Saudi Arabia's Energy and Mining Investments Propel Green Transition: Strategic Deployment in Low-Carbon Hydrogen and Clean Energy

2024-12-04 08:46:17 · MENA Business

In recent years, Saudi Arabia has been accelerating reforms in its energy and mining sectors, driving green and low-carbon transformation while intensifying foreign investment and technological cooperation. These efforts align with the Kingdom’s Vision 2030 goal of economic diversification. In 2023, Saudi Arabia advanced its investment partnerships, particularly in low-carbon hydrogen production and green energy innovations, solidifying its critical role in the ongoing global energy transition.

Collaborative Advances in Low-Carbon Hydrogen Production:

Topsoe and Aramco Develop Breakthrough Technology

In October 2023, Topsoe and Saudi Aramco signed a Joint Development Agreement (JDA) to produce low-carbon hydrogen at the Shaybah Natural Gas Liquids (NGL) Recovery Plant in Saudi Arabia. Leveraging Topsoe's eREACT™ technology, the partnership aims to demonstrate the efficiency, scalability, and carbon-reduction potential of this innovation globally. Once operational, the plant's 3 MW unit is expected to produce six tons of low-carbon hydrogen daily, significantly reducing the carbon footprint in the energy and chemicals industries.

This collaboration not only marks a pivotal commercial milestone for Topsoe's technology but also integrates Aramco's pioneering palladium alloy membrane technology to facilitate low-carbon hydrogen production and carbon capture. Elena Scaltritti, Topsoe's Chief Commercial Officer, remarked, “This strategic partnership accelerates the global adoption of low-carbon hydrogen technologies, and we are committed to delivering this project at the right time.” Aramco emphasized its commitment to utilizing Saudi Arabia's abundant renewable resources and existing oil and gas infrastructure to commercialize low-carbon hydrogen technologies. This initiative supports Saudi Arabia's energy transition strategy and green sustainable development goals while highlighting Aramco's innovative capabilities in the global low-carbon hydrogen market.

Green Transformation in Power and Water:

Conversion of the Yanbu 2 Plant

Beyond low-carbon hydrogen, Saudi Arabia is also advancing green initiatives in its power and water sectors. The Jubail and Yanbu Power and Water Company recently signed a SAR 340 million ($90.53 million) contract with Korea's Doosan Enerbility to convert the Yanbu 2 plant's fuel source from liquid fuel to dry gas. Scheduled for implementation by January 1, 2025, the project is expected to be completed within three years.

This transition aligns with Saudi Arabia's environmental objectives to reduce greenhouse gas emissions while enhancing operational reliability and power generation efficiency. By replacing liquid fuels with cleaner natural gas, the Yanbu 2 plant will lower carbon emissions while ensuring a more stable power supply. This project represents a significant step in the Kingdom's energy structure transformation, contributing to its broader low-carbon economy and green energy production goals.

Global Mining Investments:

Significant Capital Injections into Metals and Mining

Saudi Arabia's investment ambitions extend beyond energy, encompassing strategic moves in the global mining sector. At the Future Investment Initiative (FII) in Riyadh, the Saudi government announced mining investment agreements exceeding SAR 35 billion ($9.32 billion), spanning nine major projects. International participants include India's Vedanta and China's Zijin Mining.

These initiatives form a core part of Saudi Arabia's National Investment Strategy, designed to promote sustainable development of the Kingdom's mineral resources and bolster global supply chain resilience. Under Vision 2030, the mining sector's contribution to GDP is projected to increase from $17 billion to $64 billion, unlocking $1.3 trillion worth of mineral resources.

Notably, Vedanta plans to invest $2 billion in constructing a greenfield smelter and refinery with an annual capacity of 400,000 tons, along with a 300,000-ton copper rod factory. Zijin Mining aims to invest SAR 5–6 billion ($1.33–1.6 billion) to build a 100,000-ton zinc smelter, with plans for subsequent phases to include lithium carbonate extraction facilities and a copper refinery. These investments position Saudi Arabia as a critical player in the global metals and mining supply chain while providing essential raw material support for its green energy ambitions.

Dual Drivers: Green Transition and Economic Diversification

Through a series of strategically significant partnerships and investment projects, Saudi Arabia is advancing its transition to green, low-carbon energy and mining. These initiatives not only align with Vision 2030 but also offer new pathways for sustainable development in the global energy and mining sectors. From groundbreaking collaborations in low-carbon hydrogen technologies to large-scale investments in power, water, and mineral resources, Saudi Arabia demonstrates its leadership and foresight on the global stage.

As these projects progress, the Kingdom is poised to achieve notable results in driving green transition and fostering economic diversification.

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Saudi Arabia's Energy and Mining Investments Propel Green Transition: Strategic Deployment in Low-Carbon Hydrogen and Clean Energy