By Cinzia Bianco*
Floods in Italy, landslides in Pakistan; ice storms in Texas, wildfires in Canada. The local weather devastation of 2023 is a reminder, as if one other had been wanted, that point is operating out to handle world warming. But, the March 2023 report from the United Nations Intergovernmental Panel on Local weather Change signifies that present emissions discount pathways and applied sciences stay inadequate to restrict that warming to under 2°C in comparison with pre-industrial ranges. As an alternative, it warns of extra weather-related disasters to return and the catastrophic degradation of the worldwide ecosystem.
Russia’s all-out invasion of Ukraine in February 2022 exacerbated this lack of progress. To satisfy shortfalls of Russian fossil fuels, Europeans have turned in the direction of nations within the Center East and North Africa. However this comes with apparent difficulties, not least the continued use of fossil fuels in mild of the local weather disaster. Europeans are already in a weakgeopolitical place vis-à-vis their companions within the area. This might deteriorate additional if their standing as vitality demandeurs takes root, thereby diminishing their leverage on points equivalent to human rights. Europeans are additionally cautious of merely changing a problematic and geopolitically dangerous dependency on Russia with problematic and geopolitically dangerous dependencies on different nations on the planet.
It’s due to this fact essential for Europeans to develop a brand new method to vitality relations with the Center East and North Africa that doesn’t entrench their dependence on states within the area. This method ought to reinforce shared pursuits of peace, stability, and prosperity inside a sustainable, long-term, and diversified technique. It must serve Europeans’ vitality safety objectives, but additionally its local weather objectives, and may preserve a robust give attention to accelerating the transfer past fossil fuels. This could happen not solely by the event of inexperienced vitality relations, but additionally – extra broadly – by the implementation of business decarbonisation and a complete inexperienced transition in each areas.
The Gulf Cooperation Council (GCC) monarchies symbolize a superb check case for such an method. The monarchies – particularly Qatar – have develop into protagonists in European efforts to diversify away from Russian vitality. And if Europeans need to obtain their home and worldwide local weather objectives, they should interact with the GCC states, that are dwelling to nearly one-third of the world’s confirmed crude oil reserves and round one-fifth of its pure gasoline reserves. Home CO2 emissions in GCC states account for simply 2.4 per cent of the worldwide whole, however the export of giant portions of fossil fuels means these nations additionally export big volumes of CO2 emissions.
But, the GCC states additionally harbour inexperienced ambitions. They’ve the monetary sources to make the substantial investments required to allow the vitality transition, in addition to an abundance of technical experience within the vitality trade and entry to the most cost-effective photo voltaic vitality on the planet.
The monarchies have additionally lately intensified their efforts to handle local weather and environmental challenges. Their societies – particularly younger individuals – have gotten extra vocal about points equivalent to air high quality.
GCC leaders have famous the alternatives linked to the vitality transition – together with the financial advantages of effectivity, electrification, renewables, and the round carbon financial system – and the political worth of embracing local weather diplomacy. Later this yr the United Arab Emirates (UAE) will host the United Nations local weather convention (COP28), whereas the UN’s regional Local weather Week for the Center East and North Africa will happen in Saudi Arabia.
Furthermore, Europeans must be companions of selection for the Gulf monarchies. That is because of the aggressive fringe of Europe’s know-how across the vitality transition, but additionally present industrial and technological ties between the areas and geographic proximity. Some European actors have sought to discover these complementary vitality pursuits by elevated engagement with the GCC over the previous yr. However the actuality past the media hype is that the European method has been scattered and short-sighted. The European Union has not devoted sufficient vitality to advancing a coordinated coverage; essentially the most formidable initiatives from member states, which centre across the vitality transition, nonetheless face a number of technical, market, and political obstacles.
This coverage transient examines a few of these obstacles by analysing present and potential vitality cooperation between EU and GCC states within the context of the run-up to COP28. It additionally highlights the alternatives for the EU in a brand new method to local weather relations with the GCC states, particularly relating to its local weather objectives and vitality safety imperatives. Lastly, the paper units out how Europeans can construct partnerships with the Gulf monarchies that might additionally function a launching pad for efforts in industrial decarbonisation and the vitality transition farther afield. It focuses on 4 promising domains of cooperation between Europeans and the Gulf monarchies: vitality effectivity and electrification, hydrogen, and the round carbon financial system.
Welcome to the way forward for Europe-Gulf state vitality relations
In addition to being high oil and gasoline producers, the Gulf monarchies are potential sources of inexperienced vitality for the EU and certain frontrunners within the world vitality transition. But, as I set out in a paper for ECFR in 2021, the EU initially underwhelmed in its engagement with these states as a part of the European Inexperienced Deal. GCC capitals, in flip, had been broadly hostile to a coverage that they seen as revolving round carbon taxation and threatening their financial survival, by specializing in a speedy phase-out of fossil fuels.
However Russia’s all-out invasion of Ukraine modified the dynamics of vitality geopolitics. The pressures of an imminent vitality safety disaster pressured Europeans to develop into extra attuned to GCC arguments that the vitality transition ought to happen with out main socio-economic instability. On the identical time, whereas the GCC states intensified vitality cooperation with Russia following the invasion, in addition they began to see extra clearly that strategic vitality relations with the EU introduced alternatives – since it will be the one main market in a position and keen to soak up significant portions of inexperienced vitality within the quick time period. Commerce with the EU within the vitality sector additionally serves the aim of lowering GCC dependence on the Chinese language market, which Russia has aggressively focused.
Unsurprisingly, vitality engagement between EU member states and the Gulf monarchies has intensified since February 2022. ECFR’s Vitality Offers Tracker discovered that Austria, France, Germany, Greece, Hungary, Italy, the Netherlands, and Poland have signed offers with Bahrain, Oman, Qatar, Saudi Arabia, and the UAE. Most of those agreements are quick time period and easily give attention to diversifying provides of fossil fuels to Europe. However a few of them stand out for his or her ambition and their efforts to mix key EU member states’ short-term vitality safety with long-term objectives linked to the inexperienced transition and decarbonisation.
