In March 2018 Saudi Arabia and the SoftBank Group signed a memorandum of understanding to build a 200 GW solar plant, the largest single solar project worldwide, which could dramatically lower the emission outlook for the Kingdom. If fully installed, Saudi Arabia could overachieve its “Critically insufficient” Paris Agreement target—a clear indication that the target is too weak. The Public Investment Fund recently announced it wants to locate an electric vehicle industry in Saudi Arabia, following an agreement to invest more than USD 1 billion in a US-based electric vehicle manufacturer.
Saudi Arabia’s 2016 “Vision 2030” included less ambitious efforts than the currently planned solar capacity additions as well as a previous plan from 2013 to diversify its energy supply away from oil dependence. Renewables growth would have to slow down to match the 2023 target in this strategy, and could lead to emissions rising by 80% above 2015 levels.
According to “Vision 2030”, Saudi Arabia is also working on a phase-out of fossil fuel subsidies. In December 2017 however, the Saudi government announced it would slow down this fossil fuel subsidy phase-out to enhance the economy.
The envisioned emissions pathway towards 2030 is highly unclear, due to a lack of data availability, including the absence of any national emissions projections and the fact that Saudi Arabia has not published the baseline corresponding to its Paris Agreement target.
Under its Nationally Determined Contribution (NDC), Saudi Arabia seeks to reduce its annual emissions by up to 130 MtCO2e in 2030. Saudi Arabia has not published the baseline from which its abatement target is deducted, but specified that a “dynamic baseline will be developed on a basis of a combination of two scenarios,” which are scenarios based on whether more oil is consumed locally—or exported.
There is therefore considerable uncertainty around Saudi Arabia’s targeted emissions level. We estimate a likely range for Saudi Arabia’s business as usual (BAU) pathways based on adjusted reference projections and extrapolation of the historical trend (for more information see Assumptions section).
Achievement of this goal is not conditional on international financial support, but is contingent on the continuation of economic growth, and “a robust contribution from oil export revenues to the national economy”. Saudi Arabia may choose to weaken its NDC by 2020 as it has maintained its “get-out clause”—i.e. if it decides the Paris Agreement creates an “abnormal burden” on its economy.
Based on the reference range, the NDC results in emissions levels of 861–1105 MtCO2e excl. LULUCF by 2030, a 38–77% increase above 2015 levels, or a 416–562% increase above 1990 levels. We therefore rate Saudi Arabia “Critically insufficient”.