 30 or 40 years hence.

“We see demand especially in heavy transport — such as aviation, marine, trucks and rail — and chemicals to remain healthy, while alternative technologies compete in light duty vehicles.”

#OPEC ministers have been meeting for 2½ hours already — our latest update from Vienna https://t.co/x3pF6AJJo6 #oil pic.twitter.com/i0lAg1yslT

— Javier Blas (@JavierBlas) June 2, 2016

The post Saudi oil transition to take ‘decades’ says minister appeared first on Climate Home News.

Under the proposal, the Middle Eastern kingdom will float part of national oil firm Saudi Aramco on the stock exchange and diversify its investments.

Mohammed bin Salman, the deputy crown prince behind the reforms, said this would make the economy more resilient to commodity fluctuations.

“I think by 2020, if oil stops we can survive,” he said in an interview on national television. “We need it, we need it, but I think in 2020 we can live without oil.”

Beyond oil: Petropower Saudi Arabia signals end of era

Historically, oil has accounted for 90% of national revenue. A crash in the oil price since mid 2014 has blown a hole in Riyadh’s budget, forcing it to draw on reserves.

The prince plans to increase the share of the national investment fund holdings overseas from 5% to 50% by 2020, broadening its sources of income.

Generous state welfare provision is also set to be slashed, including consumer fuel subsidies.

In its submission to the UN climate deal signed in New York last Friday, the Gulf state said its economic diversification plans would cut 130 million tonnes of CO2 equivalent a year by 2030.

Middle Eastern analyst Glada Lahn told Climate Home that was a conservative estimate and Saudi Arabia could double the savings by curbing wasteful consumption.

Full details of the plan are expected to be published in four to six weeks.

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(Pic: Rehan Jamil/Flickr)

By Jeremy Leggett

In 2016, the Kingdom of Saudi Arabia has a major opportunity to develop a new industry, an opportunity that became something of an imperative in 2015. Let me examine first the opportunity, then the imperative.

The opportunity involves solar energy, which is fast heading towards becoming the cheapest unsubsidised form of energy on the planet. Last year, solar power plants cheaper than gas plants were built in Dubai and Colorado.

A Saudi company, ACWA Power, built the one in Dubai. We can expect to see more such plants around the world in 2016, and many more beyond.

The main reason is the astonishing cost reduction of solar power. Since 2008, the average cost of a solar power plant, be it on the ground or on a roof, has fallen more than 80%.

Report: Saudi Arabia solar power exports ‘realistic’ says energy boss
Saudi Arabia: By 2035 we won’t depend on oil

Analysts have called this fall “the terrordome”, because it resembles a steep fairground ride on graphs, and because it would strike terror in the heart of any energy utility executive who seeks to resist change and stick to the old ways.

The cost of solar will continue to come down. Even in my cloudy homeland, where the sun rarely shines, solar energy will be cheaper than gas within three years or so.

Investors are increasingly realising that a transformation will unfold in energy markets in the years ahead.

In 2015, for example, the National Bank of Abu Dhabi produced a report concluding that the great majority of global power investment will be in renewables in the years ahead, with solar as a major player.

Another report by Deutsche Bank says solar is closing in on coal-fired power and that prices could fall a further 40% by 2020, creating $4 trillion of value in the next 20 years.

Report: Solar panel costs set to fall 10% a year

Hardly anybody saw this coming, even solar enthusiasts like me. The International Energy Agency, for example, got it horribly wrong.

They estimated the forward growth of the global solar energy market in 2000, 2002, 2005 and 2007. None of their projections exceeded 20 gigawatts by 2014. The reality was nearly 180 gigawatts.

Big energy utility companies have started to implement U-turns in their business models in the face of this.

In 2014 and 2015, E.ON, GdF Suez, Enel, and RWE all announced they would be focussing growth on solar, other renewables and energy services, and winding down use of conventional fuels.

The first oil and gas major has yet to join them, but Statoil has set up a renewable energy division, and Total has major investments in solar.

Solar: The biggest winner from Paris climate talks?

