Circular carbon economy holds promise in battle against global warming

Saudi Arabia has embraced the circular carbon economy (CCE) enthusiastically, and is now playing a leading role in advancing a strategic plan to tackle one of the most serious issues the world faces today — the existential threat from climate change. (AFP/File Photo)
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Updated 26 July 2020
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Circular carbon economy holds promise in battle against global warming

  • Tech-neutral approach forms key part of KSA’s strategic plan to achieve sustainable development goals
  • CCE offers a potential path to slow down and even reverse the inexorable process of global warming

DUBAI: “Carbon is not the enemy,” said Prince Abdul Aziz bin Salman, Saudi Arabia’s energy minister, when he laid out the foundations of the strategy that the Kingdom believes can halt the planet’s apparently inexorable slide toward climate catastrophe.

Saudi Arabia cannot be credited with inventing the idea of the circular carbon economy (CCE), which grew out of a body of work by environmentally conscious economists and thinkers over the past few decades.

But the Kingdom has embraced the concept enthusiastically, and is now playing a leading role in advancing a strategic plan to tackle one of the most serious issues the world faces today — the existential threat from climate change — even as it wrestles with the immediate challenge of the COVID-19 pandemic.

Last year, at the Future Investment Initiative forum in Riyadh, Prince Abdul Aziz said: “Considering our pivotal role as a global energy producer, it is our responsibility to find a solution through innovation and collaboration to create a sustainable framework for growth.”

Since then, CCE has become a central plank of the Kingdom’s long-term energy thinking, embedded in policies and proposals from the think tanks of the G20 leaders’ organization as it prepares for the global summit in November, as well as in practical projects and initiatives by Saudi Aramco, the Kingdom’s energy giant, and other big mega-projects of the Vision 2030 reform strategy, such as Neom.

In essence, CCE is a masterplan to slow down and even, hopefully, reverse the apparently inexorable global warming caused by the emission of carbon materials into the atmosphere, identified by scientists as the main factor behind climate change.

CCE aims to help the world meet the targets set by the 2015 Paris Agreement on climate, to keep the rise in global temperatures to 2 degrees above pre-industrial levels, and even cut to 1.5 degrees, by reducing emissions from the carbon products that create harmful “greenhouse gases.”

It plans to do this by developing a “closed loop” system that effectively mimics nature’s own cycles, enhancing and augmenting the process by which harmful carbon materials are neutralized.

Adam Sieminski, president of the King Abdullah Petroleum Studies and Research Center (KAPSARC) in Riyadh, told Arab News: “The CCE is a holistic approach to carbon management that can guide international efforts toward a more inclusive, resilient, sustainable, and carbon‐neutral or net‐zero energy system.”

The term “net zero” is key here. Some radical environmental activists want the world to commit to “absolute zero” on carbon emissions. But the Saudi approach to CCE — as you would expect from the world’s leading oil producer — is to continue to exploit the undoubted benefits from carbon as a source of energy, while attempting to minimize the harmful side-effects.

FASTFACT

Circular Carbon Economy

CCE employs a technology-neutral approach to achieve energy market stability and responsible economic growth.

KAPSARC research distinguishes between different types of carbon within the economic process. “Living carbon” is a positively beneficial phenomenon, essential to human life and the process by which we have fresh foods, healthy forests, and fertile soil.

More problematic are “durable carbon” — where it is locked in stable solids such as fibers and plastics — and “fugitive carbon” which consists of gases like carbon dioxide and methane that are released into the environment by energy generation, transportation, and industrial cycles.

Core to the problem of dealing with the carbon situation are the “three Rs” — to reduce, reuse, and recycle carbon products that can pollute the world’s environment. These ideas are increasingly familiar to consumers the world over, in calls or more awareness of the use of plastic products, through the development of clean electric vehicles, right down to the bags at the supermarket checkout.

Saudi Arabia already has in place various programs that address these issues. There has been an energy efficiency program in place for nearly a decade, designed to help industry, transportation, and buildings optimize their use of energy. Phasing out of energy subsidies is also a crucial part of that plan.

The Kingdom also has well-developed and ambitious programs for renewable energy sources, such as wind and solar, as well as a strategy for civil nuclear power generation that is being steadily implemented, in accordance with international atomic power standards.

