DUBAI: Even before the start of the war in Ukraine, one thing quickly became clear: the demand for conventional energy was not decreasing. Today, with Brent crude hovering around $107 a barrel and natural gas costing $6.95 a MMBtu amid heightened risks of supply disruptions, the looming fiscal windfall gives Gulf Arab states additional resources to accelerate their transformation into “green economies”.

From the ambitious “circular carbon economy” to net-zero emissions pledges to investments in renewable energy and the production of electric vehicles, the past year has already seen the launch of many initiatives by these energy-exporting countries. energy in response to calls for accelerated action to tackle climate change. .

At the same time, the Gulf region has made notable progress in the development of large-scale solar and wind energy, including phase three of the Mohammed bin Rashid solar project in Dubai completed last year and the inauguration of the Saudi Arabia’s first wind farm in Dumat. Al-Jandal.

“These are watershed moments that build momentum through knowledge and experience,” Francesco La Camera, director general of the International Renewable Energy Agency, better known as IRENA, told Arab News. .

“These low-cost renewable energy projects also open the door to the production of green hydrogen at a competitive cost. We believe that hydrogen will have a central role to play in the decarbonization of the energy system.

IRENA’s World Energy Transitions Outlook shows that hydrogen could account for 12% of total final energy consumption worldwide by mid-century, up from current marginal levels.

“There are already clear signals of intent from the region to seize these market opportunities, which could prove to be a new and important aspect of the transition to which the region can apply its hydrocarbon expertise and experience. “, said The Camera.

Ahead of the UN Climate Change Conference, COP26, in Glasgow last November, the UAE has pledged to achieve net zero carbon emissions by 2050 and invest up to $160 billion in clean and renewable energy solutions.

The previous month, Saudi Arabia launched the Saudi Green and Middle East Green initiatives, committing the Kingdom to achieve net zero greenhouse gas emissions by 2060 and plant 10 billion trees over the next few decades. , rehabilitate 8 million hectares of degraded land and allocate new protected areas.

More recently, Abu Dhabi National Oil Company and Abu Dhabi National Energy Company announced that they would join UAE state-owned holding company Mubadala as shareholders in clean energy company Masdar.

The partnership is designed to increase Masdar’s renewable energy capacity to 50 gigawatts by 2030 and create a global clean energy powerhouse, with a focus on areas such as green hydrogen and renewable energy .

Similar developments are taking place in Saudi Arabia, including several projects at NEOM – the Kingdom’s smart city on the Red Sea coast – including the launch of Oxagon, the world’s largest floating industrial complex.

“The Oxagon Project is a revolutionary idea to reshape the way industries work at the entrance to the world’s most popular shipping channel, powered by 100% renewable energy and requiring high levels of symbiosis between various industries” Daniel Gribbin, corporate sustainability manager at WSP Middle East, told Arab News.

“The region’s desire for a more sustainable future is no secret. Levels of transparency and individual consumer behaviors, along with the vision of regional leaders, have accelerated the need to react and act, so that they can have a seat at the global table.

“The demand for sustainability considerations from international investors has also been a driving force in increasing ESG awareness in the regional market, contributing to valuation and reputation.”

The past year has witnessed a sea change in the regional approach to climate action, according to Nawal Al-Hosany, UAE Permanent Representative to IRENA.

At COP26, for example, the UAE announced a number of historic commitments and partnerships to raise ambitions, including the UAE-IRENA Energy Transition Accelerator Financing platform, which aims to raise $1 billion to accelerate the transition to renewable energy in developing countries.

The UAE, through the Abu Dhabi Fund for Development, has already pledged $400 million in seed funding to the platform.

“We also announced the Hydrogen Leadership Roadmap, which aims to make the country a competitive global hydrogen exporter,” Al-Hosany told Arab News.

“Ahead of COP27 in Egypt and COP28 in the United Arab Emirates in 2023, the momentum for climate action will continue to create a ripple effect across the Middle East.”

The Camera describes the energy transition as an unstoppable megatrend, driven by innovation and driven by the pursuit of long-term prosperity and climate action.

“GCC countries recognize this opportunity and act accordingly,” he told Arab News.

“It is also important to recognize that the Gulf region is positioning itself as a serious player in the global energy transition, as its leaders understand that their wealth of hydrocarbon resources and vast clean energy potential offer them an opportunity to build a resilient economy around knowledge, clean energy technologies and long-term energy leadership.

Al-Hosany believes that hydrocarbons will continue to play a vital role in the energy system for decades to come, as managing a fair and inclusive energy transition will be key to reversing the trend of climate change.

“We need to rethink the balance between economic growth and sustainable development,” she said.

“But this transition will not happen overnight. We need to move towards an energy mix that involves renewable and clean energy sources. Although we must evolve into the energy system of tomorrow, we cannot simply disconnect from the energy system of today. It’s not as easy as flipping a switch.

From desertification to droughts, the Middle East is particularly vulnerable to the impact of climate change. And while each country has its own reasons for switching from fossil fuels to renewables, the Gulf region has a lot to gain from the transition, according to La Camera, even if there are uncertainties about the long-term future of renewables. hydrocarbon exports. .

“Harnessing its vast clean energy resources offers diversified growth and the creation of new jobs well into the 21st century,” he said. “Also, let’s not forget the perilous situation this region could find itself in if global temperatures continue to rise unabated.”

The Camera said the climate crisis “is likely to send regional average temperatures to around double the global average this century while increasing pressure on already scarce water supplies. This is a deep and very real threat that the region cannot solve alone, but must be part of the solution.

Gribbin believes there is no “silver bullet” to the challenge facing humanity. Thus, policy makers, businesses and individuals must work together to find common solutions.

“Investing in the solutions to the challenges we face with climate change is not only good for humanity, but it’s also smart business,” he said.

“Individual drivers and consumer behavior have changed, and the demand for ‘green’ and sustainable products will only increase. As a region highly dependent on imports, especially food, and which has contributed to the proliferation of hydrocarbons, early investment is essential to ensure that we are part of the solution.

By acting now, Gribbin said, the region will ensure both a thriving economy and an environment that can support a high quality of life for generations to come.

The invasion of Ukraine has the potential to accelerate the global trend towards renewable energy, with Europe expected to significantly reduce its dependence on Russian natural gas supplies. If the Gulf countries use their budget surpluses to accelerate the development of renewable energy, hydrogen, ammonia export and carbon capture projects, they will emerge well prepared for the post-oil era.

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Twitter: @CalineMalek