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Middle East’s Technology To Be protected From Climate Change | |
| Sumita Pawar |
According to the report, Dr. Yahya Anouti, ESG leader at PwC Middle East and co-author of PwC's first Middle East State of Climate Technology report, discussed how the Middle East region can pioneer the development of technologies to help achieve global climate goals in an exclusive interview with Oil & Gas Middle East.
The Middle East is well-positioned to pioneer climate technologies, according to the report, and with targeted investment, it will be able to assume global leadership in a number of climate technology domains where it now has a competitive advantage.
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GCC countries have been catching up to emerging and developed nations in renewable energy investments at an incredibly quick rate. In our recently issued report, we found that $6 billion has been invested in climate technology since 2013 by 12 Middle Eastern countries, and $1.6 billion of that was invested in the first half of 2022 only.
The report says that there are a number of reasons why investments in renewable energy are growing so quickly in the region.
First of all, Middle Eastern nations can take advantage of their natural resources by building sustainable hydrogen and solar power plants thanks to the differentiated availability of land.
The cost of producing solar-based electricity and green hydrogen in the Gulf is significantly competitive due to the fact that the region enjoys some of the highest solar voltaic output in the world.
Both the UAE and Saudi Arabia have made solar energy competitively priced as a result, and renewables have become an important regional investment focus.
On the other hand, sovereign wealth funds are in a position to support a significant push into climate tech innovation locally as well as globally at a time when the global economy is in a phase of slowing growth.
Add to the aforementioned the fact that the region is investing largely in new industrial zones that are set to be sustainable and circular.
One final point is related to the capabilities. The region can easily pivot its capabilities in the chemicals sector towards the hydrogen economy and direct its youth towards STEM education in related fields.
Despite the plummeting of overall venture funding for climate tech start-ups by $52 billion over the first three quarters of 2022, our analysis reveals an increasing desire for investment in the Middle East.
However, broader Middle Eastern tech investment trends mirror the global trend: after sharp increases in overall tech funding in recent years that continued into the first half of 2022, investment momentum slowed in the second half of the year, according to the report.
Several countries in the region have also taken big steps to meet their climate change goals, with a focus on using new technologies.
A few days before COP27, Saudi Aramco announced a $1.5 billion fund to invest in the technology needed to make the switch to green energy easier.
The UAE also signed a $100 billion strategic agreement with the US for clean energy projects, focusing on investing in reliable and responsible supply chains and encouraging investment in green mining. This was a significant development as the country prepared to host COP28 in 2023.
According to the report, funding climate technology in the MENA region is one part of the equation—the easy one. Success requires a holistic and mission-oriented or "moonshot" approach that hinges on the following:
Connect the dots between sovereign wealth funds, government programs, and national champion plans—essentially launching a climate-tech mission. Connecting the dots also goes beyond the region to include deeper partnerships with countries that share common goals.
de-risk through longitudinal collaborations.
It will be important to create off-take markets for the local innovations by connecting green product end-consumers, such as airlines or shipping companies for synthetic fuels, with the green fuel supplier and supply-chain innovators, including electrolyser manufacturers and carbon feedstock providers, where relevant.