But on their own, the 3 Rs are unlikely to help the world meet the targets of the Paris Agreement. Saudi Arabia has emphasized a fourth R — remove — which is an altogether more ambitious proposition.

Energy expert Christof Ruehl, senior research fellow at the Center on Global Energy Policy at New York’s Columbia University, told Arab News: “The first three Rs are good general principles, but the fourth R, remove, is a significant technological and commercial challenge.”

Removing carbon via technology involves a process known as carbon capture, utilization, and storage (CCUS) which is a complicated and expensive business.

Another energy expert agreed that implementing CCUS was an essential but challenging goal.

Robin Mills, chief executive of consultancy Qamar Energy, said: “The technologies for reusing carbon are limited in scale, costly and/or technologically immature. However, a major scale-up of carbon capture, carbon use or storage, and direct capture from the air, are all essential parts of decarbonizing the Saudi economy in the longer term and keeping its fossil-fuel resources viable.”

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The Kingdom already operates the largest CCUS plant in the world. Neom, the gigantic mega-city being planned in the north east of the Kingdom, has declared it will be the world’s biggest carbon-free hub, and is working on plans for environmentally friendly water desalination in addition to a big program of renewables and the use of “green hydrogen” as fuel.

Saudi Aramco, which is one of the leading global investors in clean energy techniques, is working actively on developing processes in its oil drilling, refining, and transportation.

It already uses carbon-capture technology to extract CO2 from the industrial process, employing it to maintain pressure in oil reservoirs and for enhanced oil recovery.

Aramco crude is recognized as among the cleanest in the world thanks to low carbon intensity and efficient refining processes, in comparison with its international peer group.

Industrial and technological developments such as these will contribute to reducing emissions of greenhouse gases and slowing the pace of global warming. But, the experts agree, there will also have to be a serious effort to reduce use of carbon fuels if the Paris Agreements are to be met.




This picture taken on December 11, 2019 shows a view of Jubail Desalination Plant at the Jubail Industrial City, about 95 kilometers north of Dammam in Saudi Arabia's eastern province overlooking the Gulf. (AFP)

Ruehl said: “There are technologies out there, but none works on the scale necessary to make a serious dent in global levels of emissions. So, you need a means — either via regulation, tax, or a market mechanism — that incentivizes carbon emitters to reduce their output. But this has proved to be very difficult to organize on a global level.”

The European authorities tried to put in place a carbon-trading system that would allow industrial producers to buy and sell the right to produce carbon, but it fell victim to market manipulation and corruption. Other schemes suffered similar challenges.

Prince Abdul Aziz said recently that Saudi Arabia would soon announce its own carbon-trading strategy to address these vulnerabilities, stressing the commercial benefits of such a plan.

“Carbon is a resource. It is not something that we should just throw and just emit it. Actually, capturing it lets us make money out of it,” he said.

Such a project would bring its own advantages, Ruehl agreed. “For KSA, which is a comparatively ‘clean’ oil producer, it would be a competitive advantage over other oil producers if an effective carbon market could be set up,” he said.

Carbon is not an enemy. But it will take a lot of ingenuity and global co-operation to turn it into a committed ally. The hope must be that the experience hard won during the pandemic will help forge that collaboration once the virus is conquered.

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Twitter: @frankanedubai

 


Europe to launch chamber of commerce in Riyadh

Updated 55 min 51 sec ago
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Europe to launch chamber of commerce in Riyadh

RIYADH: The first European Chamber of Commerce in the Gulf region will open next week in Riyadh, the EU’s special representative for the Gulf region has told Arab News.

Luigi Di Maio said the new body would bring Saudi and European companies together to enhance trade and cooperation.

“We’ve worked very hard with the Ministry of Investment, your Ministry of Trade. The EU delegation in Riyadh did a great job. And now we are going to inaugurate this chamber,” Di Maio said.

“That is in order to bring closer our companies, Saudi companies and European companies, to take on both sides the new opportunities of the Vision 2030 program … of our new European Green Deal, Next Generation EU, and others.”

Saudi Arabia’s Vision 2030 reform program had transformed the global business community’s view of the Kingdom, Di Maio said. “The ambitions, especially economic ambitions, of Saudi Arabia are totally changing perceptions of the Kingdom around the world,” he said. “There is a business community that is more and more interested in these ambitions, in this vision, and in a new generation of dreamers in this country.”