In September 2022, the German chancellor, Olaf Scholz, visited Qatar, the UAE, and Saudi Arabia. Two months later, Berlin signed a 15-year deal to purchase 2m tonnes of liquefied pure gasoline (LNG) from Qatar, with deliveries ranging from 2026. That very same yr, Qatar and Germany signed an vitality partnership with working teams on hydrogen, LNG, and vitality effectivity. Berlin and Abu Dhabi have had an vitality partnership since 2017. To construct on that, they signed the Vitality Safety and Business Accelerator Settlement that goals to, as Scholz putit, “allow the speedy implementation of lighthouse initiatives [small-scale but big-picture initiatives] within the precedence areas of renewable vitality, hydrogen, LNG and local weather safety”. Germany’s largest energy firm RWE, signed an preliminary settlement with Abu Dhabi Nationwide Oil Firm (ADNOC) for a supply of 137,000 cubic metres of LNG. However one other deal adopted for, initially, “blue hydrogen” – hydrogen produced utilizing pure gasoline and storing carbon emissions – and its by-product “blue ammonia”. This deal contains an purpose of shortly changing this with the cleaner “inexperienced hydrogen”. In Saudi Arabia, the German international workplace has opened a Riyadh-based hydrogen diplomacy workplace. Its purpose is to implement a 2021 memorandum of understanding that foresaw Germany offering electrolysis techniques for the manufacturing of hydrogen on the Saudi flagship hydrogen challenge, NEOM Inexperienced Hydrogen Firm, in change for inexperienced hydrogen exports to Germany. Lastly, throughout the historic first go to of Sultan Haitham bin Tariq to Berlin in the summertime of 2022, Germany signed a declaration of intent with Oman for nearer cooperation in inexperienced hydrogen and its derivatives; good grids and vitality effectivity in trade, buildings, and transport; and regulatory frameworks.
France has additionally been energetic. In July 2022, the UAE and France inked a complete strategic vitality partnership, bolstered by a 2023 UAE-France-India tripartite cooperation initiative centered on the vitality transition. Furthermore, Paris signed a memorandum of understanding with Riyadh to work collectively on nuclear vitality; hydrogen; electrical energy interconnection; vitality effectivity, storage, and good grids; and oil and gasoline and their derivatives. The final of those focuses particularly on carbon seize, utilisation, and storage (CCUS) applied sciences, which seize carbon emissions at supply to sequester them underground or to rework and use them as different marketable merchandise. The memorandum additionally promotes cooperation on cross-cutting points such because the localisation of supplies, merchandise, and companies within the vitality provide chain, and joint scientific analysis and coaching.
Italy has emerged because the third energetic member state. Alongside LNG cooperation, Italian vitality multinational Eni signed a memorandum of understanding with Saudi Arabia’s minister of funding in September 2022 that covers sustainable mobility, the round financial system, and the chemical trade. The Italian authorities promoted the primary pre-COP28 occasion in Abu Dhabi, which adopted a declaration of intent between the 2 governments to reinforce cooperation within the COP28 framework. The intention is to construct upon longstanding connections between Eni and ADNOC by growing efforts within the areas of renewable vitality, blue and inexperienced hydrogen, vitality effectivity, carbon seize and storage (CCS), greenhouse gasoline discount, methane gasoline emissions, and routine gasoline flaring. Eni is principally concerned in enhanced oil restoration and gasoline extraction within the multi-billion-dollar Ghasha pure gasoline area, and has signed a memorandum of understanding with the state-owned Mubadala Petroleum to work on joint vitality transition initiatives within the Center East and North Africa, south-east Asia, and Europe. A 2021 memorandum of understanding between Italian agency Snam and Mubadala had agreed to evaluate the feasibility of piping inexperienced hydrogen to Europe.
Offers equivalent to these have substantial potential to advance the vitality transition within the GCC states. Nevertheless, to maneuver from paper to follow, the perimeters should confront and overcome some key obstacles together with: the resilience and sustainability of the inexperienced provide chain; the event of obligatory infrastructure; technological and scientific issues associated to inexperienced vitality manufacturing; and challenges linked to market improvement and financing. The later sections of this paper cowl how they will start to take action.
But, the best barrier to realising the potential of vitality relations between European and GCC states just isn’t technical, however political. This turns into most obvious on the EU stage. Within the months after the publication of my 2021 analysis, and in keeping with the paper’s suggestions, the EU elaborated a roadmap for its vitality relations world wide to accompany the transition from fossil fuels to inexperienced vitality. Importantly, this “REPowerEU” decarbonisation technique clearly signifies the dimensions of the chance for exporters such because the GCC states. The EU’s Exterior Motion Service additionally included vitality as a website of its proposal in Might 2022 for “A strategic partnership with the Gulf”, which the Council of the European Union strongly endorsed in June that yr. Within the framework of COP28, some EU-UAE engagement has taken place on the stage of conferences between senior officers. And European Fee vice-president Frans Timmermans, who leads on the European Inexperienced Deal, and Kadri Simson, the vitality commissioner, took much-anticipated journeys to the UAE in January 2023 and Saudi Arabia in March 2023.
