Saudi oil and gas giant Saudi Aramco has created a $1.5 billion sustainability fund to encourage investment in technology needed to support “a stable and inclusive” energy transition.
Aramco disclosed the creation of “one of the world’s largest sustainability-focused venture capital funds” on Wednesday at the sixth edition of the Future Investment Initiative (FII), as part of its efforts to meet the world’s growing energy demand with lower greenhouse gas emissions.
According to Aramco, the fund will target investments globally, however, the initial focus areas will include carbon capture and storage (CCS), greenhouse gas emissions, energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia and synthetic fuels.
Amin H. Nasser, Aramco President and CEO, remarked: “The sustainability fund reinforces our commitment to leverage innovative technologies that will make a difference in addressing the dual challenge of achieving greater energy security and sustainability, and show how these two great imperatives can and must co-exist.”
This announcement comes only weeks after the energy giant’s CEO said that ramping up oil and gas investments and devising a “more credible” energy transition roadmap was required to address climate priorities and energy security challenges for a more secure and sustainable energy future.
The new fund – managed by Aramco Ventures, the venture capital arm of Aramco – will invest in technologies that support the Saudi player’s net-zero by 2050 target for its operational assets, as well as the development of new lower-carbon fuels. In June, the firm outlined a set of interim targets that it aims to achieve by 2035, which are intended to reduce or mitigate net Scope 1 and Scope 2 GHG emissions across its operated assets by more than 50 million metric tons of CO2 annually when compared to the business-as-usual forecast.
H.E. Yasir O. Al-Rumayyan, Aramco Chairman, commented: “Climate change is a critical issue, which is why sustainability is well-integrated in Aramco’s strategy and investment decisions. The company is harnessing innovation and collaboration as it seeks long-term solutions to global energy challenges. By driving large-scale investments and building key domestic, regional and international partnerships, Aramco aims to enable a stable and inclusive energy transition that meets the world’s need for energy with lower emissions.”
Furthermore, the Saudi giant is developing its blue ammonia and hydrogen business, with the aim of producing up to 11 million metric tons of blue ammonia per year by 2030. This has the potential to support significant emissions reductions in hard-to-decarbonise sectors such as heavy-duty transport, heating and industrial applications.
In addition, the firm is exploring opportunities to reduce GHG emissions along the entire value chain of its products and aims to implement a range of initiatives to support the Circular Carbon Economy framework in which CO2 emissions are reduced, reused, recycled and removed.
Meanwhile, Aramco’s wholly-owned subsidiary Aramco Trading Company has participated in the first voluntary carbon credits auction organized by the Public Investment Fund (PIF). This comes after the signing of a memorandum of understanding between Aramco and PIF earlier this year for participation in a regional voluntary carbon market to be launched in Saudi Arabia in 2023.
“Our participation in the MENA region’s first voluntary carbon market in Saudi Arabia represents another pathway towards our long-term net-zero ambition and demonstrates how we can deliver a multi-pronged approach in addressing the climate challenges we face,” concluded Nasser.
Regarding Aramco’s other recent activities, it is worth noting that the Saudi giant awarded project management services contracts to Australia’s Worley in July 2022 for unconventional gas.
