Saudi ‘call to action’ with carbon trading system to boost sustainability
Saudi Arabia plans to develop its own carbon trading mechanism as part of a move to develop a circular carbon economy by the time it hosts next year’s G20 summit next year.
The world’s biggest oil exporter is looking to achieve standards set under the United Nations Sustainable Development Goals and is looking to develop a system where carbon emissions are reduced, reused, recycled and removed to be used in other economically viable ventures to boost the economy, energy minister Prince Abdulaziz bin Salman told delegates at the third Future Investment Initiative in Riyadh.
The kingdom will develop a “closed loop system”, which will help to restore carbon balance and contribute to global economic growth in a sustainable manner, he added.
“Considering our pivotal role [as a global energy producer] it is our responsibility to find a solution through innovation and collaboration to create a sustainable framework of growth,” he said.
The prince said Saudi Arabia will soon reveal “a fair carbon trading system, learning from the European version, which didn’t work”.
As Saudi Arabia hosts the G20 next year, one of its main focuses will be on global energy access and a clean energy system that will be the backbone of the kingdom’s circular carbon economy concept, he said.
“Carbon is not the enemy ... with the circular carbon economy, carbon will be an opportunity,” he said. The initiative is Saudi Arabia’s “call to action”, Prince Abdulaziz added.
Saudi Arabia produces 10 million barrels per day of crude and has about 260 billion barrels of proven oil reserves. It is also among the top 10 gas producers globally with more than 900 billion cubic metres of proven gas reserves.
Despite advancements in the renewables and the progress made in reductions in emissions globally, Prince Abdulaziz said the world cannot achieve carbon balance through these two means alone. This is because much of the world’s energy is consumed in sectors that are difficult to decarbonise – heat, industrial processes and transportation.
However, the concept of reuse has been proven, he said. The kingdom, which traditionally flared associated gases in oil production, has been capturing them and using them in ways that have created jobs, fuelled power plants and contributed to GDP growth.
Saudi Arabia will reduce local energy consumption demand by as much as 2 million barrels of oil equivalent by 2030, Prince Abdulaziz said.
“I find this to be a progressive concept, very bold and the industry will appreciate such a proactive step being taken by a major oil-producing nation,” said Dr Sultan Al Jaber, UAE
Minister of State and group chief executive of Abu Dhabi National Oil Company. “Today they [Saudi Arabia] extended an open invitation through this new initiative to collaborate and co-operate with the kingdom to address this global challenge.”
Developing such a concept, he said, is not a luxury, but a necessity. “We must embrace the fact that our industry is being disrupted and instead of resisting it, we should embrace it and come up with real, true solutions centred around customers and true partnership models,” Dr Al Jaber added.