meed-logo

line1 line2 line3
SIGN IN / REGISTER

Gulf can defy doubters and lead way to net zero

4 November 2022

Climate change is reshaping political discourse around the world and shifting the priorities of institutional investors. This, in turn, is spurring businesses to prioritise the climate agenda.

The issue is of particular significance to the Gulf. The region is characterised by an extreme climate and multiple vulnerabilities in the face of climate change. Its status as a leading hydrocarbons producer means the evolving climate is acutely relevant.

If the global discourse is shifting, so is the Gulf's policy agenda. The UAE has committed to a net-zero deadline of 2050, while Bahrain and Saudi Arabia are targeting 2060.

The new commitments are reflected in a growing array of formal policies, revealing a heightened sense of purpose behind the climate change agenda. For instance, Saudi Aramco recently announced a $1.5bn sustainability fund. The Saudi Green Initiative is expected to facilitate some $190bn-worth of sustainable investments by 2030. Saudi Aramco has pledged carbon neutrality by 2050.

Despite persistent scepticism, this promises to open up multiple opportunities for the Gulf region to show global leadership in this area

Leadership potential

The true strategic potential of addressing climate change comes not just from increased environmental sustainability, but also from the fact that investments in this area are powerful drivers of economic diversification. Despite persistent scepticism, this promises to open up multiple opportunities for the Gulf region to show global leadership in this area. 

Fiscal reforms and more stringent standards region-wide are reducing waste, curbing consumption, and incentivising investments in energy efficiency and alternatives. This has fuelled the popularity of district cooling and distributed solar power, while incentivising consumers to track their consumption and seek savings.

A rapidly growing range of energy-efficiency solutions is appearing in the markets. The region’s brisk population growth, economic diversification drive and continued infrastructure development create an opportunity to introduce smart buildings and energy-efficient urban planning.

Initiatives such as Abu Dhabi's Masdar City and Saudi Arabia's Neom are harbingers of a different future. Green taxes can play a role in the fiscal overhaul of regional economies. Apart from generating revenues and expanding the tax base, they can be used to incentivise sustainability and reduce waste. 

The Gulf is exceptionally well suited for photovoltaic (PV) generation. It is estimated that covering just 1 per cent of the region with solar installations could deliver almost 500GW of capacity.

Regional solar farms have broken one efficiency record after another, and a growing range of funding solutions is fuelling further progress.

All regional governments have formal targets for renewable power generation. Saudi Arabia, for example, plans to generate half of its electricity from renewable sources by 2030.

Solar energy is also central to the production of green hydrogen – increasingly viewed as necessary to achieve global decarbonisation targets. The Gulf is well-positioned to assume a position of global leadership and excellence in this area, which serves as an important driver of investment and export diversification.

Similarly, plans to connect the GCC power grid to neighbouring countries and potentially beyond create a real prospect of being able to sell power to countries with different consumption profiles. 

Regional countries face a complex set of challenges linked to temperatures, water, population and adaptive capacity. Read more here
Plentiful prospects

Other opportunities abound. For years, Saudi Arabia has led in exploring and developing new ways to create value out of hydrocarbons by turning them into chemicals. Fertiliser production is likely to require hydrocarbons for a long time to come.

Substantial future opportunities for innovation exist in this area, and could open up new opportunities for future-proofing the region’s most important natural resource endowments.

Innovation is also needed to develop materials and other solutions for a warmer world, an area of immediate importance for the Gulf. These realities entail multiple opportunities for innovation that can allow the Gulf to build excellence in know-how and localised production. 

Even as the Gulf countries channel more capital into sustainability, they also have a broader responsibility to help the world navigate the ongoing energy transition.

Oil and gas will be consumed for decades to come, which entails a growing premium on extracting them efficiently and with as little adverse environmental impact as possible. Natural gas adoption will, in many cases, be an important step toward reducing emissions and is likely to be instrumental in reducing the world’s reliance on more polluting energy sources.

The Gulf countries can drive the process thanks to their low cost of extraction, efficient infrastructure and strategic location. A growing number of circular carbon economy initiatives can help counter the negative effects of hydrocarbon production through carbon capture and sequestration by pumping it into oil fields or using it in chemicals production. 

Taking climate change seriously represents an important opportunity for the Gulf economies as they build their economic futures on diversification, efficiency and connectivity.

This is an area with plentiful opportunities for investment and diversification and offers numerous avenues for localising productive capacity and supporting the region’s ambitions to develop knowledge-based economies.

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10260102/main2139.gif

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Dewa announces new record for power reliability

    30 April 2026

    Dubai Electricity & Water Authority (Dewa) has announced that it set a new world record for the lowest electricity customer minutes lost (CML), at 0.82 minutes a year in 2025.

    The figure is equivalent to about 49 seconds of annual outage per customer. It improves on the utility’s previous record of 0.94 minutes in 2024, a reduction of around 13%.

    Dewa said it has reduced CML in Dubai from 6.88 minutes a year in 2012 to 0.82 minutes in 2025, significantly lower than the average of about 15 minutes recorded by leading electricity utilities in the European Union.

    The smart grid is a central component of Dewa’s strategy to improve reliability and efficiency. The programme is being implemented with total investments of AED7bn up to 2035.

    One of the key initiatives of the programme is the Automatic Smart Grid Restoration System, which enables remote, round-the-clock control and monitoring.

    Dewa currently has tenders out for several power and water infrastructure projects in the emirate. These include at least four Glass Reinforced Epoxy (GRE) water transmission pipeline projects.

