Saudi Aramco CEO Amin Nasser speaks during the Saudi Green Initiative Forum in Riyadh, Saudi Arabia, October 23 2021. Picture: AHMED YOSRI/ REUTERS
I Saudi Aramco CEO Amin Nasser speaks during the Saudi Green Initiative Forum in Riyadh, Saudi Arabia, October 23 2021. Picture: AHMED YOSRI/ REUTERS

Saudi Aramco, the world’s biggest exporter of oil, set a goal of reaching net-zero emissions from its wholly owned operations by 2050.

The target excludes emissions from customers burning its crude, but is a decade sooner than a government timetable for the kingdom.

“We understand the goal will be complex and will have challenges, but we will meet them,” CEO Amin Nasser said at the Saudi Green Initiative conference in Riyadh on Saturday.

The pledge applies to emissions from the company’s own operations or from the generation of power and heat to its assets, classified as scope 1 and scope 2. It doesn’t apply to scope 3, which are generated by customers burning its fuels and make up more than 80% of the company’s total emissions.

“Scope 3 is the responsibility of end users, regulators, policymakers and governments around the world,” Nasser said. “We can influence that by working with auto manufacturers to reduce emissions through better engines. We’re looking at better fuel formulation, carbon capture, blue hydrogen, all of these things that will contribute to scope 3.”

While making the announcement about net-zero goals, Nasser expressed concern for the “fast” decline in global spare capacity — which he put at 3-million to 4-million barrels a day currently — due to the reopening of economies around the world. So, Saudi Aramco will keep investing in building crude production capacity.

Hydrocarbons in mix

“We are not abandoning our existing resources of energy,” Nasser said, adding that hydrocarbons will be part of the mix for decades to come. “It’s not contradictory at all.”

Hours earlier, the government said it will eliminate planet-warming emissions within its borders by 2060. That time frame parallels pledges by China and Russia but lags other large economies like the US, UK, and EU, which all aim to be net zero by 2050.

“This is a historical announcement,” Nasser said. “It will create the right platforms for Saudi Aramco and other entities in the kingdom to follow suit.”

Aramco’s net-zero commitment is similar to those made by European energy majors such as Royal Dutch Shell Plc and BP Plc, and puts Aramco ahead of U.S. firms Chevron Corp. and Exxon Mobil Corp.

Gas investments

Saudi Basic Industries Corporation, Aramco’s chemicals subsidiary, said at the same conference it would explore ways to be carbon neutral by 2050. Its CEO, Yousef al-Benyan, said he would cut greenhouse gas emissions by 30% by 2030.

As part of its plan, Saudi Aramco will make huge investments in gas over the next decade, Nasser said. That will help reduce the amount of crude it burns domestically.

Aramco also has ambitions in renewable sources of energy like solar, wind and hydrogen. Green hydrogen is produced using renewable power in a process with no emissions. Making blue hydrogen requires natural gas, with the carbon captured and stored.

Saudi Arabia aims to make 29-million tonnes of blue and green hydrogen annually by 2030, energy minister Prince Abdulaziz bin Salman said earlier.

“We’re confident that technology will get us to achieve our net-zero goal,” Nasser said. “What we need is an ordinary transition where we take into consideration reliability and energy security for the world.”

Bloomberg News. More stories like this are available on bloomberg.com

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