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However, escalating concerns over climate change, market shifts towards renewable energy, and the economic vulnerabilities associated with fossil fuel dependency now require a strategic transformation of the Middle East’s energy landscape towards decarbonisation.

Decarbonising oil and gas assets in the Middle East is not only an imperative for environmental sustainability but also a prudent economic and geopolitical strategy for the future.

To succeed, decarbonisation of the oil and gas value chain in the Middle East must include a varied emissions reduction strategy. No single strategy will result in sufficient decarbonisation of the oil and gas sector and its complementary industries.

With proactive policies and well-funded investments, the Middle East has the potential to be at the forefront of adopting and developing advanced technologies like carbon capture utilisation and storage (CCUS), embracing renewables such as solar, and promoting low-carbon fuel sources.

The environmental and climate imperative

Climate change is an increasingly pressing threat. Rising temperatures (and in some regions, falling temperatures), rising sea levels, and extreme weather events magnify the urgency to reduce greenhouse gas emissions.

The Middle East, despite its ample oil and gas resources, is among the region’s most vulnerable to climate change, experiencing frequent heat waves and water scarcity.

Decarbonisation efforts align the Middle East with international climate commitments, which aim to limit the global temperature rise to below 2°C. As global leaders and markets increasingly prioritise lower carbon emissions, the Middle East’s proactive action in decarbonising its fossil fuel assets mitigates the environmental impact of these producing assets and enhances the Middle East’s reputation as a responsible energy producer.

By way of example, countries such as Saudi Arabia and the UAE are investing heavily in solar and wind power to reduce reliance on fossil fuels in the power sector, with high-profile projects like the Al Shuaibah solar plant in Saudi Arabia and the Mohammed bin Rashid Al Maktoum solar park in the UAE setting the standard for large scale renewable power.

Economic diversification and long-term viability

Historically, the region’s economies have been heavily dependent on oil revenues, making them vulnerable to volatile oil prices and declining demand amid the energy transition.

Decarbonising oil and gas assets can facilitate economic diversification, fostering investments in renewable energy, technology, and other non-oil sectors.

Again, Saudi Arabia and the United Arab Emirates have launched ambitious visions —Saudi Vision 2030, the UAE Energy Strategy 2050 and the UAE’s Industrial Decarbonization Roadmap — to diversify their economies.

Partnerships are being formed to produce and distribute low-carbon and alternative fuels like ammonia, hydrogen, and biofuels.

The transition towards decarbonised assets has the potential to attract international investments committed to sustainability, bolstering regional economies and technological capabilities. Incorporating decarbonisation into a broader economic strategy allows the Middle East to reduce oil dependency, create new job opportunities, and develop resilient economies prepared for a low-carbon future.

Technological innovation and economic opportunities

A key aspect of decarbonisation involves adopting and implementing advanced technologies such as carbon capture and storage (CCS), and digital monitoring systems for leak detection. Investing in CCS, for example, allows the continued expansion of oil and gas assets utilising existing infrastructure while significantly reducing emissions.

Public-private partnerships (PPPs) also play a vital role in mobilising resources and fostering innovation and advancement in decarbonisation technology. The Middle East has a proven track record in using PPPs to accelerate investment in energy industry technology, and to foster collaboration between the public and private sectors.

The Amaala Project in Saudi Arabia (a collaboration between Red Sea Global, EDF and Masdar) to develop a luxury resort that is entirely powered by renewable energy is one such example of a PPP that will no doubt see new standards set for the global energy transition.

Enhancing energy security and resilience

Countries in the Middle East are actively collaborating on decarbonisation initiatives with a view to enhancing energy security by reducing reliance on volatile fossil fuel markets.

Transitioning to renewable energy and low-carbon options provides a diversified energy source that helps to minimize economic disruptions caused by oil price fluctuations or geopolitical tensions.

Addressing social and political dimensions

Decarbonisation offers social benefits, such as employment in renewable sectors, community development, and improved air quality.

Transition programmes can be structured to ensure labour practices and support for communities historically dependent on the oil and gas industries. These transition strategies promote social stability and long-term socio-economic health.

Politically, demonstrating leadership in climate action can bolster international relationships and foster regional cooperation. Integrating decarbonisation strategies into regional government policy also algins with global environmental standards, ensuring the Middle East remains competitive in an evolving energy landscape.

Challenges and strategic considerations

Implementing decarbonisation initiatives in the Middle East requires addressing specific challenges. These include the significant capital expenditure already involved in extracting fossil fuels, and the cost of modifying existing infrastructure to accommodate new technologies.

The cost to decarbonise varies widely between oil and gas assets depending on factors such as the available infrastructure, location, and the pace of technological advancement.

Finding a suitable equilibrium between decarbonising and increasing the cost of oil and gas production remains one of the key challenges for the energy industry.

Additionally, political will and regional collaboration must create a supportive policy environment. Abundant oil and gas reserves have resulted in low domestic energy prices, which may create a lack of economic incentive and slow uptake for transitioning to renewables given the higher price point for consumers.

Strategic measures to combat this resistance include phased implementation of CCS projects, incentivising renewable energy investments, and establishing regional frameworks for knowledge sharing and technology transfer.

Decarbonising oil and gas assets in the Middle East is a complex, multifaceted necessity, driven by technical advancements, environmental imperatives, economic resilience and regional and global political considerations. Although decarbonising presents challenges, investment in clean energy technologies, and regional collaboration can facilitate a sustainable future for affordable energy.

Embracing decarbonisation not only aligns the Middle East with global climate commitments but also positions the region as a leader in the emerging low-carbon economy. The transition from a fossil fuel-dependent paradigm to one centred on sustainability and innovation is paramount for economic, environmental and sociopolitical growth.

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Reprinted with permission from the July 7, 2025 issue of Power Engineering International. Further duplication without permission is prohibited. All rights reserved.