< Previous30 ENERGY TRANSITION oilandgasmiddleeast.comSeptember 2023 with conventional diesel. However, costs associated with its use remain prohibitively high, and the difficulty in sourcing the quantities which would be required in shipping still needs to be solved. Given the lack of abundance of such used vegetable oils, much research is currently going into developing the right blend of biofuels with diesel, or other forms of traditional fuel, to assess whether a hybrid “less polluting” form of fuel can be derived, enabling vessels to reduce - rather than eliminate - their carbon footprint by burning a significantly less polluting form of hybrid-fuel. This alternative also raises the valid concern of inciting competition with food production, as the land and resources required to meet the quantity needed could well cause other environmental and social issues when it comes to available resourcing and drive an increase in food prices. Finally, while LNG is not a completely carbon-free alternative, it does not emit pollutants of the type that has raised global concern, is non-toxic, and contains far less carbon than other fossil fuels. Although the technology required to cool gas into liquid form is both very inaccessible to much of the developing world and also quite expensive, LNG remains one of the more ‘readily available’ and affordable alternatives than many of its counterparts but requires more than double the space of traditional fuels for storage. As LNG is already being used in other energy-intensive applications such as heating and power generation, transport, supply, and infrastructure is something already in place to a certain degree – which could offer the shipping industry a starting point at the very least if adoption were to be rolled out across fleets. In the case of most of these fuels, economic efficiency, when considering effective propulsion, remains a key consideration, as the success of these fuels depends largely on the ability to make them economically viable for market players. Thus, despite the sustainable advantages offered by these less carbon-intensive alternatives, no single alternative fuel currently ticks all the maritime sector’s boxes. A HOTSPOT FOR INNOVATION Fortunately, the Middle East is not letting today’s challenges prevent investment in tomorrow’s fuels. The UAE has set out plans to ensure low-carbon hydrogen plays a crucial role in its maritime future, organisations such as GAC are driving advancements in ammonia, biofuel, and other alternatives, and Qatar continues to place considerable resources behind LNG development. On a broader level, the Middle East region looks set to cement its position as a critical player in the green hydrogen market, with sizeable regional investments reported to amount to over $120 billion. Production costs are expected to dive over the coming years, and with high solar irradiation, plentiful space, and an ideal geographical location for export, the region seems ideally situated as a hub for the production of this future fuel. Incentives from governments are likely to be the way forward in encouraging this transitional phase into a more sustainable future, rather than focusing on penalising higher emission operations – success in similar schemes has been seen in rollouts around the globe of lower taxes for electric vehicles, for example. While it is important to remember that such activities will require continued significant investment and time to complete, nevertheless, there is considerable cause for optimism. In the interim phase, other less carbon polluting, or offsetting, steps can be taken, such as an increase in the uptake of LNG fuels, increasing installation of scrubbers onboard vessels that have the requisite space and budget to do so, and indeed increasing private sector investment into offsetting initiatives such as climate funds or carbon offset credits. THE FUTURE OF SHIPPING Despite the challenges, the maritime industry must overcome to achieve the wholesale adoption of alternative fuels, it is already taking practical steps to reduce its environmental impact. Clean fuels will ultimately remain the end goal, but during the transitional phase, the focus must be on fuels that are less polluting and on offsetting the pollution that is going to necessarily occur until greener fuels become a reality. The UAE recently introduced tighter regulations on the use of scrubbers – ensuring vessels using high-sulfur fuel oil are conforming to strict IMO mandates to remove harmful elements from exhaust gases; a strategic step in the right direction. Appropriately used scrubbers can play a substantial role in the transitional phase in lowering carbon dioxide transmission into the atmosphere. To succeed long-term, the industry must address realistic challenges and not become overly idealistic. It›s important to recognise that biofuels alone will not solve the emissions problem and that multiple solutions will be necessary. Since the Middle East is ideally placed to facilitate and accelerate our sector’s green transformation with the already robust backing from local governments, IME and its regional counterparts are in the perfect position to capitalise on fuel-related innovations and lead the global charge toward sustainable shipping. The waters ahead may be choppy but hope lies on the