Nevertheless, the EU seems to be actively de-prioritising the Gulf monarchies relating to the vitality transition. The REPowerEU doc solely mentions the GCC explicitly in a single sentence. The EU-GCC Clear Vitality Know-how Community, which introduced collectively stakeholders and consultants from the 2 areas to foster clear vitality partnerships, reached the tip of its mandate in June 2022; its alternative – the EU-GCC Cooperation on the Inexperienced Transition and De-Carbonisation – has not but come to fruition, leaving a most premature vacuum. NEOM is likely one of the few totally financed hydrogen initiatives within the Center East and North Africa, and a uncommon sensible supply for the EU to fulfil its formidable goal of importing 10m tonnes of inexperienced hydrogen by 2030. However a hydrogen partnership between the EU and Saudi Arabia stays embryonic, whereas the EU’s directorate-general for vitality has signedhydrogen partnerships with nations which can be far behind Saudi Arabia’s manufacturing schedule with NEOM. It’s unclear whether or not the EU has even begun conversations about hydrogen with Oman and the UAE, that are two different promising producers.
On the core of the EU’s reluctance appears to be uncertainty about tips on how to take care of entrenched views – on all sides – over tips on how to undertake the inexperienced transition. COP28 will due to this fact be a vital catalyst to discover alternatives to bridge a few of these gaps. As such, Europeans ought to be sure that they arrive in Dubai with a transparent consciousness of their host’s priorities.
Horizon COP28: What Europeans ought to know
Local weather change has a important affect on GCC nations, however hydrocarbon revenues contribute between 60 per cent (UAE) and 90 per cent (Kuwait and Qatar) of presidency budgets. GCC governments beforehand seen local weather insurance policies as an even bigger menace than local weather change, as these insurance policies posed a direct menace to their financial wellbeing. On this sense, they traditionally aligned with different rising economies – equivalent to China, their indispensable shopper in worldwide negotiations. Furthermore, GCC nations have lengthy centered on adaptation reasonably than mitigation in relation to local weather change, since their high-income standing permits them to put money into high-tech resilience.
Nevertheless, local weather change is slowly turning into extra related for policymakers within the area. All GCC states besides Qatar have now launched net-zero targets. As mentioned, GCC governments additionally more and more see inexperienced vitality as an financial alternative. In accordance with a report from the Worldwide Renewable Vitality Company, a rise in the usage of renewable vitality within the GCC area of 80GW by 2030 would enable the monarchies to preserve about 11 trillion litres of water, in addition to 400m barrels of oil, per yr. This might additionally create greater than 200,000 jobs.
The inexperienced transition might be a given within the area, however the GCC states need that transition to be gradual and gradual. They might first scale up their renewable vitality capability to deploy it domestically, releasing up extra fossil fuels for export. (All of the GCC nations are presently investing in additional fossil gasoline manufacturing capability.) Later, they might diversify their exports by including inexperienced vitality. This might enable them to protect their political-economic techniques primarily based on the redistribution of externally derived rents a bit of longer, guarding in opposition to potential financial and political instability. That is the basic context to the inexperienced transition considering within the UAE and different Gulf monarchies.
Like its predecessor in Egypt, COP28 is thus unlikely to end in commitments to part out fossil gasoline manufacturing. The UAE is designing COP28 across the method of accelerating the vitality transition with out fossil gasoline producers having to compromise their hydrocarbons-funded financial progress. This considering very a lot displays the contradictions of getting a significant fossil gasoline producer host the convention – and selecting because the president of that convention Sultan al-Jaber, who runs ADNOC in addition to Masdar, one of many nation’s largest and most energetic renewable vitality funding funds. This level has been the supply of a lot controversy over the UAE presidency in Europe and america, and can complicate the signing of an settlement on the assembly.
The UAE and different fossil gasoline producers noticed the scramble for vitality safety after the Russian invasion of Ukraine as a possibility to argue, as Jaber has, that fossil fuels are nonetheless obligatory: “[we] can’t unplug the present vitality system earlier than we’ve got constructed the brand new one,” he stated at India Vitality Week in February 2023. At this yr’s CERAWeek vitality convention, Jaber added, “Let’s scale up greatest practices and purpose to achieve net-zero methane emissions by 2030. We should electrify operations, equip services with carbon seize and storage, and use all out there applied sciences to extend effectivity throughout the board.” He additionally advocates investing in solely the least carbon-intensive oil barrels which, by the way, are to be discovered within the GCC.
Certainly, with a few of the lowest carbon footprints and manufacturing costsfor oil on the planet, the Gulf monarchies would possibly even improve their market shares within the medium time period; they may be topic to as much as 50 per cent much less in EU carbon tariffs than most opponents, making them the final males standing in fossil fuels. ADNOC and the Saudi Arabian Oil Group (ARAMCO) each plan to have expanded their oil manufacturing by 2027, by when Qatar additionally goals to have elevated its gasoline manufacturing by 64 per cent. Doha considers gasoline the transition gasoline par excellence.
The UAE will direct COP28 to maneuver from preventing the hydrocarbons trade to working with it to advertise technological options to restrict emissions, equivalent to CCUS. The UAE already deploys CCS applied sciences at a business scale, partially because of strategic cooperation with European vitality trade operators. However the share of CO2 the GCC states seize remains to be critically inadequate. As of August 2022, there have been solely three giant and energetic carbon seize crops within the GCC area, capturing 3.7m tonnes a yr of CO2 – which is 10 per cent of worldwide seize capability: Uthmaniyah in Saudi Arabia, Al-Reyadah within the UAE, Ras Laffan in Qatar.
The UAE may even use COP28 as a platform to spice up investments in inexperienced vitality manufacturing globally as it really works to develop into a key actor on this area. The UAE already has the world’s most cost-effective photo voltaic vitality manufacturing system and the Center East and North Africa’s highest share of renewable vitality in its combine, with 3.058 megawatts of capability. Accelerating inexperienced vitality industrial improvement is central to the UAE’s Web Zero by 2050 technique, and the nation has to this point invested over $16.8 billion in 70 inexperienced vitality initiatives worldwide.
