Adnoc board boosts budget allocation for decarbonisation projects to $23bn

This will include investments to expand the company’s domestic and international carbon management platforms

President Sheikh Mohamed presided over the annual meeting of the Adnoc board. Photo: Abu Dhabi Media Office
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Adnoc’s board has increased its budget allocation for decarbonisation projects, technology and lower-carbon solutions to $23 billion, up from the previously earmarked amount of $15 billion.

The decision was made after the annual meeting of the Adnoc board, which was presided by President Sheikh Mohamed.

The increased allocation will include investments to grow the company’s domestic and international carbon management platforms, it said.

During the meeting, Sheikh Mohamed directed Adnoc to grow its diversified portfolio and provide secure, reliable and responsible energy to support the delivery of a just, orderly and equitable global energy transition, Abu Dhabi Media Office said.

The continued focus on decarbonisation underlines the UAE’s long-term commitment to supporting global energy security and enabling a more sustainable future, Sheikh Mohamed added.

“Adnoc continues to deliver on its mandate to transform, decarbonise and future-proof its business,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.

“As a leading global energy provider, we are committed to enabling a lower-carbon future and a just, orderly and equitable energy transition.

“By prioritising transformational growth, partnerships, and international opportunities, we are well positioned to grow our operations and unlock additional value, as we strive to make today’s energy cleaner.”

The company also plans to double its carbon capture and storage capacity target to 10 million tonnes per year by 2030, which is equal to removing more than two million petrol-powered cars from motorways.

Last year, Adnoc revised its net-zero target to 2045 from 2050 and said it aimed to reach zero methane emissions by the end of this decade.

Adnoc's decarbonisation projects aimed at meeting its 25 per cent reduction in carbon intensity by 2030 include the use of clean energy to provide 100 per cent of its onshore grid electricity needs since the start of 2022 and the linking of its offshore operations to the grid through a $3.8 billion project that, when completed, can halve its offshore carbon footprint.

At Cop28 last month, 50 oil and gas companies, including Adnoc and Saudi Aramco, signed the Oil and Gas Decarbonisation Charter, which calls for net zero emissions by 2050 or before.

They will also aim for “near-zero” upstream methane emissions and zero routine flaring by 2030.

The UAE, the Arab world's second-largest economy, plans to invest Dh200 billion ($54 billion) over the next six years in the renewable energy sector as part of an updated energy strategy.

In November, Abu Dhabi inaugurated the two-gigawatt Al Dhafra solar power plant, one of the world's largest solar projects.

It will power 200,000 homes and is expected to reduce the emirate's carbon dioxide emissions by more than 2.4 million tonnes a year, equivalent to removing about 470,000 cars from the road.

The project was developed by Abu Dhabi National Energy Company, better known as Taqa, in partnership with clean energy company Masdar, France’s EDF Renewables and China's JinkoPower.

Mega solar power plant is inaugurated in Abu Dhabi

Mega solar power plant is inaugurated in Abu Dhabi

Last year, the UAE also launched its first wind programme, with Masdar announcing a 103.5-megawatt wind project across four locations in Abu Dhabi.

The project is expected to power more than 23,000 homes a year, displacing 120,000 tonnes of carbon dioxide.

Adnoc is a shareholder in Masdar, which is working towards a renewable energy portfolio capacity of at least 100 gigawatts by 2030 and an annual green hydrogen production capacity of up to one million tonnes by the same year. It is currently active in more than 40 countries.

Oil and gas companies have been investing heavily in carbon capture projects to reduce production-related emissions.

Global carbon capture uptake needs to expand 120 times from current levels by 2050, rising to at least 4.2 gigatonnes a year, for countries to achieve their net-zero commitments, according to McKinsey.

Adnoc is undertaking a pilot project with a British-Omani sustainability company 44.01 to permanently convert carbon dioxide from the air into a mineral within rock formations in Fujairah.

The project is being carried out in partnership with the Fujairah Natural Resources Corporation and Masdar.

Adnoc's board on Monday also endorsed its goal to drive $48.5 billion into the UAE economy over the next five years, building on $11.2 billion generated through its In-Country Value programme in 2023.

That has brought the total value driven back into the country's economy to $51 billion, with 11,500 Emiratis employed in the private sector since the programme's launch in 2018.

As part of the Make it in the Emirates initiative, Adnoc has signed local manufacturing agreements in the UAE and international companies worth $16.9 billion since 2022.

The company aims to locally manufacture $19 billion worth of products in its procurement pipeline by 2027.

Updated: January 23, 2024, 3:33 AM