horizon. Securing a sustainable future for the maritime sector will be difficult but, ultimately, well worth the collective effort. Ali Fathi, Managing Partner, International Marine & Energy “Fortunately, the Middle East is not letting today’s challenges prevent investment in tomorrow’s fuels”The First Exclusive Community of Industry Players Join DMS Universe and Discover the Future of Industry Connections Today! Mohammed Loch CONTACT President & CEO - DMS GlobalEmail - mloch@dmsglobal.net UAE Cell & +971 50 3123510 +971 249 161 71 (UAE Of µ ce) +973 17 405 590 (Bahrain Of µ ce) CONNECT - INTERACT - COLLABORATE The First Eclusie Community of Industry Plaers32 INTERVIEW oilandgasmiddleeast.comSeptember 202333 INTERVIEW oilandgasmiddleeast.comSeptember 2023 How has the UAE progressed in terms of decarbonisation and energy transition over the years? The UAE has made significant progress in decarbonisation and energy transition over the years. By ratifying the Paris agreement in 2015, the UAE committed to a decarbonisation strategy to achieve reduced levels of greenhouse gas emissions and limit the rise in global temperatures to 1.5 degrees Celsius compared to pre-industrial levels. This aligns with the global target, and the UAE supports it as part of its net zero strategy by 2050. In alignment with this commitment, the UAE net zero strategy initiative was launched in 2021 making it the first country to do so in the MENA region. Among the major milestones of the UAE’s progress towards decarbonisation and energy transition is the deployment and use of clean energy in the country’s energy mix. This includes Al Dhafrah PV which will be the world’s largest single-site solar power plant once operational and will mitigate 2.4 million tonnes of carbon dioxide annually. In addition to The Barakah Nuclear Energy with its four reactors will supply up to 25% of the UAE’s electricity needs once fully operational preventing up to 22 million tons of carbon emissions every year. The UAE has also invested in Carbon Capture and Storage technology which is another strategy to decarbonise the power sector by capturing carbon dioxide from industrial emissions and storing it underground instead of releasing it into the atmosphere. The first facility of its kind is ADNOC’s Al-Reyadah CCUS facility with an 800,000 tonnes per year of CO2 capture capacity and is forecasted to have a CO2 capture capacity of approximately 5 million tonnes per year by 2030. In the journey towards the energy transition, the UAE has increased its energy efficiency by implementing several measures to reduce its energy consumption such as investing in energy-efficient buildings and appliances, promoting public transportation, and raising awareness about energy conservation. What is your role in sustainability and hydrogen strategy in the UAE? I envision the UAE as a top global producer of hydrogen energy and recognise the importance of clean fuel in achieving the country’s net zero target for 2050. In support of this goal, I SUSTAINABILITY EXPERT TALKS UAE’S FUTURE OF ENERGY An exclusive interview with Ali Alshimmari, Fellow Cohort 2.0 at UAE National Experts Program, Energy & Economy Sector34 INTERVIEW oilandgasmiddleeast.comSeptember 2023 In the context of the UAE’s journey towards net zero, what role does conventional energy play in maintaining momentum and transitioning to cleaner sources? As the UAE have set ambitious targets for its journey towards net zero, conventional energy (fossil fuel) can provide a reliable and affordable source of energy for ensuring that the UAE’s economy continues to grow while bridging the gap between current energy demand and the availability of clean energy. Conventional energy can be used to finance and build new clean energy projects, which can help to accelerate the transition to the targeted clean energy mix. Provide baseload power needed to maintain the UAE’s economy and infrastructure when the intermittent Renewable energy sources cannot always provide baseload power. ADNOC, a preeminent global energy player, has articulated a strategic trajectory to achieve net zero emissions by 2045. This comprehensive framework encompasses a 25% decline in greenhouse gas intensity by 2030, a methodical reduction in freshwater consumption, and an escalated emphasis on CCUS technologies. This commitment epitomises ADNOC’s vanguard role in championing sustainable practices, considerably augmenting the UAE’s overarching emission reduction pledges. Could you highlight the key initiatives and efforts undertaken by the UAE during the year of sustainability, and how do you envision these efforts impacting the nation’s sustainable future? The key initiatives of the UAE during the year of sustainability are aimed at advocating for responsible consumption and a circular economy. Among the initiatives are the sustainability guides that provide the public with advice to lead an environmentally conscious lifestyle through sustainable consumption and sustainable conservation. Through community activation and initiatives, the UAE’s commitment to a sustainable future can be achieved by preserving its natural resources and protecting its people. as increasing the share of clean energy to 50%, reducing carbon emissions from energy generation operations by 70%, and increasing energy efficiency by 40%. The