There was a growing recognition of the Kingdom’s diplomatic and economic influence, Di Maio said. “Saudi Arabia is becoming more and more the point of reference because now it is implementing its vision for the region that is not just an economic ambition, but is a new policy and new initiatives in order to de-escalate, to make the region in peace and wind down on tensions like the tension that we are experiencing now.

“The partnership and the strategic partnership between the EU and GCC countries, in particular with countries like Saudi Arabia, is vital.”


Red Sea Global offers more than 50 leisure activities: top official

Updated 30 April 2024
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Red Sea Global offers more than 50 leisure activities: top official

RIYADH: Contrary to popular conception, sporting activities provided in the Red Sea and AMAALA are not just confined to water, but these destinations offer exciting leisure choices on land as well, said a top official. 

Speaking to Arab News at the Future Hospitality Summit, Oliver Wood, senior director of Destination Development at Red Sea Global, said the destination currently offers more than 50 activities for visitors. 

Wood said that RSG created three business entities last year — Galaxea, WAMA, and Akun. 

Galaxea provides diving experiences to visitors, while WAMA and Akun offer water activities and adventure sports respectively. 

“Galaxea is a coral that’s endemic to the Red Sea. It looks like, a kind of submarine galaxy that sits below a constellation and is beautiful. Then we created WAMA which is a way for water. And then we created Akun, which to us, is obviously ‘to be’ in the moment, start when you stand, breathe, leave everything behind,” said Wood. 

He added: “So, all three of these businesses work together to do something that will reduce the misconceived fact that we are just water. We are land as well. In fact, similar to our surroundings, our land was created by water. Fifty million years ago, the sea was 120 km inland and 200 m higher. So we’re finding dinosaur bones. We’ve got petroglyphs, we’ve got ancient trade routes.” 

According to Wood, some of the land activities offered in the Red Sea and AMAALA destinations include biking and hiking, with RSG recently delivering electric fat bikes for visitors. 

“So for us, it’s about taking you out hiking. It’s taking you biking, supercool Akun electric fat bikes that we just got delivered. So, you can go sand, and gravel wherever you want. It’s about climbing to the top of our mountains,” he added. 

The RSG executive also lauded the efforts of the Saudi Sailing Federation and the Saudi Water Sports and Diving Federation in promoting water sports in the Kingdom. 

“The Saudi Sailing Federation, Saudi Water Sports and Diving Federation, they’re bringing this sport to the forefront. So, together we’ve created this blueprint so that you have more Saudis in the water, more tourists that are going in the water,” he noted. 

Wood said that the availability of e-foils is one of the major attractions in the destination. 

“E-foils is a surfboard that’s electrified, has this fin in the middle that pushes you above the water, so you glide through it without any friction. That is one of the most popular things we do. It is really good fun,” said Wood. 

He added: “You can kayak through mangroves. And, then below the water is incredible. It’s one of the most well-preserved reefs in the world, and we’re very lucky to be working with KAUST on the scientific side.” 

According to Wood, Galaxea is not just a diving brand, but it will allow visitors to understand the beauty and value of nature. 

“There are lots of rare and endangered species beneath the water and it’s just incredible. It is a beautiful experience that allows you to reset your mind and just have a beautiful time in the Red Sea,” said the RSG official. 

He revealed that RSG brand Corallium, which is a marine life institute, will help travelers understand more about protecting, preserving, and supporting water ecosystems. 

Wood added that Corallium would also help divers communicate with experts in real-time, as they enjoy the beauty of the marine world. 

According to the RSG website, Corallium can host 650 people at one time, and guests will be able to walk underwater, snorkel with rare species, participate in lab tours as well as dive into the depths of the Red Sea in a submarine. 

“So as a diver, so you go snorkeling, you’re kind of shut off from it and experiencing it. Then you can speak to somebody afterward and understand.

 “We try and extend that a bit further. you actually get to go out in these experiences and dive with a full face mask, communicating in real-time, under the water with our team,” he noted. 

Wood also revealed that RSG has plans to create a scuba spa, where people can enjoy the silence in water. 

