(Bloomberg) -- Saudi Arabia, the world’s largest oil exporter, committed to ending planet-warming emissions by 2060 but made clear the new plan won't work if the country is stopped from continuing to pump millions of barrels a day for decades.
It’s “an aim that enables us to say to the world: We are with you. We share the same concern. We want to evolve,” Energy Minister Abdulaziz bin Salman said. The country will take a “holistic and technological” approach in meeting the target, he added.
The announcement will prove to be a boost for the COP26 climate summit that starts in Glasgow, Scotland, on Oct. 31, even as experts raise questions about the credibility of the goals set by the fossil-fuel giant.
The world “cannot operate without fossil fuels, without hydrocarbons, without renewables… none of these things will be the savior,” Prince Abdulaziz said at the Saudi Green Initiative Forum. “It has to be a comprehensive solution.”
In global talks, such as G-20 meetings or COP summits, Saudi Arabia often pushed for ensuring that fossil fuels have a longer-lasting role in the energy transition. Only months ago, Prince Abdulaziz told a private event that “every molecule of hydrocarbon will come out.”
The energy supply crisis the world is facing has given the country and its allies in the Organization of Petroleum Exporting Countries even more reasons to double down on the message, even though the reasons behind the shortages are less to do with green policies and more do to with a rapid rise in demand for energy after pandemic lockdowns.
“The world has sleepwalked into the supply crunch,” Sultan Al Jaber, minister of state for the United Arab Emirates and chief executive officer of Abu Dhabi National Oil Co., said during a panel discussion at the forum. “We cannot underestimate the importance of oil and gas in meeting global energy demands.”
While developing countries are seeking about $100 billion annually to help finance the energy transition and build resilience against climate change, Saudi Arabia won’t look to tap those sources. “We are not seeking grants,” Prince Abdulaziz said. “We are not seeking finance. We are not seeking any monetary support.”
Saudi Arabia, which relies on fossil-fuel exports for the majority of its gross domestic product, has struggled to diversify its economy. The country's cash cow, state-owned oil giant Saudi Aramco, also set a goal to reach net-zero emissions by 2050, but only for emissions from its own operations. More than 80% of the company's total emissions come from customers burning its fossil fuels, which aren't covered by the pledge.
Without continuing to export oil, the energy minister warned, the country may not have the ability to reach those goals. The nation has the highest per-capita emissions among G-20 countries.
So what’s the plan for cutting emissions? “We believe that carbon capture, utilization and storage, direct air capture, hydrogen and low-carbon fuels are the things that will develop the necessary ingredients,” Prince Abdulaziz said. That will require “international cooperation in research, developing technologies, and, most importantly, deploying these technologies.”
Even though scientists have been warning about impacts of climate change for more than 30 years, it’s only in the last few that countries have come out and set net-zero goals that are crucial if global temperatures are to be stabilized. Green technologies will play an essential role in helping the world meet climate targets, but scientists agree that those objectives wouldn’t be within reach without reducing fossil-fuel extraction and use.
“Why 2060? Because most of these technologies may not mature before 2040,” the energy minister said.
The target year of 2060 matches the ambitions set by Russia and China, but it lags those set by other large economies like the U.S., the U.K. and the European Union. Even among petrostates, the UAE earlier this month set a net-zero goal set for 2050.
"It's an aspirational goal,” said Karen Young, senior fellow at the Middle East Institute. “In some ways, it's more of a branding exercise than an actual long-term policy commitment."
The energy minister reiterated a goal that the kingdom plans to increase the share of renewables to 50% of the mix, with natural gas covering the other half, by 2030. That would require a huge change in less than nine years for a country where solar power barely registers today. The country committed to investing 700 billion riyals ($187 billion) on the green economy, without specifying the period over which that money would be spent.
“This will change the balance of COP,” said Marco Alvera, chief executive officer of Snam SpA, a gas logistics company. “The private sector is very excited by all that’s happening in the Middle East and in the kingdom.”
The COP26 summit has been labeled a “make or break” moment for the planet. United Nations officials welcomed the Saudi announcement that will help the testy negotiations set to happen over the next few weeks.
“The existence of humanity on this planet is at risk because of climate change, so the announcement today is really a very, very powerful signal at the right moment,” said Patricia Espinosa, executive secretary to the UN Framework Convention on Climate Change, which organizes COP meetings.
As part of the Paris climate agreement, which Saudi Arabia signed on to, countries must present plans setting out targets for reducing emissions for the next decade. Prince Abdulaziz showed an official letter to the forum audience confirming that the country had submitted its so-called “nationally determined contributions” toward global climate goals.
He said the country would reduce emissions by 278 million tons of carbon dioxide by 2030, relative to a business-as-usual baseline. In reality, he said, that would mean the nation’s emissions will be between 741 million tons and 849 million tons that year. Comparing those figures with figures from the Global Carbon Project shows that the actual emissions in 2030 may be between 27% and 45% higher than the emissions in 2019.
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