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UAE energy group Adnoc to increase spending on decarbonisation projects

by SuperiorInvest

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The UAE’s state energy company Adnoc will increase spending on decarbonisation projects, a month after its president chaired the UN COP28 climate summit, where countries agreed to transition away from fossil fuels.

Adnoc’s board of directors, which includes the country’s vice president and the crown prince of Abu Dhabi, agreed to increase investment in the sector to $23 billion by 2030 from $15 billion previously, the company said.

Despite a push for decarbonization funding over the next six years, Adnoc aims to spend $150 billion on capital expenditure primarily to expand its oil and gas production capacity in a five-year plan launched in 2022.

The capital expenditure also includes investments in sectors such as chemicals and clean energy, as it seeks to diversify its business as the world moves away from fossil fuels.

Adnoc CEO Sultan al-Jaber said the company “continues to deliver on its mandate to transform, decarbonize and future-proof its business.”

He added that Adnoc was “committed to enabling a low-carbon future and a fair, orderly and equitable energy transition.”

At the COP28 summit, Al-Jaber was instrumental in negotiating an agreement between a diverse set of countries and stakeholders, often with conflicting interests.

Despite criticism over the meeting chaired by an oil company executive, the meeting’s final agreement included a reference to fossil fuels for the first time in three decades of UN climate agreements.

But because the deal does not support phasing out fossil fuels on an agreed timeline, climate activists and global officials have said it does not go far enough to reduce greenhouse gas emissions to be compatible with ideally limiting global warming to an increase of 1.5°C since then. pre-industrial times, as established in the 2015 Paris Agreement.

The long-term global average temperature increase is already at least 1.1°C. Last year, the world experienced the hottest year on record as greenhouse gas emissions continued to rise. Burning fossil fuels for energy is the largest contributor to global warming.

Adnoc has actively invested in areas such as carbon capture, although the technology has not yet been proven to be viable at scale.

This month, it announced an investment in Storegga, the lead developer of the UK’s Acorn carbon capture project planned near Aberdeen, the UAE company’s first overseas investment in carbon capture and storage.

In September, it decided to move forward with the Habshan carbon capture project, one of the largest of its kind in the Middle East and North Africa region.

The group has also been actively involved in negotiating deals more broadly, seeking major alliances across a variety of geographies and sectors.

Adnoc is in talks with German chemical company Covestro about a possible acquisition that could value the group at approximately €14 billion.

It has also held talks with Austrian energy group OMV about a deal that could combine its chemicals divisions.

Last year, Adnoc brought forward its net zero emissions target to 2045 from 2050, and has a target of zero methane emissions by 2030.

Video: The question of carbon capture | FT Climate Capital

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