Saudi Arabia’s 2030 NDC target is “Critically Insufficient” and its current policy would enable this weak target to be met. There is some development in planning which could lower future emissions growth significantly and if rated would move current policies from “Critically Insufficient” to “Highly Insufficient”. The development of renewable energy is part of a wider objective of the “Vision 2030” to reform and diversify Saudi Arabia’s oil-dependent economy. Another important measure is the plan to list a small share of the national oil company Saudi Aramco on the stock market.
In early 2019, Saudi Arabia announced a new renewable energy target aiming to achieve close to 30 GW by 2023 and nearly 60 GW by 2030, as part of an update of its “Vision 2030” strategy. These new targets are higher than the previous one issued in 2016, which aimed for 9.5 GW of renewable energy by 2023. Progress to date has however been slow: there was only about 0.1 GW of installed renewable energy capacity in 2018. 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 planned listing of Saudi Aramco could also open the state-owned company to increased international scrutiny, including around climate-related risks. The Climate Accountability Institute recently revealed Saudi Aramco is the company that has contributed by far the most to global carbon dioxide emissions since the 1960s. The stock market launch has been complicated by the September 2019 missile attacks on Saudi Arabia’s oil facilities that temporarily cut its oil production in half.
Saudi Arabia’s 2030 climate commitment 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.
According to our analysis, Saudi Arabia can reach the upper end of its “Critically Insufficient” pledge with current policies. Given there is no business as usual (BAU) scenario available linked to the Paris Agreement pledge, it is, however difficult to assess whether Saudi Arabia’s current policies meet the NDC.
Based on our assumptions, we expect Saudi Arabia’s emissions to reach a 92–108% increase above 2010 levels in 2030. One of the policies included here is the 2015 deregulation of energy prices.
It also appears that Saudi Arabia has decreased its nuclear ambitions. In 2013, Saudi Arabia announced it planned to build 17 GW of nuclear energy by 2032 and later revised this objective to 17 GW by 2040. In September 2019, the newly appointed Minister of Energy stated that Saudi Arabia would “proceed cautiously” with nuclear energy development. There are now tentative plans to build 2.8 GW by 2030. Due to this lower nuclear objective, the current policy scenario is close to our previous assessment, despite the new, higher 2030 renewable energy target.
In 2018, Saudi Arabia signed a memorandum of understanding with SoftBank Group to build 200 GW of solar energy by 2018. At this stage it is however unclear whether the 200 GW would all be constructed as domestic solar energy plants or whether some of it would be used to develop solar projects internationally. We have taken the 200 GW solar objective into account under our planned policies scenario.