Adnoc, Abu Dhabi's state-run energy company, was the largest spender on low-carbon solutions among national oil companies last year, according to a report.
This comes amid a sharp decline in low-carbon spending in the global oil and gas sector last year, as energy majors focused on profitability and meeting the demand for fossil fuels.
Adnoc, which is responsible for nearly all of the UAE’s oil and gas production, initiated the highest number of new low-carbon projects among both international and national oil companies, according to an Energy Intelligence report.
That included two major carbon capture projects, taking Adnoc’s committed investment to almost four million tonnes per annum.
It also included the company’s investments through Abu Dhabi-based clean energy company Masdar, which is aiming for 100 gigawatts of renewable energy capacity by 2030.
In January, Adnoc’s board increased the company’s allocation for decarbonisation projects and technologies, and lower-carbon solutions to $23 billion from $15 billion previously.
The company, which aims to achieve net zero by 2045, plans to double its carbon capture and storage capacity target to 10 million tonnes per annum by the end of the decade, which is the equivalent of removing more than two million petrol-powered cars from the roads.
Adnoc has been using renewable energy to fulfil all of its onshore grid electricity needs since the beginning of 2022.
The company is also connecting its offshore operations to the grid in a $3.8 billion project, which has the potential to reduce its offshore carbon footprint by up to 50 per cent.
Last month, Adnoc announced that it purchased a 10.1 per cent stake in UK-based carbon capture company Storegga, marking its first international equity investment in carbon management.
“Adnoc has a long history of leveraging strategic partnerships to develop expertise and support growth ambitions,” Wood Mackenzie said in a report at the time.
The deal boosted Adnoc’s capture and storage capacity to 5.2 million tonnes per annum while expanding the company’s presence in the UK, the energy consultancy said.
The Energy Intelligence report comes after the Cop28 climate conference in Dubai, during which 50 oil and gas companies, representing less than half of global oil and gas production, pledged to reduce carbon dioxide and methane emissions.
The companies, of which 60 per cent are NOCs, signed the Oil and Gas Decarbonisation Charter, which calls for net-zero emissions by 2050 or before. They are also aiming for “near-zero” upstream methane emissions and zero routine flaring by 2030.
'Historic' global stocktake approved at Cop28 in Dubai
However, low-carbon spending announced by oil and gas companies fell by 40 per cent to $63 billion last year compared with the previous year, Energy Intelligence said.
Although European energy majors have been highly active in the space, their share of tracked activity fell last year, the report found.
While some companies have maintained their focus on renewables, others, notably Shell, significantly reduced new investment announcements last year.
“Activity elsewhere is growing fast, led by Adnoc, which announced a surge of new investments, especially around Cop28,” the report said.
“Renewable power remains the largest area of tracked activity, but new announcements fell back, while CCS saw continued strong interest.”
Global oil companies have been investing billions of dollars into carbon capture technology and hydrogen as part of their decarbonisation plans, but the International Energy Agency has warned against “excessive expectations and reliance” on carbon capture or storage.
If oil and natural gas consumption were to evolve as projected under the current policy settings, this would require an “inconceivable” 32 billion tonnes of carbon capture utilisation and storage by 2050, including 23 billion tonnes through direct air capture, the Paris-based agency said in a December report.
Global investment in carbon removal capacity is projected to range from $100 billion to $400 billion by decade's end, according to McKinsey.
