By Jose Chaloub
From January 12th to 18th, decision-makers will come together for Abu Dhabi Sustainability Week, a vital intermediary forum for progressive, cross-sector collaboration in the long months between the UN’s annual climate summits.
This year’s Sustainability Week is of the utmost importance, providing a critical opportunity to get back on track after December’s disastrous COP29.
In 2023, world leaders made history at COP28, with 197 countries agreeing to back the landmark UAE Consensus, calling for a global transition away from fossil fuels.
But, in the year that followed, raised hopes spiralled back down to reality. At COP29, delegates from prominent petrostates lobbied to delay the transition agreement and block more ambitious commitments. Iraq and Saudi Arabia teamed up to scupper negotiations, while their Azerbaijani host was busy forging oil deals on the side.
Sympathisers could easily argue that these Gulf nations are acting in the best interest of their economies and thus, their citizens. Currently, oil accounts for around 40% of Saudi GDP and a staggering 75% of fiscal revenues. Similarly, Iraq relies on oil revenues for 85% of its annual budget.
But their problems will not be solved by burying their heads in the sand. Like it or not, the climate crisis has forced the whole world to embark on an unstoppable journey towards a cleaner and greener tomorrow.
Gulf nations are not at fault for their historic use of natural resources to bolster their economies and improve living standards, but, in order to remain competitive in a rapidly changing environment, they must stay ahead of the curve.
The Abu Dhabi National Oil Company (ADNOC), for example, has gained a head start on its closest competitors. In 2023, its ambitious target of achieving net-zero emissions was brought forward to 2045 – five years ahead of most industry players.
Moreover, its bold commitments have been shown not just in words, but in direct action. As of January 2024, the State-owned firm has allocated a whopping $23 billion to decarbonization projects, low-carbon solutions and emerging technologies.
Last October, ADNOC acquired an innovative German chemicals company known as the inventor of modern chemistry. The $16.4 billion deal was a saving grace for the ailing Covestro, funding its pioneering development of sustainable polymers and novel recycling techniques. For ADNOC, the takeover agreement added another string to its bow, strategically diversifying its operations in line with the shifting market.
But it wasn’t done there. Less than two months after Covestro’s acquisition, ADNOC launched its XRG unit with an initial value of $80 billion. XRG will invest in low-carbon energy, green technology and sustainable chemicals from all round the world, with the aim of doubling its asset value within ten years.
This aggressive growth strategy, with its focus on sustainable innovation and diversification, exemplifies ADNOC’s commitment to the delivery of a just transition. Not only is it preserving its own business, it is also skyrocketing the UAE economy, creating jobs and striking the delicate balance between maintaining energy security and navigating the climate crisis.
Meanwhile, its Gulf State competitors are floundering in a sinkhole of their own making – talking the talk, not walking the walk. Saudi Arabia’s Aramco, for example, publicly acknowledges the need for transition in the same breath as its promise to expand its oil and gas business. Similarly, QatarEnergy has doubled down on its production of liquefied natural gas, despite the fracturing illusion of its use as a climate-friendly fuel.
These companies ought to take a leaf from ADNOC’s book. Gulf economies will not be saved by butting heads with the rest of the world, but by joining them in a reasonable, strategic transition that benefits everyone for generations to come.
