UAE’s ADNOC bumps up decarbonisation budget to $23bn

ADNOC Group’s board of directors has increased the company’s budget allocation for decarbonisation projects, technologies and lower-carbon solutions to a record $23bn (Dhs84.4bn), up from $15bn.

The state-owned giant said the increased allocation will include investments to grow the company’s domestic and international carbon management platforms. The budget will also be used to support the decarbonisation journeys of both ADNOC and its customers.

The company made the announcement at its annual board meeting which was chaired by President Sheikh Mohamed bin Zayed Al Nahyan.

Sheikh Mohammed “directed ADNOC to grow its diversified portfolio and provide secure, reliable and responsible energy to support the delivery of a just, orderly and equitable global energy transition,” the energy firm said in a statement.

The company is tripling its renewable energy capacity through its shareholding in Masdar as it continues to transform, decarbonise and future-proof its business.

ADNOC said it aims to reduce its carbon intensity by 25 per cent by 2030 and to reach net zero carbon emissions by 2045.

The board also emphasised ADNOC’s role as a catalyst for the UAE’s economic and industrial growth and endorsed its goal to drive $48.5bn (Dhs178bn) back into the UAE economy over the next five years.

Accelerating decarbonisation

Meanwhile, the oil industry has backed carbon capture as an important technology to fight climate change, but critics have said it’s costly and will be difficult to deploy at the scale needed to reduce emissions.

ADNOC accelerated its decarbonisation strategy in July 2023, bringing forward its net zero carbon emissions target by five years to 2045, and to achieve zero methane emissions by 2030.

The company joined forces with Occidental Petroleum to explore carbon capture and storage (CCS) investment opportunities in the UAE and the US to create a carbon management platform. It is also in talks with ExxonMobil to collaborate on low-carbon technologies.

The Abu Dhabi-based energy giant is targeting a carbon capture capacity of 10mtpa by 2030, equivalent to taking over 2 million internal combustion vehicles off the road.

ADNOC supports economic growth

The energy firm generated $11.2bn (Dhs41bn) through its In-Country Value (ICV) program in 2023. ADNOC created 6,500 jobs for UAE nationals in the private sector in 2023 through the program, in partnership with the Emirati Talent Competitiveness Council (Nafis).

“These achievements bring the total value driven back into the UAE economy to $51bn (Dhs187bn), with 11,500 UAE nationals employed in the private sector since the program was launched in 2018,” the statement added.

ADNOC said since 2022 it has signed local manufacturing deals worth $16.9bn (Dhs62bn), with local and international companies in support of UAE’s ‘Make it in the Emirates’ initiative. It has a target to locally manufacture $19bn (Dhs70bn) worth of products it plans to procure by 2027.

Last year, the company completed initial public offerings of ADNOC Gas and ADNOC L&S, invested in one of the largest carbon capture projects in the MENA region at Habshan, and invested in the Hail and Ghasha Offshore Development – the world’s first project that aims to operate with net zero emissions.

Read: UAE’s ADNOC sets ambitious emission target ahead of COP28