Talking about the multiple options available for travelers in the Red Sea, he said: “You can be in the middle of desert dunes, you can be out in granite mountains. You can even go down to volcanoes. We have incredible volcanic lava fields that sit close to us. And then you can be in the water. You can be in front of 600-year-old pillars of coral reef. You can go through caves into the water.” 

Wood also hinted that RSG is working toward offering Red Sea and AMAALA destinations to people who fall both in the luxury class and the middle range. 

“We’re trying to show generosity in the value that we offer everybody there. We’ve tried to not only benchmark globally but try and push it right down so it is accessible to everybody and so that everybody can come and really enjoy it,” said Wood. 

He added: “For me, it’s about building things around that enable people to come and get involved with it. So there are all sorts of things that we’re working on right now that will be revealed and are coming up.” 


BlackRock, PIF launch multi-asset investment management platform in Riyadh

Updated 30 April 2024
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BlackRock, PIF launch multi-asset investment management platform in Riyadh

  • First-of-its kind partnership aligns with PIF’s initiatives to drive further growth of the Saudi capital markets ecosystem, sector
  • It will be anchored by an initial investment mandate of up to $5bn from PIF

RIYADH: BlackRock Saudi Arabia and the Public Investment Fund signed a memorandum of understanding on Tuesday which entitles the former to establish a Riyadh-based multi-asset investment platform.
It will be anchored by an initial investment mandate of up to $5 billion from PIF, subject to the achievement of agreed milestones between the parties, said a media statement.
Both parties have expressed the intention to establish BlackRock Riyadh Investment Management, which will encompass investment strategies across a range of asset classes. It is expected to be managed by a Riyadh-based portfolio management team and supported by BlackRock’s global asset management platform.
Larry Fink, BlackRock’s CEO, said: “We are excited to build on the deep partnership we have developed with PIF over many years to launch this first-of-its-kind international investment management platform in Saudi Arabia.
“The continued growth of the Kingdom’s capital markets, and diversification of its financial sector, will contribute to future prosperity for its citizens, the competitiveness of its companies and the resilience of its economy.”
Saudi Arabia has become an increasingly attractive destination for international investment as Vision 2030 comes to life, according to Fink.
He added: “We are pleased to offer investors from around the world the opportunity to take part in this exciting, long-term opportunity.”
Yazeed Al-Humied, PIF’s deputy governor and head of MENA (Middle East and North Africa) Investments, said: “PIF’s relationship with BlackRock is well established and growing. This new landmark agreement represents a step forward in PIF’s work in making the Saudi investment and asset management market more internationally diverse and more dynamic.”
As Saudi Arabia continues to transform its economy, BRIM will seek to support foreign institutional investment into the Kingdom and further enhance the Saudi asset management industry, broadening local capital markets while driving investor diversification across asset classes, facilitating knowledge sharing and the development of Saudi-based asset management talent.
BRIM will be fully integrated with BlackRock’s investment capabilities and operating platform, benefiting from global market expertise.
The non-binding memorandum is subject to satisfying certain necessary conditions, regulatory approvals, and fulfilling specified milestones.


Hospitality brands sign deals to expand in Saudi market

Updated 30 April 2024
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Hospitality brands sign deals to expand in Saudi market

RIYADH: Top hospitality brands signed deals at the Future Hospitality Summit in Riyadh to capitalize on the opportunities available in the Kingdom.

France-based Accor Group said it will strengthen its position in the Kingdom with the addition of more than 25,000 rooms and the launch of a wide variety of brands.

The global hospitality group also recently launched Accor One Living, an initiative offering specialized knowledge in mixed-use and branded residential development.

Ladun Investment Co. signed an agreement with Cheval Collection. The partnership encompasses multiple contracts for the construction and operation of Cheval Ladun Living, which is a hotel apartment tower located on King Fahd Road, near the King Abdullah Financial Center in Riyadh.

The deal represents Cheval Collection’s inaugural project in Saudi Arabia, featuring 130 residential units of varying sizes, from one to three rooms, alongside amenities like a gym, a swimming pool, and a sauna.

The project’s construction is scheduled to begin this year and will be completed in 2027.

Marriott International, Inc. and Al Qimmah Hospitality, a subsidiary of BinDawood Trading, signed an agreement to bring the JW Marriott brand to Jeddah.

