Page 4 - MEOG Week 43 2021

MEOG COMMENTARY MEOG

Saudi sets sights on net zero

The Saudi state and its main energy arm this week set ambitious
net-zero targets but oil will remain key to the Kingdom’s economy.

SAUDI ARABIA SAUDI Arabia this week announced that it Motiva in the US and Netherlands-based chemi-
would reduce emissions from the Kingdom to cals specialist Arlanxeo.
‘net zero’ by 2060, with oil firm Saudi Aramco However, most of the company’s extensive
WHAT: also setting an ambitious target for emissions. downstream slate is not included in Scope 1 and
Riyadh anticipates Aramco’s target is to reach ‘net zero’ Scope 1 and 2 reporting and it remains to be seen whether
reaching net zero by Scope 2 greenhouse gas (GHG) emissions by Scope 3 emissions will be covered in Aramco’s
2060, with Aramco to cut 2050, suggesting that both goals will rely heavily long-awaited Sustainability Report when it is
Scope 1 and 2 emissions on the offshoring of emissions, with Riyadh set published in mid-2022.
from its operations to the to remain reliant on crude oil exports for decades President and CEO Amin Nasser said: “The
same level by 2050. to come. road ahead will be complex, as the world’s tran-
Saudi’s improbable target was announced by sition to a more sustainable energy future will
WHY: Crown Prince Mohammed bin Salman (MbS) require collective action and major technological
The move stops short during the Kingdom’s Saudi Green Initiative breakthroughs. But we remain focused on deliv-
of including Scope 3 Forum ahead of the COP26 climate conference. ering reliable and affordable energy, investing
emissions, which Aramco He said that 450mn trees would be planted for the long term as our efforts to further reduce
has not yet begun across Saudi Arabia amid efforts to rehabilitate emissions gain momentum.”
reporting. large areas of degraded land by 2030 and the mit-
igation of 200mn tonnes of emissions. Hydrogen hopes
WHAT NEXT: Meanwhile, a statement released by Aramco Aramco’s strategic repositioning has been in
Blue hydrogen will disclosed the company’s “ambition to achieve the works for some time and despite the effort
feature heavily for net-zero Scope 1 and Scope 2 greenhouse gas to reduce the emissions of its operations, hydro-
Aramco and the emissions across its wholly owned operated carbons will remain firmly at the core of the
Kingdom’s energy assets by 2050”. business.
minister said that the It added: “This ambition is an important part This was highlighted during the Saudi Green
Jafurah gas field will be of the company’s focus on long-term shareholder Initiative Forum by Energy Minister Prince
leveraged to generate value creation by advancing its goals through a Abdulaziz bin Salman, who said that the giant
hydrogen. company-wide approach [to] sustainability.” Jafurah unconventional gas basin would be lev-
Scope 1 and 2 emissions cover direct emis- eraged to produce blue hydrogen as the country
sions from company-owned or controlled seeks to extend its leadership of the oil sector into
sources as well as indirect emissions from the hydrogen.
generation of purchased electricity, steam, “We are the biggest adventurers when it
heating and cooling consumed by company. comes to blue hydrogen,” he said. Prince Abdu-
Meanwhile, Scope 3 includes all other indirect laziz added: “We’re putting our money where
emissions that occur throughout the company’s our mouth is on hydrogen. We have a terrific
value chain. gas base in Jafurah we will use it to generate blue
The omission of Scope 3 is unsurprising, as hydrogen.”
Aramco has not yet reported these indirect emis- Under its preliminary $110bn plans, Aramco
sions in the three years since it began external intends to kick off production at Jafurah in early
reporting. The company did, however, expand 2024 and achieve 2.2bn cubic feet (62mn cubic
the reporting boundaries of Scope 2 in 2019 to metres) per day of sales gas by 2036. It is also
include affiliates under Aramco’s control, which expected to produce around 550,000 barrels per
include Saudi Aramco Jubail Refinery (SASREF), day (bpd) of NGLs and condensates.

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