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UAE-UK Business Council unveils blueprint for energy transition

Worker at an oil shale power plant. The white paper calls on the UAE and UK to help oil and gas workers transfer their skills to renewable industries Reuters/Ints Kalnins
The Saudi-based multilateral organisation will provide financing to private sector companies and infrastructure projects
  • White paper sets out recommendations in run-up to Cop28
  • Hydrogen, carbon capture, technology and skills among priority areas
  • UAE, UK working on jet fuel and hydrogen projects, but more needed

The UAE and UK must step up co-operation on clean energy if they are to meet their national decarbonisation targets, the UAE-UK Business Council has said.

The council’s energy transition white paper, published on Tuesday, said there was “an untapped commercial opportunity to be exploited from closer collaboration between both countries in terms of developing the technologies to sustain and accelerate the transition; working together to address the skills gap in the sector; and partnering to unlock the finance necessary to power the green revolution.

It added: “The UAE-UK Business Council will prioritise these three areas over the year ahead as momentum builds towards Cop28.” 

Both countries have set a 2050 deadline to reach net zero and this week signed a memorandum of understanding to enhance collaboration in the energy sector. 

The energy transition white paper sets out recommendations for how the two countries can work together to meet national and global targets in the run-up to Cop28, which will be held in Dubai at the end of this year. Chief among them are to set up a joint team and series of workshops to define the scope of their collaboration. 

This team should discuss commercial opportunities in areas such as hydrogen, carbon capture, biofuels, aviation fuels, nuclear small modular reactors and advanced modular reactors, fusion energy, renewables, nuclear decommissioning and waste storage, and industrial decarbonisation.

The aviation and maritime sectors are particularly difficult to decarbonise as electrification is “not feasible” in most areas, according to the report.

The two countries are working on one of the world’s first waste-to-fuel aviation projects: a partnership between four UAE companies – oil giant Adnoc, renewable energy specialist Masdar, airline Etihad and waste manager Tadweer – and UK energy giant BP. 

The project, which aims to use advanced waste gasification technology to convert municipal solid waste to sustainable aviation fuel, could be “replicated several times in the Middle East and other regions”, the white paper said. 

Etihad undertook its first flight using sustainable aviation fuel in October, working with UK data analytics company Satavia to optimise flight planning.

Ahmed Al Sayegh, co-chair of the UAE-UK Business Council, said the energy transition paper “highlights sustainable aviation as one of the sectors that presents the strongest opportunity for commercial collaboration between both countries”. 

Simon Penney, the UK’s trade commissioner to the Middle East, said: “We are continuing to work closely with the UAE to tackle the challenge of ensuring a cleaner, quieter, smarter future for the aviation industry.”

The “Cop28 UAE” logo is shown during the opening of Abu Dhabi Sustainability Week on January 16. The business council’s report lists priorities for the months leading up to the UN climate summit. Picture: Reuters/Rula Rouhana

Another key area is hydrogen. The use of green hydrogen as an alternative to hydrocarbons remains in its infancy because the regulatory framework – in particular for transporting hydrogen locally and internationally – needs developing and the pricing mechanism needs “further clarity”, according to the report. 

“The UK and the UAE could work together on developing an optimal regulatory framework for the commercialisation of hydrogen,” it said. 

Annual revenues from green hydrogen in the GCC are estimated to grow to about $200 billion by 2050, according to a 2021 study. A report published this week predicted that the GCC would play a major role in the global hydrogen market.

Adnoc is investing in a 25 percent stake in BP’s blue hydrogen project in northeast England, H2Teesside. The plan is to build two 500mw hydrogen production units by 2030 and start operations in 2027. Masdar has also signed an agreement to acquire a stake in the UK’s proposed green hydrogen project, HyGreen Teesside.

The white paper also pointed to carbon capture and storage as an untapped opportunity for UAE-UK collaboration, describing it as “the best option for immediate emissions reduction” and urging the two countries to share expertise. 

The UK could learn from the UAE’s first iron and steel project to apply carbon capture to store its emissions onshore, the council said. Launched in 2016, the project by Emirates Steel now stores 800,000 tonnes of CO2 per year. 

The report also called on the countries to ramp up collaboration around deploying and investing in renewables within their own markets and elsewhere, building digital solutions for decarbonisation and aligning banking regulations for green finance. 

“Banks can play an increasingly important role by working with business and government to map out time horizons and scale up commercial opportunities,” the paper said. 

The council issued a warning about a shortage of skills in the clean and renewable energy sector in both countries, calling it a matter for “immediate concern”. The UK needs to grow its workforce in this area from 160,000 to 200,000 to meet industry demand, it said.

The UAE and the UK could reach out to young people in both markets and share expertise on the transferability of oil and gas sector skills, in order to address this challenge.