Located on the Jeddah Corniche, the hotel is expected to become a prime destination for luxury-seeking travelers who desire a waterfront escape.

“The signing of JW Marriott Hotel Jeddah continues to reflect the strong growth opportunities for our luxury brands across the Kingdom. As part of the country’s Vision 2030 framework, Jeddah continues to build itself as a leisure and business destination,” Chadi Hauch, regional vice president of Marriott International, development of the Middle East, said in a press statement.

On behalf of Al Qimmah Hospitality, Abdul Razzaq BinDawood commented: “We will leverage our expertise and experience in the retail and hospitality sectors to make JW Marriott Hotel Jeddah a successful addition to the city’s landscape.” 

Baheej Tourism Development Co., a joint venture between ASFAR, the Saudi tourism investment company owned by the Public Investment Fund, and the Tamimi-AWN Alliance, signed a deal with Kerten Hospitality.

The agreement grants Kerten Hospitality management of Baheej’s hotel in Yanbu under the premium Cloud 7 brand.

Cloud 7 is an innovative hotel and residential lifestyle brand, recognized for its designs, check-in lobbies, healthy food options, and retail boutiques.

“Baheej’s collaboration with Kerten Hospitality underlines our core principle: empowering partners and subsidiaries through our expansive network,” Fahad bin Mushayt, CEO of ASFAR said.

The PIF-owned company also signed agreements with Mantis and KMC to manage the operations of Al Baha Mountain Lodge & Adventure Park.


Cashless payments in Saudi Arabia to rise by 7.6% in 2024

Updated 30 April 2024
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Cashless payments in Saudi Arabia to rise by 7.6% in 2024

RIYADH: Cashless payments in Saudi Arabia are expected to surge by 7.6 percent in 2024 to SR550 billion ($146.8 billion) as compared to SR511.5 billion the previous year, a report said.

The report issued by GlobalData, a London-based data analytics and consulting company, projected the Saudi card payments market to grow at an annual rate of 6.4 percent between 2024 and 2028 to reach SR705.2 billion. 

The uptick comes amid the Saudi government’s push for a cashless society by encouraging consumers to switch to cards for financial transactions.

“While cash has traditionally been a preferred method of payment in Saudi Arabia, its usage is on the decline in line with the rising consumer preference for electronic payments,” said Ravi Sharma, a lead banking and payments analyst at GlobalData. 

He added: “The country has a robust digital payment infrastructure, supported by a developing card market and a well-established card acceptance infrastructure.” 

Sharma further noted that Saudi Arabia’s government is taking effective steps to enhance the infrastructure in the country by encouraging merchants to adopt at least one electronic payment option apart from cash. 

The report, however, added that cash remains an integral part of the Saudi consumer payments landscape, particularly for lower-value transactions, but the usage of hard currency is showing signs of decline. 

Promoting digital payments is crucial for Saudi Arabia, as the Kingdom’s Vision 2030 aims to reduce cash transactions and increase the share of electronic payments to 70 percent of all transactions by 2025.

“The (COVID-19) pandemic changed the way Saudi consumers make payments, with an increasing number of consumers preferring contactless payments,” said Sharma. 

He added: “Contactless cards have been on the rise in the country with the Saudi Arabian central bank reporting 363.4 million transactions using NFC-enabled mada cards in February 2024 compared to 331.7 million in February 2023.” 

In terms of card preference, debit cards dominate the overall card payment space, accounting for 85 percent of the overall card payment value in 2023. 

GlobalData pointed out that the government’s financial inclusion initiatives, consumers’ preference for debt-free payments, and prudent consumer spending have resulted in the domination of debit cards in the Kingdom. 

“Saudi consumers are gradually embracing electronic payments, moving away from cash, supported by government push, improvements in payment infrastructure, growing consumer awareness, and rising adoption of newer technology like contactless,” added Sharma. 

In April, data released by the Saudi Central Bank revealed that payments made through point-of-sale terminals in the Kingdom experienced a significant 20 percent annual increase in February, totaling SR53.72 billion. 

The largest portion of POS spending in February was allocated to beverages and food, comprising 15.7 percent or SR8.43 billion. 

This was followed by spending on restaurants and cafes, accounting for 15 percent of the total, reaching SR8.02 billion.