But, neither the UAE nor every other GCC nation, regardless of some sizable pledges and large-scale initiatives, are but on observe to fulfill their self-declared inexperienced vitality targets. Saudi Arabia, the UAE, and Oman purpose to generate between 20 per cent and 50 per cent of their home vitality wants from renewable sources by 2030, and have important ambitions to provide and export inexperienced hydrogen. This might require nearly 40-60GW of renewable vitality capability by 2030, in comparison with a present put in capability of round 4,000MW. Qatar, Kuwait, and Bahrain would not have comparable or noteworthy renewable vitality targets.
Lastly, the UAE is setting excessive expectations on progress over local weather finance at COP28. Jaber has criticised the supply and affordability of this finance, advocating a rise from “billions into trillions” in such a method that will not exacerbate the debt disaster in poorer nations. He has additionally argued for improved accessibility to local weather finance by eradicating some bureaucratic obstacles that hinder entry to funds. Abu Dhabi has pledged to finish negotiations at COP28 on the compensation fund for local weather change-related loss and injury in creating nations, agreed after some discord at COP27.
Certainly, there’s a world scarcity of devoted local weather finance frameworks, together with within the GCC monarchies. Some promising preliminary initiatives embody the 2021 Sustainable Finance Framework within the UAE, which has pushed dozens of monetary establishments to lend and put money into environmentally sound actions; a 2019 scheme from Oman’s Financial institution Muscat to encourage renewable vitality set up; and Saudi Arabia’s 2022 Inexperienced Finance Framework by its Public Funding Fund – the nation’s sovereign wealth fund – which has launched two tranches of inexperienced bonds geared toward supporting the native inexperienced agenda. The EU, for its half, has a diversified portfolio of local weather finance devices and frameworks (such because the European Hydrogen Financial institution and several other environmental, social, and governance funding fashions) which might function inspiration for the UAE’s objectives on local weather finance at COP28.
In actual fact, the EU might even encourage the GCC states to see its forthcoming carbon border adjustment mechanism (CBAM) as a monetary product and – as with its emissions buying and selling system (ETS) – a brand new supply of local weather financing. Europeans might focus on this with their GCC counterparts at COP28 whereas providing technical help to attract up a carbon-pricing framework, which is presently absent within the GCC. Given the comparatively low-carbon content material of GCC trade, detailed carbon pricing might be extra handy than normal emissions metrics and improve acceptance of the CBAM within the area.
Make it occur: Pathways to decarbonisation
All of this means that there’ll seemingly proceed to be important divergences within the events’ views at COP28. Nevertheless, there’s additionally a considerable convergence of pursuits in a number of domains that might advance the inexperienced transition. The simplest method to tackle this problem is to look past the ideological divide and give attention to technical limitations to progress within the following areas: vitality effectivity and electrification, the round carbon financial system, and hydrogen.
Vitality effectivity and electrification
Vitality effectivity and electrification have been a part of GCC policymakers’ discourse for many years. Per capita vitality consumption charges within the GCC are among the many highest on the planet, exacerbated by financial progress primarily based on energy-intensive industries, a improvement and development increase, and rising populations. GCC nations rating low on vitality effectivity, each in absolute phrases and in comparison with different oil producers and high-income nations; they fare higher on electrification. Over the previous ten years, GCC policymakers have startedpushing extra vigorously to enhance each, together with in cooperation with the EU, which they recognise as having important experience to share on each subjects.
Vitality effectivity and electrification, alongside the event of renewable vitality sources and emissions discount, have been on the core of a number of EU-GCC initiatives. These embody: the 2010 joint motion programme for the implementation of the GCC-EU Cooperation Settlement; a coverage doc protecting 2010-2012 adopted by scientific diplomacy challenge INCONET-GCC from 2014-2017; and the EU-GCC Clear Vitality Know-how Community, which ended final yr. These frameworks inspired and facilitated the participation of Europe’s non-public sector in vitality transition initiatives throughout the GCC, together with in electrical energy interconnections – the core infrastructure that permits effectivity and electrification.
European and GCC producers, transmission system operators, and distributors want new frameworks for dialogue on interconnections. This wants particularly to handle the prospect of linking the GCC-wide transmission grid to, for instance, its European counterpart ENTSO-E. Plans for such an interconnection have gained momentum since a 2021 deal between Egypt and Saudi Arabia to hyperlink their grids, and one other signed in 2023 between the GCC and Swiss firm, Hitachi Vitality, to spice up the present change capability of the GCC grid by upgrading the Al-Fadhili high-voltage direct present converter station. The latter is a obligatory preliminary step to additional extending connectivity in the direction of the Mediterranean.
Alongside adjustments in client behaviour, electrification is prime to enhancing vitality effectivity in high-emissions sectors equivalent to development, transport, and cooling (air con and refrigeration, for instance). The UAE, Qatar, Kuwait, and Saudi Arabia are beginning to put in place pointers for the development trade on constructing codes, insulation, and glazing; effectivity standards are sometimes included in city improvement planning. However there’s nonetheless appreciable scope for enchancment. EU directives symbolize the very best requirements on this sense. The EU has beforehand organised a webinar to interact its GCC counterparts on vitality effectivity in development and concrete improvement. This introduced collectively policymakers and representatives from the non-public sector – together with industrial and constructing operators, architects, engineers, and good know-how suppliers – to debate options in “inexperienced buildings”, a core theme of the European Inexperienced Deal. EU leaders ought to be sure that that was not a one-off train.
A key sub-theme within the inexperienced buildings area is cooling. In most GCC cities, cooling can account for as much as 60 per cent of native vitality consumption. Over the previous few years, GCC nations have increasedtheir use of “district cooling”, which improves effectivity by consolidating provides of chilly air to distribute throughout densely populated areas. However governments must do extra to encourage this by particular regulatory frameworks and concrete planning. On the identical time, GCC markets are nonetheless overflowing with low cost and energy-inefficient air con models. The race is now on to change mounted air con models with extra environment friendly inverter models, which eat 40 to 50 per cent much less vitality.