The first oil majors are moving in the same direction as the utilities because the revolution isn’t just about power, but transport. In February 2015, we learned that Apple intends to be mass-producing solar-charged electric vehicles within four years. In May, we saw

Tesla Motors morph into Tesla Energy, a manufacturer of batteries not just for cars but owners of buildings, and utilities. Within a week, it had taken $800 million of indicative orders for its batteries, 60% of them from industry.

I describe other amazing developments like this, in 2014 and 2015, in my book The Winning of The Carbon War, just published.

The opportunity is for Saudi Arabia, with its fuel resource (sun) and its capital from oil revenues, to become a major player in the new global solar industry: a hub in what is likely to become the biggest industry in the world, a few decades from now.

Stakes, scale, scope

Let me turn to the imperative. There are actually two of them.

The first is domestic consumption of oil for electric power generation. Few Saudi business people will need reminding of this problem, and the government is certainly well aware of it.

Too much oil is being subtracted from export potential by being burned for power. Solar, as senior government officials have themselves said, can do that job better, conserving future national income.

The second imperative is that the world community has just embarked on an orderly retreat from many uses of oil in the remaining decades of this century.

In December, I witnessed what I consider to be a unique milestone in human history at the Paris Climate Summit. A treaty was adopted there, the Paris Agreement, that holds huge transformative power.

There are three reasons for thinking this: stakes, scale, and scope.

There has clearly never been a gathering of world leaders to discuss stakes of the kind under discussion in Paris: a threat to global food and water supply, according to most participants, one that hangs over every nation on the planet.

What did COP21 achieve: decoding the Paris climate deal

Never in human history has there have been a summit to negotiate a treaty on such a scale: one that all nations have obligations under. 195 governments took part. That is every independent nation on the planet, as listed by some agencies.

These governments elected to set aside all the other many areas where they are in dispute to face down a shared global threat, finally, and with seriousness of intent. It was a display of global co-operation without precedent in history.

The scope of the treaty involves a total system change to the lifeblood of the global economy: decarbonisation of energy.

Governments wrote into their treaty the common understanding that they probably need to accomplish this incredible about-turn within the lifetimes of most schoolchildren and indeed college students alive today.

It must seem unbelievable, for people who haven’t been following the long-running climate negotiations. But it is true. And the Saudi government had the courage and wisdom to adopt this agreement along with the rest of the world.

Oil will not be departing the scene any time soon, or even within decades of now.

Even then, large amounts of oil will be needed for petrochemicals. But many oil uses will go, in the face of the global dynamics I describe above.

By then, the Kingdom needs to be the lead player not just in oil, but in solar and related industries.

Jeremy Leggett is an energy investor, entrepreneur and climate analyst. Follow him on twitter @JeremyLeggett

This article first appeared in Arabic in Saudi Arabia’s nation financial daily Al_Eqtissadaih, the day after the Saudi government announced a plan to set up a two trillion dollar investment fund for the post-oil era.

The post Solar and Saudi Arabia: Riyadh bows to the inevitable appeared first on Climate Home News.

(Pic: Hamza82/Flickr)

By Alex Pashley

Saudi Arabia, a kingdom predicated on oil production, is anticipating its end days by creating the world’s largest sovereign wealth fund from selling shares in its prized state oil company.

The top global petroleum exporter will launch an initial public offering of Saudi Aramco as soon as next year, second-in-line to the throne Mohammed bin Salman told Bloomberg in an interview on Friday.

“IPOing Aramco and transferring its share to [Public Investment Fund] will technically make investments the source of Saudi government revenue, not oil,” the prince said.

“What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”

Beyond oil: Petropower Saudi Arabia signals end of era 

The prince has an “obsession” about moving the Kingdom away from oil, said Bloomberg editor-in-chief John Micklethwait, who interviewed him for five hours.

“This fund… is an amazing thing. It’s enough to buy Google, Microsoft, Alphabet… and they’d still have change to spare. It’s a rather dramatic plan in terms of the economic transformation of the country,” he said.

Almost 80 years since the first Saudi oil was discovered, King Salman’s 30-year-old son is bidding to wean the kingdom off fossil fuels in the future.

