The Dhofar province of Oman. The sultanate is pushing for the adoption of clean energy vehicles on its roads. Photo: Omani Ministry of Tourism
The Dhofar province of Oman. The sultanate is pushing for the adoption of clean energy vehicles on its roads. Photo: Omani Ministry of Tourism
The Dhofar province of Oman. The sultanate is pushing for the adoption of clean energy vehicles on its roads. Photo: Omani Ministry of Tourism
The Dhofar province of Oman. The sultanate is pushing for the adoption of clean energy vehicles on its roads. Photo: Omani Ministry of Tourism

Oman aims to sell only zero-emission vehicles by 2050 in sustainability push


Aarti Nagraj
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Oman plans to sell only zero-emission cars by 2050 as part of a new strategy unveiled by the government to achieve its energy transition plan.

The strategy, developed by the sultanate's Ministry of Energy and Minerals in collaboration with government and private entities, is in line with the Oman Vision 2040 economic diversification plan as the country aims for zero carbon emissions by 2050, the Oman News Agency reported on Saturday.

The strategy focuses on areas including energy efficiency, renewable energy, the hydrogen economy, and carbon capture, transport, and storage. It aims to ensure secure energy supplies, enable an “organised transition to decarbonisation”, enhance local capabilities for energy transformation, promote a low-carbon economy and maintain “Oman’s competitive edge in the global energy market”, the report said.

The plan is designed to meet the energy needs essential for economic growth, ensuring economic diversification, reducing carbon footprint, creating new job opportunities and developing national skills, ONA cited Maryam Al Hashimi, director of Electricity and Energy Efficiency Policies and Strategies at the ministry, as saying.

The sultanate's push to sell zero-carbon emission vehicles is line with the government's recent investments in the clean transport sector.

In September last year, the Oman Investment Authority invested in US-based electric vehicle battery start-up Our Next Energy (One). Oman’s sovereign wealth fund also signed a strategic co-operation agreement with One to identify potential areas of partnership in energy and battery storage in the sultanate.

The number of EVs in the country rose to 1,500 in 2024 from 550 last year, Khamis Al Shamakhi, undersecretary at the Ministry of Transport, Communications and Information Technology for Transport said at an event, local media reported on Saturday.

In terms of infrastructure development, more than 120 charging points for electric vehicles were installed last year, he said. The ministry expects the number of EV charging points across the country to reach more than 200 by the end of this year and exceed 350 by 2027.

It has also launched a green corridors project for lorries that operate on green hydrogen energy, along with a pilot project to activate electric bicycles in food delivery, Mr Al Shamakhi said.

According to its latest energy strategy, Oman's Ministry of Energy and Minerals has also set targets for green hydrogen production, with plans to reach one million tonnes a year by 2030, 3.5 million tonnes by 2040, and 8 million tonnes by 2050.

Oman has been positioning itself as a global hub for green hydrogen exports, as many countries in the Middle East turn to the clean fuel as a way to transition to a more sustainable energy future.

The International Energy Agency expects the Gulf country to become the sixth largest exporter of hydrogen globally and the largest in the Middle East by 2030. Oman is on track to supply more than 60 per cent of the total hydrogen exports from the Middle East by the end of the decade, the IEA said.

Green hydrogen is produced through a process called electrolysis, in which water is split into hydrogen and oxygen using electricity generated from renewable sources.

Last year, the state-run Oman Hydrogen Company, or Hydrom, signed six agreements worth $51 billion to invest in green hydrogen projects. These were signed with companies from Belgium, the Netherlands, the UK, Japan, Singapore, Germany, India, Kuwait and the UAE.

The ministry plans to conduct site tours for renewable energy and clean hydrogen projects, according to the ONA report.

The sultanate aims to boost the share of renewable energy to 30 per cent by 2030 and 70 per cent by 2040, before reaching 100 per cent by 2050, under the latest strategy.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Updated: September 22, 2024, 10:21 AM