Sustainable energy transition and measures to mitigate the effects of climate change were on top of the agenda at the 10th Arab-China Business Forum that began in Riyadh on Sunday.
Dashing common misconceptions about energy transition, the panelists at the event underscored that investing in sustainability does not inherently imply reducing investments in oil and gas.
Speaking at a panel on clean energy and renewables and the pathways to reduce emissions, Yasser Mufti, senior vice president of strategy at Saudi Aramco stressed that people in the industry have misunderstood the term energy transition.
“How we look at the energy transition, it is a transition to lower emissions, not a transition necessarily away from oil and gas as that definition has been adopted, unfortunately, by some in the industry,” he explained.
Another panelist from Saudi Arabia’s King Abdullah Petroleum Studies and Research Center said the world needs a huge investment to achieve its energy transition goals.
“Our estimation for investment needed in the next 30 years until 2050 is between $3 trillion to $8 trillion per year,” said Fahad Al-Ajlan, president of KAPSARC.
He added: “That’s equivalent to around 3 to 8 percent of the global gross domestic products. Today, clean energy investment is about $1 trillion, leaving us short of the goals that we need to set.”
While the oil and gas sector had experienced a 50 percent decrease in investment, he clarified that this doesn’t signify a direct shift toward sustainable investments.
“We still need oil and gas to ensure that we have energy security and affordability,” he stressed.
While renewable energy plays a crucial role in the transition, industry experts stressed that it encompasses a broader transformation of the entire energy system, including energy generation, distribution, storage and consumption.