Give private sector green incentives, says Sharjah oil CEO

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While the state-owned Sharjah National Oil Corporation plans to use its depleted fossil fuel resources to store carbon, its CEO believes that private companies are unlikely to follow Snoc’s green ambitions voluntarily, unless they are given incentives to act.

The innovation could help to halve the UAE’s carbon emissions, but the company is owned by the emirate’s government, and its CEO, Hatem Al Mosa, told AGBI: “Anywhere in the world, not everybody will abide to voluntarily incur cost to decarbonise unless the law enforces energy transition.”

Snoc has its own voluntary target of achieving net zero by 2032, 18 years ahead of the UAE’s national target of 2050 and 13 years ahead of the Abu Dhabi state oil company Adnoc’s target of 2045.

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Al Mosa said: “You see initiatives to reduce greenhouse gases from big national companies such as Adnoc and publicly traded companies, as shareholders put on pressure. Snoc is making changes and decarbonising voluntarily.”

However, Al Mosa said, private companies were unlikely to follow suit as they would always be motivated by their balance sheets: “Totally private companies may have a green agenda or not.”

For the region to meet its targets, he believed governments must take the lead and introduce taxes, fines or incentives.

The vast majority of the smaller players would not accept accountability unless regulations are introduced to force them to, Al Mosa said.

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Cornelius Matthes, CEO of Dii Desert Energy, an industry-led platform pioneering energy transition in the Middle East and North Africa, agreed that the industry needed binding targets and implementation roadmaps in order to make proper progress on the issue.

He said: “The biggest prerequisite would be to stop the fossil fuel subsidies that encourage the waste of energy and distort renewables business models.”

Matthes said he believed companies invested massive amounts of money in marketing to influence stakeholders, but fooling the world with “greenwashing” was becoming more difficult.

“We need to disincentivise all harmful emissions adequately, like in Europe with a carbon trade mechanism, where any polluter needs to buy the right to cause CO2 emissions,” he said. “It is important to introduce the CO2 price, even symbolic, like $5-10 per ton of CO2. This would create a business case to reduce emissions immediately.”

Carbon capture centre

The state-owned Snoc is one of the UAE’s ten leading oil and gas companies. Its decarbonisation plan includes turning the northern emirate’s depleted fossil fuel resources into a carbon capture and sequestration (CCS) project.

Its CCS project involves capturing the CO2 from local emitters in Sharjah and the neighbouring emirates, then transporting and sequestering it in a nearly depleted onshore gas field owned and operated by Snoc.

The company is conducting feasibility studies with Japan’s Sumitomo Corporation. It has selected an international offshore drilling company, SLB, for the studies. Snoc is also evaluating the various emitters across the northern Emirates to identify sources of CO2 and its possible capture and transportation. The company expects to develop and implement the CCS in three to five years’ time.

Al Mosa said that the carbon sink has a storage capacity of up to 5 trillion cubic feet and is located close to potential clients, including multiple large-scale industrial and power plants.

More than 50 percent of the UAE’s CO2 emissions, including those in Dubai, Fujairah and Sharjah, are located within 100 kilometres of the field, making transporting the CO2 much easier.

The reservoir could also be used to store the CO2 from the production of blue hydrogen, hydrogen generated from the steam reduction of natural gas.

Further innovations

Snoc also adopts renewable energy solutions, and plans to electrify its operations to reduce its gas consumption.

Earlier this month it appointed Emerge, a joint venture between the UAE’s Masdar and France’s EDF, to construct a 60MW solar plant at its Sajaa gas complex and cut 66,000 tonnes of CO2 annually.

The company has also stopped operational flaring and has been reporting on its greenhouse gas emissions internally.

However, Al Mosa said, “stopping flaring is not enough. There is so much to do by improving efficiency, like combining power plants from open to combined cycle, or installing efficient insulation in buildings to use less power.”

Sharif Salim Al Olama, the UAE’s undersecretary for energy and petroleum affairs in the energy and infrastructure ministry, told an energy conference in Fujairah earlier this month that the UAE industry will be held accountable for the decarbonisation of its activities.

He said the UAE had launched a supply management programme for four sectors, industry, transportation, buildings and agriculture. The target was a reduction of 40 percent in power consumption and 50 percent in water consumption, which would save the country around AED 226 billion by the year 2050.

Al Olama said: “In the industry sector, we have done a comprehensive study on the 50 biggest plants in the UAE and put ten recommendations on how they can improve their energy efficiency.”