Oil exporters are suffering from a collapse in prices, leaving dire shortfalls in government spending.

The planned sovereign wealth fund, estimated to be worth at least $2 trillion, would eclipse that of Norway and Abu Dhabi and be big enough to buy the world’s four largest publicly listed companies.

In January, the prime minister of the United Arab Emirates said he would “build an economy that is independent of oil and market fluctuations alike”, in a sign of a region in flux.

The post Saudi Arabia: By 2035 we won’t depend on oil appeared first on Climate Home News.

A highway in Riyadh (Flickr/Francisco Anzola)

By Megan Darby

The notion that state-owned Saudi Aramco could float on the stock exchange has set the business world alight.

It is the world’s largest oil producer, with ten times the reserves of US giant ExxonMobil. On that basis, it could be worth trillions of dollars.

What has it got to do with climate change? Well, it is the latest sign that Saudi Arabia is ready to overhaul its petro-powered economy.

Catalysed by slumping oil prices, a reform agenda is taking shape. “In terms of climate, there is a cautious optimism amongst reform-minded technocrats in the Kingdom,” says Glada Lahn, a Middle East analyst at Chatham House.

Yet she warns it could be derailed by heightened sectarian tensions in the region, triggered by Saudi Arabia’s execution of a Shiite cleric this week.

Report: Oil giant Saudi Aramco considers selling shares

Championing change is 30-year-old deputy crown prince Muhammad bin Salman, based on advice commissioned from McKinsey. The leading consultancy last month set out a blueprint for moving the Kingdom’s economy beyond its dependence on oil.

“The country can no longer rely on oil revenue and public spending for growth,” it concluded, “in the face of a changing global energy market.”

It proposed investing some US$4 trillion in other sectors like mining, finance and tourism by 2030. That could boost non-oil revenues from 10% to 70% of the government total.

This approach was foreshadowed in the country’s climate pledge submitted to the UN in November. Riyadh framed the document around economic diversification, with the avoidance of 130 million tonnes of CO2 equivalent emissions by 2030 a potential “co-benefit”.

Report: Saudi Arabia submits climate pledge to UN deal

Compared to other national contributions, it was an opaque plan, full of caveats. But by Saudi standards, Lahn says, it was “the most substantial commitment they have ever made to the international negotiations”.

The Kingdom could achieve double those carbon savings, largely by reining in wasteful use of energy, she estimates. “They have been quite conservative. That doesn’t mean to say that [target] won’t be revised up. A lot of it is about confidence-building.”

The latest budget on 28 December underlined the economic necessity of sharpening up efficiency. While it did put money aside in the boom years, on current trends Saudi Arabia will burn through its cash reserves by 2020.

A quarter of its spending goes on defence, with conflicts ongoing in Yemen and Syria. And following the Arab spring, it ramped up benefits in a bid to prevent unrest spreading.

Digging in for several years of cheap oil, officials targeted politically sensitive state handouts. They hiked the petrol price 50% to 24 cents a litre – still a fifth of the global average, but a sharp increase.

“We want to reach free energy markets,” Prince Muhammad told the Economist, implying a total phase-out of consumer subsidies.

Report: Saudi Arabia launches climate change PR drive

Market pricing would give Saudis more incentive to save energy at home – many don’t bother to turn the air con off when they go on holiday, given the negligible expense. In turn, they would win more credibility in claiming to be constructive players on the international climate scene.

The Kingdom went big on PR in Paris, where 195 countries struck a climate pact last month, insisting they were committed to a deal. Behind closed doors, observers say its negotiators fought to water down ambition.

Ultimately, the agreement targeted net zero emissions in the second half of this century. That means phasing out fossil fuel use almost entirely.

None of this means Saudi Arabia is quitting oil production any time soon. With a well-established infrastructure, it is competitive on cost and should be able to hold onto market share longer than most.

That would appear to be behind a repeated refusal to cut supplies in order to shore up the slumping oil price: Aramco hopes to drive competitors out of business.

“Clearly, they must be anticipating a sort of strategy where they are the last man standing in thirty years’ time,” says Anthony Hobley, CEO of think tank the Carbon Tracker Initiative.

