United Arab Emirates strengthens investments in the energy sector with a focus on low-carbon emissions
ADNOC is among the least carbon-intensive oil and gas producers globally
UAE President Sheikh Mohammed bin Zayed Al Nahyan on Wednesday unveiled XRG, a low-carbon energy and chemicals investment vehicle aimed at accelerating ADNOC Group's international growth and maximising its value.
The new venture, announced during ADNOC's annual meeting chaired by Sheikh Mohammed bin Zayed, will focus on investing in projects that address the world's growing demand for natural gas, chemicals and low-carbon energy. ‘XRG will build on ADNOC's achievements in the energy field and its strategic investments,’ Bin Zayed said, according to the official Emirates News Agency.
During the group's board meeting, Sheikh Mohammed bin Zayed highlighted ADNOC's crucial role as a key driver of the UAE's economic growth and diversification. He underlined the company's continued priority to generate greater value and provide new economic and industrial growth opportunities for the private sector.
The Council also instructed ADNOC to redouble its efforts in implementing its 2030 sustainability strategies, with the aim of consolidating its sector leadership and achieving climate neutrality by 2045.
ADNOC is among the lowest carbon-intensive oil and gas producers globally, and is committed to reducing greenhouse gas emissions from its operations by 25% by 2030, as well as achieving near-zero net methane emissions.
As part of its strategy to strengthen local industry, ADNOC - which seeks to compete with Saudi giant Aramco - is boosting domestic manufacturing of key products in the supply chain of its businesses and activities.
Since 2022, ADNOC has signed agreements with local and international companies worth a total of 19.6 billion dollars, with the aim of accelerating its goal of procuring 24.5 billion dollars worth of locally manufactured products as part of its ‘Made in the Emirates’ initiative by 2030.
During the annual board meeting, the company's plan to inject 54.5 billion dollars into the local economy over the next five years, through its programme to increase local content, was approved. This effort builds on the 15 billion dollars that ADNOC has already successfully redirected to the local economy by 2024.
The ‘ADNOC Programme to Enhance National Content’ has also helped create 5,500 job opportunities for Emirati nationals in the private sector this year, through collaboration with the Emirates Competitiveness Council (NAFES).
These developments bring the total value of funds redirected to the local economy since the launch of the programme in 2018 to 65.9 billion dollars, and the total number of citizens employed in the private sector to more than 17,000.
In addition, through its Ruwais low-carbon gas project, ADNOC is working to double its current production capacity of this essential resource in the UAE to 15 million tonnes per year.
This effort will be complemented by building a global, integrated portfolio of gas businesses through strategic investments in Egypt, the United States, Mozambique and Azerbaijan.
‘ADNOC continues to strengthen its key role as an engine of economic and industrial growth in the UAE, establishing itself as a reliable global energy provider,’ said Sultan Al Jaber, Minister of Industry and Advanced Technology, and ADNOC's CEO and Executive Director.
He also explained that this year the company has redoubled its efforts to ensure that its business evolves with the future, seizing new growth opportunities across the entire energy value chain and expanding globally, while accelerating the adoption of artificial intelligence-based tools and solutions.
The UAE has made significant progress in increasing the contribution of clean energy to its total energy mix, reaching more than 27.8% at the end of last year, on track for its 2030 target of 32%.
Last September, Suhail Al Mazrouei, Minister of Energy, highlighted that between 2019 and 2022, the country doubled its renewable energy capacity, as part of its strategy to triple installed capacity by the end of this decade.
‘We are committed to meeting all energy transformation targets, in line with the UAE's historic agreement at COP 28.’ said Al Mazrouei in remarks ahead of the launch of the World Utility Conference 2024. He further stressed that in 2023, the country experienced a remarkable 70% growth in installed renewable energy capacity, reaching 6.1 gigawatts.
The UAE has established itself as one of the world's leading consumers of solar energy, according to the Energy Institute's World Energy Statistical Review 2024.
The second largest Arab economy, after Saudi Arabia, has made significant strides in alternative energy competitiveness indicators, most notably jumping from sixth to second place in the per capita renewable energy consumption rate.
The government is actively encouraging investment in renewable energy by creating a favourable regulatory framework for investors, while advancing the implementation of the UAE Energy Strategy 2050.
According to the Ministry of Energy, the total value of renewable energy projects implemented to date exceeds 12.3 billion dollars, excluding new projects in operation.