The GCC states might now encourage the alternative of different low cost and energy-inefficient “Made in China” home equipment, which have flooded the native markets. Vitality subsidies have for many years been on the core of the government-society ruling contract within the monarchies. It will due to this fact be simpler for them politically to advertise extra environment friendly different items than attempt to affect client behaviour by lowering subsidies. On the identical time, reducing subsidies and elevating tariffs – each for water and for electrical energy – are instruments that some GCC governments have steadily launched, and appear obligatory given the quantity of wasted vitality within the area.
The round carbon financial system and decarbonisation
Gulf states have lengthy handled CCUS as a silver bullet answer. The EU cautions in opposition to the GCC nations’ overreliance on know-how, and continues to emphasize the necessity for behavioural change. Nevertheless, the European Inexperienced Deal additionally recognises CCUS as a key instrument to help decarbonisation.
Saudi Arabia centred its 2020 presidency of the G20 round CCUS and different measures to create a “round carbon financial system ” primarily based on the discount, reuse, recycling, and removing of CO2. Over the previous 12 months, Saudi Arabia has pledged to solely construct energy era crops that incorporate carbon seize know-how and to work by its Center East Inexperienced Initiative to chop emissions by 60 per cent by 2030 – by when the nation goals to be capturing 44m tonnes of CO2 a yr. ARAMCO is presently constructing a brand new plant in Jubail with the capability to seize 9m tonnes each year by 2027. Qatar and the UAE goal, respectively, a complete capability of 7m tonnes each year and 5m tonnes each year by the identical yr.
Nevertheless, as mentioned, the share of CO2 captured within the GCC nations remains to be critically inadequate. The GCC’s three carbon seize and storage services in Saudi Arabia, Qatar, and the UAE sequester simply 3.7m tonnes each year. The three different GCC fossil gasoline producers – Oman, Bahrain, and Kuwait – lag even farther behind. Within the Worldwide Vitality Company’s world situation for internet zero by 2050, the world must be capturing 1,200m tonnes each year by 2030, with CO2 transport infrastructure and storage capability growing on the identical price.
As a part of their CO2 technique, the Gulf monarchies have additionally guess on nature-based options, equivalent to: restoring wetlands, conserving mangrove forests, defending salt marshes, restoring forest habitats, and planting bushes. In March 2021, as a part of its Inexperienced Initiatives, Riyadh introduced that it aimed to plant 50 billion bushes throughout the Center East over the approaching a long time, together with 10 billion bushes in Saudi Arabia.
All the opposite monarchies have launched related, albeit smaller, tree-planting campaigns. Nevertheless, environmental consultants solid doubt on the feasibility of planting so many bushes in such a water-stressed area. They level as a substitute to different promising nature-based options equivalent to “mineralisation” – a course of that completely captures (that’s, mineralises) CO2 inside peridotite rock formations. The UAE and Oman have already studied the potential of this answer in a pilot challenge, which discovered it might be cost-competitive and suitable with the GCC surroundings, the place peridotite is considerable. The EU recognises mineralisation as a everlasting sequestration methodology, which may be excluded from the duty to report emissions beneath the ETS.
Going one step additional, EU member states are endeavor a number of initiatives to completely lock CO2 into constructing supplies. These initiatives embody some which have even reached the commercialisation stage: for instance, the primary pavement made out of CO2-based bricks was installedin Belgium in 2020. So far, concrete merchandise containing reused CO2 are solely out there within the type of blocks and bricks, which can’t be used as constructing foundations because of their larger than regular acidity. However sooner or later, these CO2-based supplies might doubtlessly change carbon-intensive merchandise equivalent to cement, considerably lowering the carbon footprint of constructing supplies globally.
Incorporating CO2 into constructing supplies might develop into one method to make CCUS commercially viable. And business viability is how CCUS can develop into a reputable instrument in preventing local weather change. The principle obstacles to reaching this viability are the price of the tools wanted to seize and pressurise CO2, in addition to to move and retailer it. The majority of CCUS know-how presently in use stays substandard, with the least environment friendly crops capturing solely round 60 per cent of emissions. There’s additionally a excessive danger of CO2 leaks contaminating aquifers.
Right this moment, the one type of large-scale, everlasting, and worthwhile carbon sequestration is enhanced oil restoration (EOR), whereby the captured carbon is reinjected to extract extra oil or gasoline. In actual fact, almost 70 per cent of CO2 captured globally is presently used for EOR. That is clearly not sustainable, and the worldwide focus must be on extra modern options.
One other instance of commercially viable use of CCUS is CO2-based artificial fuels, equivalent to “electrofuels” or “e-fuels”. These use captured CO2 and electrical energy to provide “drop-in” diesel or gasoline, methanol, and related fuels that may energy autos, aeroplanes, and ships. EU insurance policies have incentivised CO2-based artificial fuels, specifically by the recast Renewable Vitality Directive to 2030. Though the EU ought to nonetheless part out emissions-producing vehicles and vans by 2035, it also needs to proceed to help e-fuels – particularly to assist decarbonise aviation. Some European corporations have dedicated to net-zero flights by 2050, and the Dutch airline KLM operated its first e-fuel powered flight in 2021. E-fuels are significantly dearer than standard fuels, however the know-how is progressing quick and a few corporations have already pledged to match and beat the worth of standard fuels inside a decade.
The Gulf monarchies – the place aviation is a significant enterprise – have additionally proven curiosity in e-fuels. In 2021, the UAE’s Ministry of Vitality and Infrastructure and the World Financial Discussion board, together with the Clear Skies for Tomorrow coalition, collaborated on a white paper known as “Energy-to-Liquids Roadmap: Fuelling the Aviation Vitality Transition within the UAE”. On this, they introduced the launch of a roadmap to provide 11m tonnes of sustainable aviation e-fuel by 2050 and clearly recognized aviation e-fuels as a possibility for decarbonisation, job creation, and GDP progress.