Report: Saudi Arabia solar power exports ‘absolutely realistic’

But the reforms do show an eye to a future in which oil may no longer be the cash cow of recent decades.

Aramco is set to decide in the next few months whether to open up part of the business to outside investors. One option is solely to sell shares in the downstream (refining and retail) businesses.

Of more interest to analysts is the extraction side. A public listing would force the company to submit to audits and verify just how much oil it has. That is where the big money – and climate impact – lies.

The share sale is a chance to raise cash for more climate-friendly investments, Hobley adds, such as solar power in the sun-frazzled desert.

In an economy based on one commodity, all plans are provisional. Previous Saudi attempts at reform have fallen fallow at the first sign of an upturn in the oil market.

This time, there seems to be a serious intent to put things on a more stable footing. But between regional hostilities and austerity at home, it won’t be easy.

The post Beyond oil: Petropower Saudi Arabia signals end of era appeared first on Climate Home News.

Muhammad bin Salman is deputy crown prince of Saudi Arabia (Wikimedia Commons/Mazen AlDarrab)

By Megan Darby

Saudi Aramco, the world’s biggest oil producer, is thinking of floating on the stock exchange.

That was revealed by Muhammad bin Salman, Saudi Arabia’s deputy crown prince, in an interview with the Economist on Thursday.

“Personally I’m enthusiastic about this step,” he said. “I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco.”

A decision is to be made in the next few months on whether to start selling shares in the state-owned energy firm, as part of a Kingdom-wide privatisation drive.

The move would give investors and analysts an insight into a hitherto opaque fossil fuel giant. Aramco’s stated reserves are ten times the size of the largest private oil major, ExxonMobil.

Report: Saudi Arabia submits climate pledge to UN deal

In December, 195 countries agreed a climate change pact in Paris that signalled a phaseout of coal, oil and gas burning this century.

Coupled with oil prices falling below US$35 a barrel, that put further pressure on petropowers like Saudi Arabia to diversify their economies.

Prince Muhammad touted opportunities in mining, with 6% of the world’s uranium reserves, projecting non-oil revenues of US$100 billion in the next five years.

There are also moves to curb wasteful domestic energy consumption, which contributes to annual CO2 emissions of 17 tonnes a head, more than triple the world average.

In its recent budget, Saudi Arabia cut its generous energy subsidies, hiking the price of petrol by 50% to 24 cents a litre.

The Kingdom is targeting further reforms, Prince Muhammad told the Economist: “We want to reach free energy markets, but with subsidy programmes for those with low income, and not to have the subsidy in the form of lowering the energy prices, but through other programmes.”

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Khalid Abuleif, Saudi Arabia’s chief negotiator (Photo by IISD/ENB)

By Megan Darby in Paris 

Saudi Arabia’s chief negotiator defended his country’s contribution to a UN climate deal in Paris on Wednesday.

Labelled “inadequate” by analysts, the petropower’s national climate plan – one of 184 submitted – avoided committing to greenhouse gas emissions cuts. It proposed to diversify the economy, but – paradoxically – only if its coffers were not hit by declining oil sales.

At a side event of the COP21 summit, Khalid Abuleif said Riyadh chose to take an “action-based” rather than results-based approach.

“With an economy that is very much dependent on one resource, that is basically head-to-head with the objective of the [UN climate] convention, we really need to find a way to manage that resource,” he said. That was a reference to oil and gas, the source of about half the country’s wealth.

The picture was similar for five other Gulf states represented at the event, which sketched out areas for action but few measurable objectives.

Report: Saudi Arabia launches climate change PR drive

It was “extremely difficult” to predict the course of Saudi Arabia’s emissions over the next 15 years, Abuleif said. It depends on demand for hydrocarbons from the rest of the world.

The world’s biggest oil exporter outlined a number of potential ways to go green, without identifying concrete targets. Taken together, it said those measures could save 130 million tonnes of carbon dioxide equivalent a year by 2030, compared to a browner growth scenario. That is around a quarter of the country’s 2012 emissions.

“These ambitions are contingent on the Kingdom’s economy continuing to grow with… a robust contribution from oil export revenues,” the plan stated. And it depends on international climate policies not placing an “abnormal burden” on that economy.

