Saudi Arabia and its Contribution to Energy Transition

Under the patronage of HRH Prince Abdulaziz bin Salman Al-Saud the energy minister, the Kingdom of Saudi Arabia is hosting the 44^th conference of the International Association of Energy Economics, which is to be held in the Middle East region for the first time. The event is co-organized by the Saudi Association for Energy Economics (SAEE) and King Abdullah Petroleum Studies and Research Center (KAPSARC). The conference theme to discuss “Pathways to a Clean, Stable, and Sustainable Energy Future”, with energy experts, academicians, and policymakers from all over the world.

Riyadh hosting of this prestigious conference is in a testimony for the prominence of Saudi Arabia on the world stage in terms of economy, energy and environment fronts. The availability of spare production capacity which accounts to 1.5% of world demand for oil gave Saudi Arabia the position of “Global Oil Central Bank”. This role (in accordance with its national interests) is a costly but the kingdom has no-doubt lived up to this responsibility, as the market turbulences of the past decades testify for that.

It is worth noting that during the hosting of KSA to OPEC celebration of its 50th anniversary in 2010 (at the level of head of states), the organization made reference to its objectives including the creation of a special fund to invest in clean technologies. In addition, more recently and during its presidency of the G20, the kingdom launched the Circular Carbon Economy initiative (CCE), which was endorsed by all G20 countries with the aim to create a new way of approaching climate targets that utilizes energy technologies for carbon circularity and neutrality. This closed system involves 4Rs stages: reduce, reuse, recycle, and remove which would play a vital role in the process of energy transition that will be beneficial to the developed and developing countries, including Saudi Arabia.

Saudi Arabia has committed itself to attaining net zero emissions by 2060, where the Kingdom is leading in regional and global efforts to combat impacts of climate change through its Saudi green initiative and Middle East green initiative. These efforts could be achieved by many schemes such as the construction of the new city of NEOM to be 100% on renewables as the country would have 50% of its energy consumption from renewables. In addition, Saudi Aramco is planning to operate in 2027 the world’s largest carbon capture and storage facility, which aims to capture and store 44 million tons of CO₂ by 2035.

It is worth noting that, KSA historically has a good record in terms of paying attention to policies that encourage green energy and efficiency measures A proactive move is dated back to 1970s when Saudi Arabia invested billions of US dollars to eliminate gas flaring and succeeded since then in preventing 4 Gigatons of CO2 emissions (or 4 billion Cubic Meter a day) from being released in the environment. In addition, King Abdulaziz City for Science and Technology (KACST) has supervised since 1980 the solar village project in Al-Uyaynah which is an applied research project focusing on clean energy technologies.

Another example is the establishment of Saudi Energy Efficiency Center (SEEC) in 2010 which used to be a unit responsible for energy conservation under the KACST since the 1990s. This effort was complemented by the creation (in the same year) of King Abdullah City for Atomic and Renewable Energy (KACARE) which is responsible for suggesting a national policy for nuclear and renewable energy.

Riyadh selection as the host for IAEE 44^th conference is a recognition of the country’s position in global stage and a reflection of the growing importance of Saudi Arabia in contributing to the global energy transition efforts through its holistic approach and balanced policies towards the economy, energy and the environment.