One extremely modern thought to commercialise the usage of CO2 is utilizing it to energy batteries. The Italian start-up Vitality Dome has already launched its first CO2 battery facility and entered the business scaling part, together with by initiatives within the Center East and North Africa. The corporate makes use of liquefied CO2 in a course of that permits storage of energy generated from the solar and wind in a closed-loop system that generates no emissions. The challenge obtained EU funding by way of the European Innovation Council, because of its potential to make cost-effective renewable vitality that may be dispatched across the clock and the truth that the know-how neither depends on lithium-ion batteries nor on any uncommon earth minerals equivalent to cobalt.
The potential for a viable business reuse of captured CO2 for main fossil fuels producers is substantial. GCC states would have a really robust strategic curiosity in funding related modern analysis in pursuit of the mandatory technological breakthroughs. A partnership with the EU and member states would act as a much-needed accelerator.
Hydrogen past the hype: Storage, transport, and makes use of
Hydrogen has emerged as a shared curiosity between European nations and the Gulf monarchies. European policymakers consider that hydrogen might be a answer to decarbonise hard-to-electrify sectors, together with heavy industries, transport, and aviation; or for long-term vitality storage for electrical energy manufacturing. The booming availability of low cost renewable vitality – significantly in locations such because the Gulf monarchies – might make even the most costly inexperienced hydrogen cost-competitive. Different hydrogen sorts – equivalent to blue or pink (produced utilizing nuclear vitality) – are additionally interesting and possible choices for the Gulf monarchies. Moreover, the GCC states might redeploy, to some extent, present infrastructure for the hydrogen enterprise, equivalent to port services, LNG export and import terminals and gasoline pipelines, and salt domes for storage. This might allow the long-term financial survival of oil and gasoline corporations after the vitality transition is full.
Certainly, some GCC nations (for instance, Saudi Arabia, the UAE, and Oman) have accelerated their hydrogen plans over the previous yr, in an effort to be early movers. The EU could be their most necessary market, because the bloc – alongside key European nations equivalent to Germany, Italy, Spain, the UK, and France – has formally recognized hydrogen as key to the vitality transition. Within the REPowerEU initiative and Exterior Vitality Technique, the EU reiterated its strategic curiosity in hydrogen: its desire is for inexperienced hydrogen however it additionally has a practical method to different sorts. The EU has proposed complete vitality partnerships that start with fossil fuels and accompany the transition in the direction of hydrogen, clearly laying out an intention to import 10m tonnes of hydrogen by 2030 from numerous sources, together with the Gulf monarchies. The GCC states additionally cooperate intently with European vitality giants, medium-sized corporations, and even start-ups within the hydrogen manufacturing course of.
Among the many GCC capitals, Muscat, Abu Dhabi, and Riyadh are significantly energetic on hydrogen. In 2022, Oman printed its Hydrogen Technique, in search of $140 billion in funding to focus on an annual manufacturing of 1-1.25 megatonnes of inexperienced hydrogen by 2030 – primarily at HYPORT Duqm, led by the Belgian firm DEME. This might rise to three.25-3.75 megatonnes by 2040 and seven.5-8.5 megatonnes by 2050. The UAE has additionally taken important steps to develop inexperienced hydrogen, inside its borders and overseas. In 2021 the UAE inaugurated the most important hydrogen plant within the Center East and North Africa, a joint initiativebetween Siemens Vitality and Dubai Electrical energy and Water Authority, and began constructing the area’s first devoted export terminal in Fujairah. ADNOC targets 1 megatonne of inexperienced hydrogen output by 2030. Saudi-based agency ACWA Energy is constructing the world’s largest utility-scale, commercially primarily based hydrogen facility powered totally by renewable vitality at NEOM. By 2025, this may produce as much as 650 tonnes per day of inexperienced hydrogen and 1.2 megatonnes of inexperienced ammonia for export. ACWA Energy introduced this yr a plan to construct two extra hydrogen services within the space adjoining to NEOM. As well as, Saudi Arabia and the UAE have unveiled a number of blue hydrogen initiatives, together with a facility close to the Saudi Jafurah gasoline area, which is able to go browsing in 2024; and an Emirati large-scale blue ammonia plant at Ruwais, beginning manufacturing in 2025. Qatar has been slower to embrace inexperienced hydrogen, however it has launched a challenge for the world’s largest blue ammonia facility. It will produce 1.2 megatonnes of blue ammonia by 2026, with electrolysers contracted to German producer ThyssenKrupp Uhde. Qatar’s sovereign wealth fund can be evaluatinggreen ammonia initiatives elsewhere within the area, equivalent to in Egypt.
However dangers and challenges stay. For starters, a surge in demand for hydrogen, photo voltaic panels, electrical autos, batteries, and different elements essential to the EU’s inexperienced transition will improve competitors over the uncooked supplies wanted to scale up manufacturing, equivalent to nickel and platinum. World suppliers of those uncooked supplies are situated principally in nations equivalent to China, Russia, Indonesia, and the Philippines, in addition to in Africa (particularly South Africa but additionally Zimbabwe). In its 2023 Vital Uncooked Supplies Act, the EU proposed numerous options to handle this, most notably a diversification of provide sources. Given the abundance of hydrocarbons within the GCC monarchies, it’s conceivable that there are additionally some reserves of essential uncooked supplies within the area. Saudi authorities, for instance, have advised that substantial mineral reserves exist within the kingdom, together with bauxite, aluminium, coal, copper, zinc, phosphates, uranium, and gold.