Saudi Arabia is already suffering from a sharp fall in the global oil price since mid-2014. Without reference to climate, the International Monetary Fund this year advised the country to diversify its sources of income.

Report: India, China planned coal plants could blow UN warming target

A UN deal set to be finalised in Paris next week will only further curb demand for fossil fuels, which release climate-warming gases when burned. The aim is to limit average temperature rise to 2C above pre-industrial levels, beyond which scientists warn of increasingly severe disruption to weather patterns.

The G7 is calling for a complete decarbonisation of the world economy this century, to turn 2C into a more tangible target.

Abuleif rejected the term “decarbonisation,” saying other warming gases were also important. “You are making a mistake if you only focus on CO2.” But he was “open” to a differently worded long term goal.

Climate Action Tracker, a joint initiative of four European research institutions, said Saudi Arabia should quadruple its efforts in line with 2C.

“There is an extraordinary irony – and risk – in the Saudis delaying their plans to shift to renewables because of low oil prices, when their own oil production has driven those prices down,” said Bill Hare of Climate Analytics, a contributor to the report. “It may be far safer for Saudi Arabia to adopt a strategy that seizes the low carbon future and accelerate renewable deployment as fast as possible.”

The post COP21: Saudi Arabia defends target-free climate plan appeared first on Climate Home News.

By Alex Pashley

Saudi Arabia’s oil minister batted away criticism the Gulf kingdom was doing little to counter climate change on Monday.

“There are plenty of things being done,” Ali Al Naimi told Climate Home on the sidelines of the Paris summit.

“We are injecting CO2 in the ground. We are converting CO2 into polymers, so we are doing many things in that area.”

The world’s top crude exporter last month chaired a forum to scale up technology that buries carbon dioxide from industry in the ground and promised to cut carbon emissions in its climate plan if oil revenues remained strong.

But the Middle Eastern country has a reputation for undermining climate negotiations as it resists moves to phase out fossil fuels, upon which its economy depends.

The post Saudi Arabia is decarbonising, says oil minister appeared first on Climate Home News.

Ali Ibrahim Al-Naimi, Minister of Petroleum and Mineral Resources, Saudi Arabia (Pic: IISD/Flickr)

By Ed King

Saudi Arabia has launched a public relations drive to convince the world that the oil-rich state is committed to a global climate change deal in Paris this year.

Riyadh claims 16% of global crude oil reserves, second only to Venezuela, and is home to the planet’s fifth largest natural gas reserves.

The Gulf Kingdom has long been accused of underhand efforts to slow or block global climate talks, but appears keen to show journalists it’s on board with plans for a new UN pact.

A website launched for COP21 offers pictures of solar panels, a foreword from the country’s oil minister dated 2014 and a cheery ‘meet the team’ section.

One email from an account owned by state oil producer Saudi Aramco offers media a sense of “six things you need to know” about the Paris summit, known as COP21.

“The event is of significance to a wide range of audiences and seen as highly important,” it says, adding later “the consequences of climate change could be significant and lasting.”

Committed player

Another mailshot sent on Thursday quotes Saudi Aramco CEO Amin Nasser assuring the world that the government is “committed to playing its part”.

The kingdom’s strategy at the talks, he adds, will be to “maintain our position as the world’s largest, most reliable oil and gas producer”.

Liz Gallagher, head of climate diplomacy at the E3G think tank told Climate Home the Saudi awakening ahead of Paris is not unusual.

“Saudi Arabia has a tendency to increase their PR exposure ahead of COPs – over the past year they’ve made some positive and negative contributions to the climate talks,” she said.

“This recent example demonstrates they understand that the Paris moment and agreement will profoundly alter their economy.”