    According to regional projects tracker MEED Projects, Dewa awarded $1.1bn-worth of new power and water contracts in 2025. Contract awards had previously reached $2.6bn in 2024, and $4bn in 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16623721/main.jpg
    Mark Dowdall
  • Riyadh tenders PMC deal for major sports arena

    30 April 2026

     

    Saudi Arabia’s Sports Boulevard Foundation has tendered a contract inviting firms to bid for project management consultancy (PMC) services for the Global Sports Tower in the Athletics District of the Sports Boulevard development in Riyadh.

    The tender was issued on 8 April, with a bid submission deadline of 10 May.

    The 130-metre-tall Global Sports Tower will cover an area of 84,000 square metres and will include more than 30 sports facilities. The tower will feature the world’s tallest indoor climbing wall at 98 metres and a 250-metre running track.

    Earlier this week, MEED reported that the Sports Boulevard Foundation is preparing to award the main construction contract for the Global Sports Tower. MEED understands that bid evaluation has reached an advanced stage and the contract is likely to be awarded by the end of May.

    MEED reported in May last year that design work on the tower had been completed. Saudi Arabia’s Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud approved the designs in 2024.

    The Sports Boulevard development runs across Riyadh from east to west and, once complete, is set to be the world’s longest park spanning more than 135 kilometres.

    The development will be spread across several districts, including Wadi Hanifah, Arts, Urban Wadi, Entertainment, Athletics and Eco, as well as Sands Sports Park.

    The large-scale project aims to transform central Riyadh – currently dominated by major highways – into a recreational corridor.

    Sports Boulevard, which will feature 4.4 million sq m of public realm and landmark buildings, will also be home to the Centre for Cinematic Arts and a 2,000-seat amphitheatre.

    The development will provide more than 2.3 million sq m of mixed-use commercial, residential, and retail assets, along with sports facilities around the park, known as Linear Park.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16622287/main.jpeg
    Yasir Iqbal
  • Contractors submit Saudi Arabia phosphate rail track bids

    30 April 2026

     

    Saudi Arabian Railways (SAR) received bids from contractors on 27 April for a multibillion-riyal tender to double the tracks on the existing phosphate transport railway network connecting the Waad Al-Shamal mines to Ras Al-Khair in the kingdom’s Eastern Province.

    The tender – covering the second section of the track-doubling works and spanning more than 150 kilometres (km) – was issued on 9 February.

    This follows SAR receiving bids on 1 February for the project’s first phase, which spans about 100km from the AZ1/Nariyah Yard to Ras Al-Khair.

    The scope includes track doubling, alignment modifications, new utility bridges, culvert widening and hydrological structures, as well as the conversion of the AZ1 siding into a mainline track. It also includes support for signalling and telecommunications systems.

    The tender notice was issued in late November.

    Switzerland-based engineering firm ARX is the project consultant.

    MEED understands that these two packages are the first of four that SAR is expected to tender for the phosphate railway line. Other packages anticipated to be tendered shortly include the depot and systems packages.

    In 2023, MEED reported that SAR was planning two projects to increase its freight capacity, including an estimated SR4.2bn ($1.1bn) project to install a second track along the North Train Freight Line and construct three new freight yards.

    Formerly known as the North-South Railway, the North Train is a 1,550km-long freight line running from the phosphate and bauxite mines in the far north of the kingdom to the Al-Baithah junction. There, it diverges into a line southward to Riyadh and a second line running east to downstream fertiliser production and alumina refining facilities at Ras Al-Khair on the Gulf coast.

    Adding a second track and the freight yards will significantly increase the network’s cargo-carrying capacity and facilitate increased industrial production. Project implementation is expected to take four years.

    State-owned SAR is also considering increasing the localisation of railway materials and equipment, including the construction of a cement sleeper manufacturing facility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16622526/main.jpg
    Yasir Iqbal
  • Iraq sets up commission for $5bn pipeline project

    30 April 2026

    Iraq is setting up a high-level commission to oversee the development of the planned $5bn Basra-Haditha crude oil pipeline project.

    The decision was made at a meeting held on 26 April, attended by Prime Minister Mohammed Shia Al-Sudani and the Minister of Petroleum Hayyan Abdul Ghani Al-Sawad, as well as other officials and consultants.

    The commission will be chaired by the undersecretary of the Oil Ministry and include advisers to the prime minister, along with director-generals from the Oil Ministry and the Industry & Minerals Ministry.

    Al-Sudani said the pipeline project will increase flexibility in transporting crude oil to the Turkish port of Ceyhan, as well as the Syrian port of Baniyas and Jordan’s port of Aqaba.

    The pipeline is also expected to strengthen supply to refineries in central and northern Iraq and support higher domestic refining output.

    The meeting also approved allocating $1.5bn to the project this year, with funding provided through the Iraq-China oil-for-infrastructure mechanism, according to a statement issued by the Petroleum Ministry.

    Earlier this month, Iraq’s Council of Ministers approved amendments allowing the Oil Ministry to directly invite specialised companies to bid for the 685-kilometre pipeline.

    The pipeline is expected to have a capacity of up to 2.25 million barrels a day.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16621546/main.jpg
    Wil Crisp
  • Construction begins on Dubai Healthcare City projects

    30 April 2026

    Dubai Healthcare City Authority (DHCA) has begun construction on Pixel DHCC and Ibn Sina+, two flagship developments in Dubai Healthcare City.

    Local contractor International Foundation Group has been appointed to carry out the enabling works.

    The two projects form part of Phase 1 of DHCA’s AED1.3bn ($354m) development programme and are scheduled for completion in November 2027.

    Pixel DHCC, designed by Hong Kong-based P&T Architects and Engineers, is planned as Dubai Healthcare City’s first LEED Platinum-certified office building. The nine-storey commercial development will cover 13,000 sq m.

    Ibn Sina+, designed by Dubai’s Design and Architecture Bureau, will be a five-storey medical complex spanning 5,800 sq m.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16611156/main.jpg
    Yasir Iqbal