Saudi Arabia's FII Forges New Frontiers In Global Energy Transition

The global energy transition was the first item on the agenda for the seventh edition of the Future Investment Initiative forum.

Saudi Arabia's FII Forges New Frontiers In Global Energy Transition

The global energy transition was the first item on the agenda for the seventh edition of the Future Investment Initiative forum. Saudi Arabia, propelled by its Vision 2030 reforms aimed at diversifying its economy beyond oil, is strategically engaging with emerging markets in Asia, such as South Korea and Japan, as well as African nations like Kenya, as potential hubs for the production and supply of clean energy, particularly hydrogen.

Ahead of the FII, Saudi Arabia and South Korea inked an impressive array of 46 corporate deals spanning economic, energy, and technological sectors. These agreements represent a monumental investment worth $30 billion with Korean enterprises.

Notable among these agreements is the pact between Korea National Oil and Saudi Aramco for a collaborative oil storage venture, while Korea Electric Power and steel giant Posco Holdings will partner with Aramco on an ambitious ammonia production endeavor.

Crucially, bilateral agreements culminated in the establishment of the Hydrogen Oasis Initiative, aimed at fostering cooperation in the realm of green and clean hydrogen. During a panel discussion titled “Remapping Korea’s Cooperation with the Middle East in a New Economic Era,” President Yoon Suk Yeol underscored the longstanding economic ties between Saudi Arabia and South Korea, emphasizing their shared journey towards industrialization.

President Yoon expressed, “We must join forces to respond to climate change.” He applauded Saudi Arabia’s green energy initiative and emphasized South Korea’s commitment to strengthening investments in this direction.

While fossil fuels still constitute 80 percent of global energy sources, forecasts project renewables to constitute 90 percent by 2050. Saudi Energy Minister Prince Abdulaziz bin Salman emphasized that hydrocarbons, including petrochemicals, remain integral to the energy transition. He pointed to substantial acquisitions by industry giants ExxonMobil and Chevron as evidence of the enduring relevance of hydrocarbons.

The pivotal shift in energy consumption patterns is evident. Emerging technologies in nuclear, solar, wind, and water energy are taking center stage, with solar and wind contributing 12 percent of global electricity in 2022.

Ember, a climate and energy think tank, posits that for net-zero emissions to be achieved, alternative energy sources must account for 41 percent of the world’s electricity by 2030.

Joseph McMonigle, Secretary-General of the International Energy Forum, stated, “Wind and solar get us about halfway to meeting our climate goals,” highlighting the pressing need for emerging technologies like CCUS (carbon capture, usage, and storage), hydrogen, and fusion.

Despite the challenges, Amin Nasser, CEO of Aramco, stressed the imperative to continue pursuing renewables, recognizing the diverse economic landscapes of different nations.

On the sidelines of the FII, Saudi delegates met with President William Ruto of Kenya. Bilateral relations were reviewed, and opportunities for collaborative efforts across various sectors were explored. President Ruto, during the panel “Africa’s Climate Positive Growth Agenda,” showcased Kenya’s leadership in sustainable practices, with 81 percent of the country’s electricity generated from low-carbon sources in 2021.

Ruto’s ambition to achieve 100 percent renewable power in Kenya by 2030 and to fuel green industries by 2040 underscores Africa’s potential in shaping a sustainable global future. With 40 percent of the world’s renewable energy resources, Africa’s urgent need for strategic climate financing is palpable.

Ruto affirms, “We are facing a climate catastrophe,” stressing the critical role of clean energy in alleviating the impacts of climate change. This shift towards renewable energy promises not only environmental benefits but also economic growth and development across the continent.

In summary, FII’s seventh edition heralds a new era of global collaboration in the energy transition, positioning Saudi Arabia and its partners as catalysts for a sustainable future.