Saudi Arabia’s wall of shame
– December 2009: Negotiator Mohammad Al-Sabban is accused of undermining scientific evidence base for a UN deal in Copenhagen
– April 2013: Saudi Arabia calls for climate change to be omitted from the UN’s 2015 Sustainable Development Goals.
– April 2015: Negotiations to cut the use of HFCs, Saudi Arabia refuses to begin discussions: ‘We will never agree in one year, five years, or 100 years’ says Taha Zatari, head of delegation.
– May 2015: Ali Al-Naimi, the country’s oil minister, says idea of ending reliance on fossil fuels needs to be put ‘in the back of our heads for a while’
– In June 2015 country takes lead blocking reference to a UN report about the need to stabilise temperatures to below 1.5C

Earlier this week Saudi Arabia submitted its contribution to a UN climate deal, proposing “mitigation co-benefits” of up to 130 million tonnes of carbon dioxide equivalent a year by 2030

The plan, known in UN jargon as an INDC, was an historic step from the country, but was heavily criticised for being too vague and lacking any clear carbon emission reduction figures.

Riyadh says it will generate 23.9 gigawatts of renewable energy by 2020 and 54GW by 2032 through its Renewable Energy Programme (REP), launched in 2012.

But sceptics point to the country’s lack of climate change related laws and absolute economy-wide targets as further evidence its green energy drive is more spin than reality.

Plans for 40,000 megawatts (MW) of solar power by 2032 have been pushed back to 2040, and so far only 25MW of solar has been installed in the sun-drenched state, less than Germany.

Report: Gulf faces ‘intolerable’ heat on current emissions trends

In a sign of Saudi Arabia’s significance, the UN and France have invested heavily in diplomatic efforts to assuage its concerns over a deal.

A recent Saudi-French communique stressed the need for a long-term transition for all countries towards low GHG emitting development and the importance of avoiding warming above 2C.

And in an interview with the New Yorker UN climate chief Christiana Figueres said she understood why the country saw proposals for ‘decarbonisation’ in a Paris deal as a threat.

“The Saudis are sitting on a vast reserve of very cheap oil,” she said.

“Can you blame them for trying to protect that resource and that income for as long as they can? I don’t blame them. It’s very understandable.”

The post Saudi Arabia launches climate change PR drive appeared first on Climate Home News.

(Pic: Hamza82/Flickr)

By Alex Pashley

Saudi Arabia made its contribution to a climate rescue pact on Tuesday, calling it a “significant deviation” for the emissions of the oil-reliant economy.

The world’s largest crude oil producer pledged to achieve “mitigation co-benefits” of up to 130 million tons of carbon dioxide equivalent a year by 2030, in an opaque submission with numerous caveats.

It was the last G20 country to submit its offer to the UN, ahead of a meeting of those wealthy economies this weekend – and next month’s critical climate summit in Paris.

The 14th largest polluter emitted 527Mt in 2012, and didn’t give figures for forecasts of future emissions growth.

Plans to deploy renewable power and target energy efficiency depend on strong economic growth from oil revenues, it said, which make up 90% of GDP.

Analysis: What can OPEC bring to a Paris climate deal?

To lessen the dominance of its oil industry by growing its petrochemical and mining sectors among others, it would need financial assistance to compensate for slower economic growth.

“These measures focus on harnessing the mitigation potential in a way that prevents ‘lock in’ of high-GHG infrastructure,” the submission said.

The “intended nationally determined contribution” (INDC) to a UN deal sees a staunch climate laggard endorse efforts to limit climate change after months of speculation.

Over 150 countries covering 90% of greenhouse gas emissions have now contributed to a new global warming accord expected to be struck in Paris in December.

Report: Saudi Arabia’s failed oil gamble and the climate

Report: Saudi forum seeks to scale up carbon capture and storage

Saudi Arabia, which is weathering a collapse in global energy prices, highlighted its drive to diversify its economy.

Riyadh said it had “ambitious programs for renewable energy to increase its contribution to the energy mix,” such as solar and wind power. It declined to put any target in terms of installed capacity, however.

It also outlined unquantified targets for carbon capture and storage, gas production, and reductions in methane leaks and flaring.

The post Saudi Arabia submits climate pledge to UN deal appeared first on Climate Home News.