The manufacturing of inexperienced hydrogen additionally calls for big portions of water. GCC nations rely closely on desalination for his or her water wants, together with for renewable vitality manufacturing. Desalination crops are normally energy-intensive and infrequently powered by fossil fuels. Usually, a by-product of desalination is brine, which will increase the salinity of the coastal waters into which it’s discharged. This disrupts the marine surroundings, resulting in a proliferation of poisonous algae that, in flip, threatens to disrupt desalination processes. In actual fact, if water within the Gulf reaches what consultants name “peak salt”, desalination might develop into unfeasible. On this sense, NEOM’s desalination plant, which is designed to get rid of brine sustainably utilizing know-how from French firm Veolia, might be significantly precious. In actual fact, GCC states are exhibiting growing curiosity within the newest desalination applied sciences that, within the close to future, might allow “brine-mining” – or the extraction of chemical elements from brine to be used in industrial processes.
Lastly, new kinds of hydrogen infrastructure – together with fuelling techniques, pipelines, port upgrades, and ammonia synthesis and transport techniques – will finally should be developed to scale up hydrogen use globally. With out pipelines, hydrogen must be transformed into derivatives equivalent to ammonia or artificial gasoline, or might be used to provide supplies equivalent to zero-carbon metal on website, however each conversion comes with important added price and an additional effectivity loss. The size of the required funding and improvement is so giant that – however the EU’s desire for southern Mediterranean nations, the place the hydrogen enterprise can spur progress and curb migration – the Gulf monarchies are the sensible interlocutors for Europeans within the Center East and North Africa within the quick time period. The Gulf states supply robust financing capacities, pre-existing (export) infrastructure, quick development instances, and superior know-how within the hydrogen sector, thereby permitting them to implement pilot initiatives shortly. Their location, within the centre of the closely travelled EU-China transport hall, is good for the manufacturing of hydrogen derivatives, particularly people who can be utilized as maritime gasoline. If this allows them to profit immediately from clear vitality commerce with the EU, Gulf monarchies would seemingly additionally contribute to World Gateway investments in infrastructure to show Mediterranean nations into transit hubs. Transit infrastructure can then be utilized in the long term too, as soon as Mediterranean nations are additionally able to develop into producers and exporters.
Vitality engagement between Europe and the Gulf monarchies accelerated after the vitality safety disaster triggered by Russia’s invasion of Ukraine. It now wants to maneuver from conversations about tactical must strategic cooperation, which elements in local weather imperatives. With its self-perceived place of power, the UAE is clearly intent on delivering a profitable COP28 that features formidable achievements and management. Due to this fact, if Europeans overcome their uncompromising method and give attention to coalition-building, they may assist safe significant outcomes. Determination-makers within the EU have a number of coverage choices to contemplate.
Promote vitality effectivity and electrification
The EU ought to intensify its diplomatic efforts to advertise vitality effectivity within the GCC. It ought to focus particularly on: decarbonising transport networks; encouraging the introduction of enforceable norms in inexperienced buildings, particularly on insulation and cooling; and sensitising shoppers to the significance of vitality effectivity.
Right here, the EU-GCC Cooperation on Inexperienced Transition and De-carbonisation might develop into a very helpful platform – as soon as it’s totally outlined. The target of this new motion is to facilitate cooperation in analysis and enterprise, and promote the uptake of inexperienced transition insurance policies and applied sciences in GCC nations, by exchanging greatest practices and customised choices for coverage and follow. As a method to compensate for its delayed set-up, the EU’s engagement beneath this framework ought to give attention to speedy supply. It might begin by arranging dialogue on electrification between transmission system operators and distributors, in addition to regulators. The EU might additionally use the initiative as a automobile to supply specialised technical and coverage help on inexperienced buildings to the related authorities within the GCC. On client behaviour, European and EU diplomats in GCC capitals ought to proceed to put money into communication and consciousness campaigns.
Give attention to the round within the round carbon financial system
Boosting the carbon financial system’s circularity depends on creating the ‘take away, reuse, and recycle’ pillars of the idea. Within the GCC states, carbon seize storage and transport infrastructure is considerably underdeveloped, and legal guidelines and rules on CCUS frameworks usually have gaps. Linkages exist already between GCC nations, so multi-user CO2 infrastructure might match properly within the area. The EU ought to supply a blueprint on tips on how to method this, and Denmark, Belgium, the Netherlands, and Norway are already actively engaged on transnational transport and storage. Extra importantly, to harness the mandatory funding and to present credibility to the idea of a round carbon financial system, the EU and GCC states might contribute to addressing the worldwide must develop business viability for captured or recycled CO2. That is very a lot in keeping with the “enterprise mind-set” which Jaber has been advocating within the run-up to COP28. But, public sector involvement might be essential to fund industrial analysis and improvement, particularly within the GCC states – the place this type of funding is the lowest amongst OECD economies.
The EU ought to use its forthcoming CCUS technique, because of be printed on the finish of 2023, to give attention to the business viability of the captured or recycled CO2 by selling analysis and improvement. For instance, the EU ought to encourage the GCC nations to develop into way more concerned in initiatives such because the Innovation Fund and make investments meaningfully within the demonstration of economic viability of modern low-carbon applied sciences. European governments ought to encourage their GCC counterparts to make substantial investments in and quickly deploy environment friendly, new-generation CCUS know-how within the Center East and North Africa. The Innovation Fund has already supported the commercialisation of some artistic methods to reuse CO2 – together with mineralisation, CO2-based constructing supplies, and CO2 batteries. Past the untapped benefits provided by extra established applied sciences equivalent to e-fuels, the GCC nations would profit drastically from supporting these different potential functions. Crucially, the EU’s CCUS technique also needs to purpose to beat inconsistencies and lack of readability on requirements for CCUS certification.