National Hydrogen Strategy aims to make the UAE a leading producer and exporter of hydrogen by 2031. The strategy also targets a 50% clean energy contribution, including solar and nuclear. The Hydrogen Strategy supports this with a focus on green hydrogen production, using renewable energy sources, which doesn’t emit carbon when used. The UAE Energy Strategy and the National Hydrogen Strategy are both important steps toward the UAE’s goal of achieving net zero emissions by 2050. The UAE Energy Strategy will help to reduce the UAE’s reliance on fossil fuels by increasing the share of clean energy in the energy mix to 50%, which will reduce greenhouse gas emissions and help to mitigate climate change. The National Hydrogen Strategy will support the development of hydrogen-powered transportation and industry and help create a new clean energy industry in the UAE, by the creation of jobs, boosting economic growth, and diversification of the UAE’s economy. Both strategies will help to improve the UAE’s energy security by reducing the country’s dependence on imports of oil and gas, leading the UAE to be more resilient to shocks in the global energy market. How do you see the integration of renewable energy sources alongside conventional energy in the UAE’s energy transition, and what benefits does this hybrid approach offer in terms of achieving the net zero target? The integration of renewable energy with conventional energy will provide increased reliability and security of energy supply while maintaining a stable transition towards net zero. By integrating renewable energy with conventional energy, the overall emissions of the power sector can be reduced. Also, this hybrid approach can lower the costs of integrating renewable energy into the grid alongside conventional energy. have participated in the Ministry of Energy and Infrastructure’s Hydrogen Technical Committee, which developed the National Hydrogen Strategy and a roadmap for future hydrogen production and distribution. A decarbonised economy can use hydrogen in many ways: energy storage, load balancing, feedstock and fuel. This application is carried out in all sectors, including transport, industry, agriculture, and energy. Hydrogen could be a catalyst for economic-wide decarbonisation given its flexibility and capacity. Through the National Experts Program, I also conducted a study, “Hydrogen as a Futuristic Energy Source,” to capture the viewpoints of industrial players and regulatory authorities and develop a synchronised approach for the energy transition under the mentorship of H.E Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology. Can you elaborate on how the UAE Energy Strategy and the national hydrogen strategy contribute to the UAE’s goal of achieving net zero emissions by 2050? The updated energy strategy’s focus is on specific enablers such as policies and regulatory, technical, and technological tools to facilitate the transition in the power sector and achieve net zero by 2050. The strategy outlines the ambitions for 2050 to achieve climate neutrality through different quantifiable measures such Ali Alshimmari, Fellow Cohort 2.0 at UAE National Experts Program, Energy & Economy Sector “The UAE Energy Strategy and the National Hydrogen Strategy are both important steps toward the UAE’s goal of achieving net zero emissions by 2050”Decarbonising. Faster. Together. ADIPEC, the world’s largest energy exhibition and conference, brings together the ideas, ambition, technology and capital needed to accelerate the urgent, collective and responsible action that can decarbonise and future-proof our energy system. Under the Patronage of H.H. Sheikh Mohamed Bin Zayed Al Nahyan, President of the United Arab Emirates 2-5 October 2023 Abu Dhabi, UAE ADIPEC in Numbers 160,000 Energy professionals 15,000 Conference delegates 54 NOCs, IOCs, NECs and IECs 350 Conference sessions 30 Country pavilions Conferences 10 2,200 Exhibiting companies 1,600 Conference speakers Register as a visitorRegister as a delegatewww.adipec.com Strategic insights partner Host City Venue partner Official travel partner Official hotel partner Official local media partner Sport & recreation partner ADIPEC brought to you by Technical Conference organised by Knowledge partner Official English news partner Official broadcast partner International news partner Partners Supported by Platinum sponsorsGold sponsors36 OPINION oilandgasmiddleeast.comSeptember 2023 T o reach the target of net-zero emissions by 2050, countries across the globe must step up their climate change mitigation efforts. This entails investing heavily in decarbonisation technologies and fostering an ecosystem that supports their rapid adoption. Maturing these technologies and creating new innovations will be important in decarbonizing our societies. Indeed, while two-thirds of the required abatement in emissions is possible with proven technologies such as renewables, new advancements will be required to align with a 1.5°C pathway. Emerging technologies such as green steel, green cement, sustainable aviation fuel, direct air capture, low-carbon hydrogen, and long- duration energy storage will need to play a key role for the world to reach net zero emissions. If these emerging technologies are adopted at scale, they could enable approximately 22 gigatons per year in