Al-Haram Mosque at the start of Hajj in 2008. Millions of Muslims who make the annual pilgrimage to Mecca in Saudi Arabia and spends hours outdoors praying, could be exposed to ‘intolerable’ heat stress by 2100 (Flickr/ Al Jazeera English)

By Alex Pashley

The Persian Gulf could be exposed to catastrophic temperatures by the end of the century if emissions of greenhouse gases follow current trends, US scientists said on Monday.

A mix of severe heat and humidity in the region would push temperatures past a “critical threshold” where the body overheats as sweat cannot evaporate, according to the study published in journal Nature.

Under such conditions, the cities of Doha and Dubai and parts of Saudi Arabia would become unbearable without air conditioning. The findings have particular implications for the two million Muslims who pray from sunrise to sunset at the Hajj ritual in Saudi Arabia.

The oil-rich countries in the region have tended to drag their feet on climate action, fearing the impact on their major source of revenue. Only two Gulf states have submitted carbon-cutting pledges to the UN, behind deadline.

These findings show it is in the governments’ interests to back greenhouse gas emissions cuts worldwide, the researchers argued.

“Countries in the region have an interest in supporting mitigation measures that would tend to basically help reduce the concentration of CO2 in the future,” said Elfatih Eltahir, a professor at the Massachusetts Institute of Technology.

Wet-bulb

A build-up of extreme conditions every few decades would cause “wet-bulb temperatures” to reach 35C over a period of six hours, they said. That’s equivalent to a temperature of 48C with 45% humidity, or 38C with 100% humidity.

Deadly heatwaves in Europe in 2003 which saw an estimated 15,000 premature deaths would seem like “refreshing” conditions in comparison,  co-author Jeremy Pal at Loyola Marymount University in California told a reporters’ briefing.

Countries which surround the Persian Gulf – Iran, Iraq, Saudi Arabia, Qatar, Bahrain, United Arab Emirates and Oman – are particularly affected by the clear-sky conditions and high humidity arising from the stretch of water.

At present, wet-bulb temperatures rise to a maximum 31C for just a few days a year, the scientists said.

The bouts of heat would hit productivity, stopping construction, fishing and support activity for oil and gas rigs in the Gulf.

That is under the assumption global warming follows the business-as-usual scenario outlined by the UN climate science panel, RCP 8.5, with temperatures rising an average of 4-6C from pre-industrial levels by 2100. Mitigation or RCP 4.5 projects warming of about 3C.

Carbon-cutting pledges submitted by over 150 countries towards a new global warming treaty would limit warming to 2.7-3.5C, according to more recent analyses.

Report: UN to quiz Saudi Arabia, Qatar over missing climate plans

Of the Gulf states, only Oman and the United Arab Emirates have so far provided domestic climate plans. OPEC nations including Saudi Arabia and Iran, the top carbon polluters yet to present a pledge, will deliver before the Paris summit, Reuters reported.

Oman offered a 2% cut in greenhouse gases below forecasts of emissions growth by 2030. The UAE did not set an emissions target at all, but said it would get a quarter of its energy needs from clean sources by 2021.

National pledges will form the basis of a UN climate deal to be finalised in Paris this December.

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Saudi Arabia made up over 1% of global greenhouse gas emissions in 2012, according to EU data (credit: pixabay)

By Alex Pashley

Saudi Arabia will come forward with a climate pledge before negotiators meet in Paris in six weeks’ time to strike a global pact.

That’s according to Laurence Tubiana, top climate ambassador for France, which hosts the critical summit.

Paris inked a communique with Riyadh this week, agreeing the deal should hold global warming to 2C above pre-industrial levels and “promote a transition” to “a model of development with low greenhouse gas emissions”.

“Will all [Gulf] countries do their INDCs? I’m sure, yes,” Tubiana told a London event organised by Climate Home, E3G and PwC on Thursday.

“Again I’m sure they will come before Paris. They [Saudi Arabia] just came with information recently.”

Hall of shame: Who hasn’t pledged yet to UN climate pact?

Of the 195 countries that need to agree in Paris, 146 submitted “intended nationally determined contributions” by the UN’s 1 October deadline.

Only two out of 13 member states of oil cartel OPEC were among them, with Saudi Arabia, Iran and Nigeria holding out.

