CERAWEEK: Clear policies, energy efficiency must be tackled now, says ADNOC CEO

Clear energy policies, easily adoptable technological and other efficiencies must be tackled right now, at an early stage in the energy transition that will pave the way to solve the more complicated issues of shifting to large-scale decarbonization and alternative fuels in the years to come, the managing director of the Abu Dhabi National Oil Company said March 6.

Speaking on the first day of the CERAWeek by S&P Global annual energy conference, Sultan Ahmed Al Jaber, who is also UAE Minister of Industry and Advanced Technology, said that aluminum, steel, cement and other heavy industries make up 30% of global emissions and is a good place to start along the road to large-scale decarbonization.

"These are the essential industries that make the world work, and our job is to help make them work better and make them work cleaner," he said. "Now is the time to commercialize carbon capture and take it to scale across all industries."

But decarbonizing economies at scale requires an "enabling ecosystem" that links policies, people, technologies and capital, Al Jaber said.

"Policymakers must create the incentives that move the market in the right direction," he said. "Industry needs clear policies to guide long-term investment decisions."

Al Jaber cited the US' recent Inflation Reduction Act as an example, adding that it stimulated low-carbon, high-growth investment opportunities that companies large and small are investing in. It's the type of regulation that will accelerate breakthrough technology to unlock battery storage, accelerate breakthrough technologies and bring down the cost of carbon capture and develop and commercialize the hydrogen value chain, he said.

"People need to work together... to break out of their silos and unify around the common cause," he said.

Capital markets need 'much bigger role'

Also, the financial community needs to play a "much bigger role" in capitalizing this transition, even as it has eagerly lent money in the last couple of years to developing projects proposed by not only technology providers but oil and gas producers from large publics to small startups.

The world invested $1.4 trillion in the energy transition in 2022, Al Jaber said, citing the International Energy Agency, but needs "over three times that amount" to be adequately funded.

Moreover, the capital must come from diverse sources -- governments, the private sector, institutional investors, private equity, industry and international financial institutions.

"When it comes to financing the energy transition we must ensure that no one is left behind," he said, adding that only 15% of clean technology investments reached developing economies and the so-called global south, where 80% of the world's population live.

"That is why we need to fundamentally reform the IFIs and MDBs [international financial institutions and multilateral development banks] to unlock, finance, lower risk, and attract greater private investment," said Al Jaber.

Above all, energy efficiency must "sit across" everything that is done because it's "easy, fast and cheap," he said. "We can't think about big ideas without first going after the low-hanging fruit. Energy efficiency as far as I'm concerned is a quick one and we must stay laser-focused on it."

Expanded hydrogen market by 2030

In addition, he called for the development, commercialization and expansion of hydrogen production by 2030 and the technology, entrepreneurship and innovation to develop the entire hydrogen value chain.

Al Jaber also invited those interested in participating in hydrogen ventures to partner with the UAE.

He said it's his belief that transforming the world's energy systems represents the "greatest opportunity for human and economic development since the first industrial revolution... it's this industry's opportunity to reinvent itself."

"We certainly have what it takes to make the difference," Al Jaber said. "This is our moon shot and failure is not an option."