Speed up inexperienced hydrogen deployment
The important thing to unlocking hydrogen’s potential is to take a look at the challenges throughout all the ecosystem. The EU might tackle these challenges within the context of hydrogen partnerships with key GCC producers, which the bloc’s directorate-general for vitality ought to finalise as quickly as potential.
As industrial actors begin trying into operationalising present cooperation agreements on hydrogen, the query of mutually agreed requirements – protecting security, product high quality, and carbon content material, in addition to techniques of certification and accreditation – has develop into extra distinguished. Business should account for carbon emissions throughout all the course of of manufacturing hydrogen, together with within the desalinisation of the water wanted for inexperienced hydrogen manufacturing within the GCC. The EU and member states ought to lead on creating mutually agreed requirements and incentivise the usage of renewables-powered desalination crops that make use of modern know-how for the sustainable disposal of brine in inexperienced hydrogen manufacturing.
One other essential facet is the supply of satisfactory alternatives for coaching and training at varied ranges. This could begin from vocational coaching for trade operators, focusing on the fossil fuels trade too, and prolong to formal training that helps scientific advances in vitality research. The EU ought to give attention to these by Erasmus+ and Erasmus Mundus actions with GCC members, which might be welcome within the GCC as a part of their drive to draw know-how.
A longstanding problem within the hydrogen ecosystem is the required improve of present vitality infrastructure and the development of latest infrastructure. These span from hydrogen-ready pipelines and a refuelling community in ports and import terminals, to tank storage techniques and salt caverns. GCC hydrogen exports to Europe will seemingly happen by way of tankers to start out with, given the continent’s restricted reception capability and choices to be used, the absence of pipelines, and the presence of ready-to-use export infrastructure for ammonia and artificial fuels alongside the GCC coast. Tanker-based commerce additionally suits with assuaging European issues about creating new patterns of dependency. In the long term, the EU’s and member states’ vitality safety imperatives could be higher served by extra sturdy import infrastructure, together with pipelines. The EU ought to suggest co-investment with GCC governments by the World Gateway initiative to map out a future vitality hub within the japanese Mediterranean. This might be particularly helpful for diversifying import routes to Europe by bypassing bottlenecks in Egypt. Longstanding tensions between GCC states and Turkey are presently de-escalating, which provides (beforehand missing) credibility to this proposal.
Construct resilient inexperienced provide chains
Final however not least, a core concern that cuts throughout the inexperienced transition and decarbonisation is the sustainability of inexperienced provide chains. The previous few years have seen frequent supply-chain disruptions, because of covid-19, Russia’s conflict on Ukraine, and Western tensions with China. Strategic vitality ties between Europeans and the Gulf monarchies due to this fact require a sure stage of reciprocal belief within the provide and worth chain.
The EU ought to take into account launching talks with their GCC counterparts on a preferential commerce settlement for decarbonisation and the round financial system. A complete EU-GCC free commerce settlement is prone to run into the identical obstacles which have plagued these discussions for the previous 30 years, additional difficult by the CBAM. However a selected settlement to liberalise commerce on services linked to the inexperienced transition would have a number of financial advantages and may face fewer political obstacles. It might improve the benefit of “Made within the EU” applied sciences for desalination, hydrogen, CCUS, and even energy-efficient family home equipment. It might additionally encourage European funding in mining, which GCC policymakers and consultants have recognized as key to financial diversification within the GCC nations, with a view to enhancing entry to extracted essential uncooked supplies. The EU ought to look extra particularly on the GCC nations as a possible supply of uncooked supplies, whereas sustaining a essential method and ensures to safeguard the rights of the required labour drive.
Europeans ought to view the summits going down in Saudi Arabia and the UAE over the approaching months – the second Center East Inexperienced Initiative Summit, the UN’s Local weather Week, and COP28 – as catalysts to improve their vitality relations with the GCC monarchies right into a extra strategic engagement on inexperienced transition and decarbonisation. The main focus of this must be tangible progress in technical and scientific cooperation associated to the event of inexperienced vitality commerce and a round carbon financial system, as properly lowering the monetary and local weather price of the transition. That method, the EU and member states can transcend ideological divides and have interaction these elementary actors to reply to European imperatives of vitality and local weather safety.
Concerning the writer: Cinzia Bianco is a visiting fellow on the European Council on Overseas Relations, the place she works on political, safety, and financial developments within the Gulf, in addition to the area’s relations with Europe. She holds a PhD in Gulf research from the College of Exeter. Between 2013 and 2014, Bianco was a analysis fellow on Sharaka, a European Fee challenge on EU-GCC relations. Prior to now, she labored as a non-resident scholar on the Center East Institute. Her earlier publications for ECFR embody “Gulf of distinction: How Europe can get the Gulf monarchies to pursue peace with Iran”.
Supply: This text was printed by ECFR
This paper’s goal was at all times to bridge the hole between conversations amongst consultants and the talk within the non-expert coverage and enterprise communities. The writer couldn’t have achieved this with out the work, recommendation, and help of many distinguished technical consultants from each Europe and the Gulf monarchies. The writer would additionally wish to thank the officers, diplomats, and trade executives in each Europe and the Gulf for devoting a few of their time to the discussions that kind the premise of this paper. Lastly the writer needs to thank her ECFR colleague Kim Butson for the enhancing work.
 Writer’s interviews with officers and consultants from all GCC nations, 2023.
 Writer’s interviews with officers and consultants from all GCC nations, 2023.
 Writer’s interviews with officers and consultants from all GCC nations, 2023.
 Writer’s interviews with EU officers, 2023.
 Writer’s interviews with officers and consultants from all GCC nations, 2023.
 Writer’s interviews with officers and consultants from the UAE, 2023.
 Writer’s interviews with officers and consultants from all GCC nations, 2023.
The European Council on Overseas Relations doesn’t take collective positions. ECFR publications solely symbolize the views of their particular person authors.