UAE softens on fossil fuel wording, observers say

Reuters/Dominika Zarzycka

• ‘Phase-out’, ‘phase-down’ or nothing
• Saudi Arabia against phase-out
• UAE considering it in ‘easy-to-abate’ sectors

The UAE, one of the world’s largest oil producers, is considering supporting an unprecedented agreement towards ‘phasing out’ fossil fuels, observers have told AGBI.

Some suggest the parties may agree to a phase-out in easier-to-abate sectors such as power generation, where reducing greenhouse gas emissions can be achieved with existing renewable technologies like solar or wind power and at relatively lower costs.

As Cop28 moves into its second week the focus continues on the ongoing global stocktake (GST) negotiations, a crucial element in reshaping global energy policies.

The UN climate agency published a new iteration of the GST late on Friday, which featured additional options for the future of fossil fuel use, which remains a contentious topic.

The draft text, which is still under negotiation, included options for a “phase out of fossil fuels in line with best available science” and “phasing out of fossil fuels in line with best available science, the Intergovernmental Panel on Climate Change’s 1.5 pathways and the principles and provisions of the Paris Agreement”.

The other possible two compromises employ phrases like “phase-out of unabated fossil fuels”, a term that omits reference to production, reflecting the dance between environmental priorities and economic realities.

It also includes a ‘no text’ option, which means that it could be omitted altogether.

“Saudi Arabia and the Arab Group have come out in very strong opposition to any energy package including fossil fuel phase-out,” said Natalie Jones, policy advisor at the International Institute for Sustainable Development (IISD) think tank.

“In contrast, we have heard from the UAE presidency that they are open to a final agreement on fossil fuel phase-out. The presidency certainly wants a positive news story at the end of Cop, and it’s very clear that fossil fuel phase-out will be the defining success or failure of Cop28.”

The Arab Group is a negotiating bloc representing the 22 member states of the Arab League. However, each member can take their own position on issues.

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A Cop28 spokesperson told AGBI: “The role of the Cop28 presidency is to convene the parties, to raise their collective ambition and allow them to deliver a robust agreement in response to the  global stocktake that keeps 1.5C within reach. 

“We expect everyone to come to Cop ready to commit to meaningful and ambitious climate action, and it is up to the parties to achieve that outcome.

Jones said Saudi Arabia has opposed the entire energy package draft text and also specifically opposed fossil fuel phase out, while calling for a new option on “a necessary scale up of all the solutions, without cherry picking”.

“This is code for supporting carbon capture and storage, blue hydrogen and fossil gas,” she said.

Oman opposed sector specific mitigation targets and called for a “balanced approach” to mitigation “based on emissions reductions” and recognising countries’ national circumstances, she added.

Russia, China and Iraq proposed adding text on “natural gas as a transition fuel,” but Jones added that research by her organisation suggests “gas isn’t a bridge, but a wall”, impeding rather than enabling the energy transition.

She said that China emphasised “the important role of fossil fuels in socioeconomic development” including for “reliability and affordability”.

Jones called the new draft an “improvement” as it “captures more of parties’ views, and contains several interesting options for potential bridging”.

However, she noted that the text is missing language on international public support, including finance, for a just energy transition.

“There’s no way developing countries will accept an energy package without a support offer,” she said.

“For example, Iraq gets 99 percent of its public revenue from exporting oil and gas. It’s not the only country who will be devastated by the loss of income – even under current policy settings, let alone in a 1.5C world.”

Financial think tank Carbon Tracker’s ‘PetroStates of Decline’ report says that majority of petrostates could lose more than half of revenues under even a moderate energy transition.

The UAE, which relies on oil and gas for 40 percent of government income, could see production revenue 60 percent lower than expected. Saudi Arabia, the world’s biggest oil exporter, faces a similar challenge.

‘Anxiety’ around language

Avantika Goswami, programme manager for climate change at India’s Centre for Science and Environment, said including text on a global fossil fuel phase-out was a “positive development”.

But she noted that it is not yet accompanied by a clear timeline for this target, or differentiation of a schedule between developed and developing countries.

“There is anxiety around this language,” she said.

“A comment made by Saudi Arabia, in coordination with certain other blocs yesterday, talked about the ‘trauma’ of this particular paragraph.”

IISD’s Jones said Saudi Arabia made a plea to focus on adapting and limiting emissions, and insisted that socioeconomic impacts of response measures are a core concern for the Arab Group.

The kingdom called adaptation “a great preoccupation” for the state and said “infringements on the sovereignty of nations will not be tolerated”.

UAE considering ‘phase-out’

A negotiator who declined to be named, told AGBI that the final draft is likely to include text that will call for a fossil fuel phase-out but only in easier-to-abate sectors, with a fair timeline for oil and gas producers.

The Alliance of Small Island States has called for a moratorium on new oil and gas infrastructure.

“This is the first time any party or bloc has called for this on the floor,” IISD’s Jones said.

The High Ambition Coalition – which met on Thursday – has also clearly signalled it is making phase-out a key priority, she noted.

Jones said the minister pairings announced on Friday also “bodes well for the success” of a phase-out agreement, pointing to Denmark leading on the global stocktake. Denmark is the co-chair of the Beyond Oil and Gas Alliance, an alliance of governments committed to an ambitious and managed phase-out of oil and gas productions. 

The country’s minister of energy and climate Dan Jorgensen said on Friday: “We cannot negotiate with nature, but we can negotiate with each other. No argument, no political or economic reasoning, will stop the temperature from increasing.”