global emissions abatement and represent a cumulative global market size of $45 trillion to $60 trillion through 2050. Despite the plethora of opportunities, global investments in the climate technology sector continue to fall dreadfully short. The consequences of this underinvestment are clear: countless companies worldwide are left without the necessary means to decarbonise their operations and supply chains. In fact, at the current investment levels, achieving substantial climate technology innovation and emissions reduction will take a staggeringly long 20 to 30 years—an unavailable timeline CHARTING A GREENER PATH A closer look at the Middle East’s journey to climate tech innovation Author: Javier Doblas, Partner, Boston Consulting Group (BCG) given the urgency to combat the climate crisis by reaching net zero by 2050 or before. Recent models show that if $5 billion had been invested in solar energy in 1985, the solar industry would have scaled sooner and started displacing carbon-intensive power eight years earlier. The need for dramatic investment cannot be overstated. An annual expenditure of $3.5 trillion starting now is required on climate technologies to reduce emissions substantially and avoid the worst impacts of climate change. While pooling public and philanthropic funding is a vital step forward, we must also champion market-shaping mechanisms to promote and scale these innovative technologies. Market shaping refers to the strategy whereby companies, governments, and investors address market failures and steer the development of a market in a more positive direction. By coordinating their efforts in the climate technology sector, key stakeholders can resolve bottlenecks, distribute risk, and utilise their purchasing power to support a greener future for the Middle East and beyond. LEVERAGING PRIVATE CAPITAL FOR CLIMATE ACTION With a global equity market cap of $120 trillion and an additional $120 trillion in the global fixed-income market, there is an astounding amount of capital that can be redirected toward fostering the green revolution. Such an investment can accelerate the development of novel technologies, bolster existing solutions, and improve 37 OPINION oilandgasmiddleeast.comSeptember 202338 OPINION oilandgasmiddleeast.comSeptember 2023 adaptation and resilience efforts for billions of people in the region. For instance, a leading GCC national oil company has partnered with a global industrial gas company and a major oilfield services company to establish a Carbon Capture and Storage (CCS) hub with the potential to safely store up to 9 million tons of carbon dioxide a year by 2027. This partnership, bringing firms with complementary capabilities together, will support the development of CCS and help mitigate industrial emissions in the industrial zone where it is located. THE INFLUENCE OF MARKET-SHAPING MECHANISMS The power of market-shaping mechanisms is undisputed. A decade ago, a $1.5 billion investment made by governments and philanthropists into GAVI, the Vaccine Alliance, expedited the development and production of life-saving pneumococcal vaccines by at least five years, ultimately saving over 500,000 lives . Applying this same level of urgency and investment to climate change could help the Middle East mitigate its unique environmental challenges and contribute to the global pursuit of a sustainable future. Oman’s green hydrogen program provides an interesting example of a market-shaping mechanism. The Sultanate is running an innovative auction program to award large- scale green hydrogen projects to meet its ambitious production targets. Oman’s well-structured and transparent auction process is bringing together all the relevant stakeholders across the hydrogen value chain (including government, developers, OEMs, financiers, offtakers, and infrastructure providers) to fast-track the development of this critical clean technology. However, market-shaping activities are most effective when all participants involved share a stake in the outcome and overcome limitations on individual action. Climate technology producers face uncertainties regarding potential demand and willingness to pay for their products, while buyers may be hesitant to make long-term commitments. Thus, market- shaping mechanisms serve as the driving force that creates collective incentives through the climate technology value chain—minimising risks and promoting economies of scale. Moving forward, strategic investments and market-shaping activities across the Middle East are essential to expedite the development and implementation of vital climate technologies. This will help bridge the “valley of death” that often impedes the transition from a promising concept to a feasible and cost- effective product. The Middle East’s potential to be a catalyst for change in the fight against climate change is immeasurable. By leveraging the region’s wealth and resources, we can empower the next generation of climate technologies and transform the way we preserve our environment, not just for today, but for generations to come. Javier Doblas, Partner, Boston Consulting Group (BCG) An annual expenditure of $3.5 trillion is required on climate technologies to avoid the worst impacts of climate changeC M Y CM MY CY CMY K WaterWeek2023_205x2575_AD_OUTLINE.pdf 1 28/08/2023 10:26Next >