The chief of OPEC told Climate Home last week oil exporters should only come forward if the situation was “win-win” and didn’t jeopardise poverty reduction.

Officials in the Middle Eastern kingdom are playing up its potential for solar power. But it depends on oil for 90% of export earnings, a source of wealth threatened by curbs on fossil fuel pollution.

The office of secretary-general Ban Ki-moon has said he will write to holdout governments to question why they haven’t pledged.

Report: Saudi Arabia solar power exports ‘absolutely realistic’

The France-Saudi joint statement published on Tuesday promised to promote a long-transition to a low carbon economy.

That should be done in a way that is “comprehensive, effective in terms of cost, diversified and resilient to the expected effects of climate change,” according to a translation of the document.

The post Saudis to deliver climate plan by Paris, says Tubiana appeared first on Climate Home News.

Janos Pasztor, climate advisor to UN head Ban Ki-moon (Pic: UN photos)

By Ed King

Countries which have not yet released climate plans ahead of December’s UN summit in Paris will be asked to explain why, by the office of secretary general Ban Ki-moon.

So far around 150 governments responsible for over 90% of global greenhouse gas emissions have submitted their ‘intended nationally determined contributions’ (INDCs).

That leaves over 40 laggards holding out, a group including Saudi Arabia, the United Arab Emirates, Qatar, Iran, Iraq, Pakistan and Egypt.

Hall of shame: Who hasn’t pledged yet to UN climate pact?

In a press conference at UN headquarters Janos Pasztor, Ban’s climate advisor, said his office had started to contact capitals that had not released an INDC.

“We will find out what is the problem and what it will take to fix,” he said.

“The secretary general’s office is not responsible to make sure [they are submitted] but we are trying to urge countries to finish the job as soon as possible.”

Report: OPEC chief defends members over missing climate pledges

UN agencies were already providing help to some governments in developing their proposals, he added.

UN officials are currently assessing those plans already available to work out how close the emission cuts will take the world to avoiding dangerous levels of warming.

Various assessments released in the past few weeks indicate the planet is still on course to blow past the 2C warming zone, beyond which more floods, droughts and extreme weather events are likely.

The post UN to quiz Saudi Arabia, Qatar over missing climate plans appeared first on Climate Home News.

(Pic: Hamza82/Flickr)

By Ed King

High public spending and falling oil prices threaten Saudi Arabia’s economic health, the International Monetary Fund (IMF) warned on Monday.

Publishing the results of a recent consultation with the Kingdom, the Washington-based lender said it should continue moves to diversify its economy away from oil revenues.

The country’s export revenues from January to May 2015 fell to $52 billion from $60 billion over the same period in 2014, draining government cash reserves.

“Directors noted that the sharp drop in oil revenues and continued expenditure growth would result in a very large fiscal deficit this year and over the medium term, eroding the fiscal buffers built up over the past decade,” said the IMF.

Analysis: Saudi Arabia’s failed oil gamble… and the climate

Oil prices have fallen from around $110 a barrel of oil in June 2014 to under $50 in August 2015, due in part to a Saudi strategy of keep taps running to drive competitors out of business, such as the US shale industry.

The Saudi banking sector could weather lower prices, the IMF said, but predicted GDP would slow to 2.8% in 2015 and 2.4% in 2016.

“The decline in oil prices has increased the importance of structural reforms to switch the focus of growth away from the public sector and toward the private sector,” it said.

The government would continue to “focus on reforms that aim to increase the employment of nationals in the private sector and diversify the economy away from its reliance on oil,” the report added.

Solar investments

Saudi Arabia holds the world’s second-largest oil reserves, and has fiercely guarded its right to produce hydrocarbons at ongoing UN talks to tackle climate change.

Earlier this year Saudi envoy Khalid Abuleif told RTCC oil and gas would be “part of the future global climate solution”, dismissing moves to secure a mid-century zero emissions goal.

Still, oil minister Ali al-Naimi says the country is planning significant solar energy investments in the medium term to meet domestic power requirements.

The country’s main renewable energy research centre said the Kingdom could get a third of its power, equivalent to more than 40,000 megawatts (MW), from solar power by 2032.

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