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Unlocking The Gulf's Blue Wealth: Opportunities Abound | |
| Sumita Pawar |
The blue economy helps in the diversification of the economy and helps move away from oil. It is also called as ‘ocean economy.’ According to the World Bank, the blue economy is “the sustainable use of maritime resources for economic growth, jobs, and improved livelihoods while preserving the marine ecosystem’s health.” It says that blue economy will improve livelihoods and jobs, and ocean ecosystem health.
The objective is to achieve a harmonious relationship between preservation and resource extraction while developing economies that rely on the ocean.
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While the region has relied on oil and gas industries, investing in the blue economy and sustainable technologies will diversify its economy and open new avenues for sustainable growth, job creation, and environmental stewardship.
The blue economy presents a wealth of opportunities, Egypt's reserves now total 30, which is 13.5 percent of the Republic's total area. The country has a total of 53 seaports, with 15 being commercial and 38 being specialized.
The area of coral reefs in the Red Sea region is 3412 km. More than 90 percent of incoming tourism to Egypt is attributed to beach tourism. In 2020, Egypt's fish production amounted to 63 billion pounds.
The Suez Canal covers 25 percent of the world's trade, with an estimated value of over 1 trillion US dollars annually. Additionally, 30 percent of global container traffic passes through the canal, with 50 ships carrying between US $3-9 billion in goods making the trip between the port of Suez and Port Said each day.
The Suez Canal transports an estimated 7-10 percent of the world's oil and 8 percent of liquefied natural gas daily, as well as one million barrels of oil.
Offshore wind farms have the potential to be established in various locations worldwide. Coasts along the Gulf of Suez and Aqaba in Egypt, Jordan, north-west Saudi Arabia, the southeast coast of Oman, northern Libya, and southern Tunisia have an annual wind speed greater than 5m/s at 80 meters above sea level.
Egypt is a regional leader in building wind farms, with the largest wind farm in the country being a 545-MW facility in Zafarana. Cairo is planning to expand its wind energy capacity through two memoranda of understanding. One is with Saudi Arabia's renewable energy developer ACWA to construct a 10-GW wind farm, and the other is with the UAE's Masdar to build a second 10-GW onshore wind farm.
These would be the second-largest wind farms globally, behind China's Gansu project, which has a projected capacity of 20 GW. The Masdar onshore wind farm is expected to generate about 48,000 GWh of clean energy annually, offsetting some 23.8 million tons of CO2 emissions, which is about 9 percent of the country's total carbon emissions.
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The global Container Port Performance Index (CPPI) indicates that four of the five best-performing ports in the world are in the Middle East region. These are King Abdullah Port in Saudi Arabia, Port Salalah in Oman, Hamad Port in Qatar, Khalifa Port in Abu Dhabi, and the largest port in the Mediterranean, the Moroccan port of Tanger-Med.
Between 80 percent and 90 percent of international trade involves maritime transportation, including container carriers and oil and chemical tankers. These types of vessels represent 20 percent of the global fleet but contribute 85 percent of the net greenhouse gas (GHG) emissions associated with the shipping sector. Therefore, policymakers and industry leaders are increasingly concerned about adapting ports and maritime shipping to climate change impacts.
This concern is particularly relevant considering recent regulations by the International Maritime Organization (IMO) that aim to reduce CO2 emissions from ships by 50 percent by 2050. Other key developments that aim to reduce maritime carbon emissions and environmental impacts include the 2021 Clydebank Declaration.
This declaration aims to establish six zero-emission green corridors of entirely decarbonized maritime routes between two or more ports. The Dhaka-Glasgow Declaration also called for the IMO to implement a mandatory levy on international shipping to accelerate efforts on climate change mitigation.
The Gulf Cooperation Council (GCC) is set to benefit from the blue economy, which contains interconnected sectors that have the potential to achieve growth and support economic development.
The UN estimates that the ocean economy has an annual turnover of between US$3 and US$6 trillion, covering employment, ecosystem services provided by the ocean and cultural services. Fisheries and aquaculture contribute US$100 billion annually and about 260 million jobs to the world economy.
According to Anis Khayati, an economics professor at the University of Bahrain, developing the blue economy does not require difficult innovations or scarce knowledge.
It is noteworthy to understand, that most sectors of the blue economy are linked to available technologies and methods of production, which can push the blue economy growth process and achieve sustainable development.
These areas include producing renewable energies, extracting mineral wealth in deep waters, oil and gas production, shipping and port activities, fishing, aquaculture, coastal and marine tourism, and action against ocean nutrient pollution.
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The Gulf Cooperation Countries (GCC) are introducing ambitious green projects, including mega tree plantations, establishing large solar plants, and building futuristic cities.
In terms of blue projects, Saudi Arabia plans to build a new floating city called Oxagon, claiming to be the world’s largest floating structure, in the southwestern area of Neom.
Half of Oxagon will float on the Red Sea with an average depth of 500 meters. Saudi Arabia also has its Red Sea project, an ambitious regenerative tourism plan, the Coral Bloom development, and Amaala, a luxury tourism destination under development on the northwestern Red Sea coastline.
The United Arab Emirates (UAE) has set an ambitious target to plant 100 million mangroves by 2030, signalling its commitment to environmental conservation and sustainability.
The country has been strengthening its maritime capabilities by forging partnerships with neighbouring countries. The UAE boasts 12 commercial trading ports with 310 berths, facilitating a substantial cargo tonnage of 80 million.
In a significant development, Qatar has recently announced its plans to construct the world's largest blue ammonia plant. The project, spearheaded by QatarEnergy, is projected to reach completion by 2026, with an estimated cost of US$1 billion.
The plant aims to produce 1.2 million tons of blue ammonia annually. Blue ammonia serves as a valuable fuel source for various applications, including industrial heating, heavy road transport, and shipping thereby protecting marine life.
In 2022, Mariam bint Mohammed Almheiri, the UAE's Minister of Climate Change and Environment, emphasized the importance of a just transition to clean energy sources. She acknowledged that while oil and gas will continue to play a role in the energy mix for the foreseeable future, there is a growing recognition of the need to embrace cleaner alternatives.
Conclusively, blue economy can provide opportunity to grow and create a sustainable future if governments and industries focus on developing the right technologies to support aquaculture, improve desalination, transportation, and tourism.