DUBAI: Rising geopolitical tensions, such as those in the Middle East, impact the global path toward net-zero emissions by driving up energy prices and straining global supply chains.
This is one of the findings of the World Economic Forum’s latest edition of the Net-Zero Industry Tracker, which tracks the progress of energy transition in eight sectors — steel, aluminum, cement, primary chemicals, oil and gas, aviation, shipping and trucking — that account for nearly 40 percent of global emissions.
The tracker “highlights opportunities and challenges to further accelerate GHG (greenhouse gas) emissions reductions in eight industrial and transport sectors that all play fundamental roles in driving global economic activity and connectivity, and in which reducing emissions can be challenging,” said Espen Mehlum, head of energy transition intelligence and regional acceleration at the Centre for Energy and Materials at WEF.
These eight sectors “achieved an impressive 0.9 percent reduction in absolute emissions from 2022 to 2023, compared to global energy-related emissions, which rose by 1.3 percent in the same period,” he told Arab News.
The current rate of progress, however, is not enough to meet net-zero targets. This will require an estimated $30 trillion in additional investments by 2050, with 57 percent coming from industries other than the eight mentioned in the report, as well as “good policies, technological progress and demand for green products,” said Mehlum.
The tracker highlights the role of data and artificial intelligence as powerful tools to support the transition to net zero.
The use of generative AI holds the potential to improve capital efficiency by 5-7 percent, reducing capital requirements by $1.5 trillion to $2 trillion in the eight sectors.
However, the tracker cautions against the excessive use of AI, which is expected to raise electricity demand.
The oil and gas sector represents 10 percent of global GHG emissions — the highest among the eight analyzed — and 14 percent of global carbon dioxide equivalent emissions.
Saudi Arabia was the second-most oil-producing country (12 percent) after the US (20 percent) in 2023.
The Kingdom also ranked second, followed by the UAE and Kuwait in third and fourth place, in terms of countries with the lowest CO2 emissions from oil production in 2022.
Methane emissions make up nearly half of all GHG emissions from oil and gas operations, so to achieve net zero in this sector, WEF suggests accelerating reductions in methane emissions, incentivizing these reductions, and increasing investments in electrification to help manage costs.
The report stressed the need for markets outside Europe and the US, which are already advanced, to ramp up efforts in scaling methane abatement policies.
It also spotlighted the importance of international collaborations such as the Oil and Gas Decarbonization Charter, a global industry charter dedicated to accelerating climate action within the industry, and the UAE-US Partnership for Accelerating Clean Energy.
