No specific plans presented to G20 members
Saudi officials say world will still need its crude
EU keeping ‘critical eye’ on scheme’s implementation
Dubai — Saudi Arabia has used its year in the G20 presidency to promote its circular carbon economy scheme, which it says will lower carbon emissions if adopted worldwide, while maintaining abundant energy supplies.
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The circular carbon economy concept has been endorsed by G20 member states but has yet to be put into practice, and the kingdom has not revealed any timelines or targets associated with the plan.
The Saudi climate change mitigation scheme is based on “four R’s” — reduction, reuse, removal and recycling of carbon — aimed at lowering the amount of carbon emissions being released into the atmosphere. Under this umbrella, initiatives such planting trees as natural carbon sinks, and increasing the capacity of carbon capture storage, sequestration and utilization projects, have been proposed by Saudi Arabia.
Notably, presentations on the topic given recently by Saudi energy minister Prince Abdulaziz bin Salman did not mention any reduction in hydrocarbon production.
“What is fundamentally important is the reduction of emissions to mitigate the climate change concern. We should use every meaningful way of doing that. We should be totally indifferent of whether we are reducing, recycling, reusing, or removing,” Abdulaziz said at a G20 energy ministerial meeting. “We are sitting on a huge amount of hydrocarbon resources and we want to bring it to better use.”
S&P Global Platts posed questions to all the G20 states and institutions — which besides the EU include the US, UK, Canada, Japan, France and Germany — about their understanding of the timelines and targets related to the scheme, and how it will be enacted both in Saudi Arabia and in their own countries. Only the EU responded, saying that it would be closely monitoring how Saudi Arabia implements the scheme.
“We are not aware of any specific official plan at this point, just a conceptual framework,” an EU official told S&P Global Platts, on condition of anonymity.
“It remains to be seen what climate policy measures the Kingdom of Saudi Arabia adopts on the basis of the circular carbon economy (CCE) concept. Of course one needs to keep a critical eye,” the EU official said. “We are waiting to see if and how those concepts are integrated in official policy of the Kingdom of Saudi Arabia, how they will be communicated externally as the Saudi contribution to the Paris Agreement and how they are going to be implemented.”
EU INSISTS ON EMISSIONS CUTS
The Paris Climate Agreement, which was brokered in 2016 and gained signatures from 196 countries, calls for countries to act to prevent keep global warming to below 2 degrees Celsius, which would require a curtailment of fossil fuel extraction.
By contrast, the Saudi CCE plan does not have a stipulated target, and the kingdom, which is the world’s largest exporter of crude oil, has repeatedly stated it will not reduce its production levels.
Moreover, in earlier drafts of the CCE, reducing emissions was not prioritized, a spokesperson for the European Commission told S&P Global Platts.
“The EU insisted on putting up front the reduction of the emissions as a key objective of the platform. This was eventually well reflected in the declaration where leaders agreed to recognize ‘the key importance and ambition of reducing emissions’,” the spokesperson said.
“While the EU’s own policies are built on other concepts, we appreciate the opportunity to explore commonalities and areas of mutual interest with our G20 partners.”
The Saudi Ministry of Energy, as well as the King Abdullah Petroleum Studies and Research Center (KAPSARC), which are the architects of the CCE scheme, did not respond to S&P Global Platts’ questions.
Meanwhile, Saudi Arabia is preparing to increase its crude production capacity — currently limited by its commitments to the OPEC+ deal — in future years. In March, state-run Saudi Aramco said it had received a directive from the energy ministry to increase its maximum sustainable capacity from 12 million b/d to 13 million b/d.
And Khalid al-Falih, Saudi Arabia’s investment minister and a former minister of energy, said Nov. 21 during the G20 leaders summit in Riyadh that the kingdom believes the world “is going to need all energy sources” through the energy transition.
“I wouldn’t be surprised if we continue to export at the level we are exporting for decades to come, in terms of oil and gas, because the world needs it,” he said.