Saudi Arabia’s state-run oil giant is investing $1.5 billion in a global energy transition, while cautioning that alternative sources aren’t yet capable of handling demand.
Saudi Aramco chief executive Amin Nasser told a business conference Wednesday that the current framework in place “is not really delivering,” while promoting “an optimal, realistic transition plan.” The new investments will be handled by Aramco Ventures.
The fund will specifically target areas including carbon capture and storage and greenhouse gas emissions. The plan falls in line with the Kingdom’s efforts to strengthen its green energy investments, and the Kingdom last year announced a goal of net zero emissions by 2060.
But Nasser also cautioned that alternative sources of energy aren’t yet capable of handling the current global demand, especially since the fossil fuel industry has suffered from severe underinvestment in recent years. Companies have moved away from tying up cash in fossil fuel investments as global leaders move toward renewables and condemn the use of large emitting practices.
“We need to realise that today alternatives are not ready to shoulder a heavy load of the growing energy demand and therefore we need to work in parallel until alternatives are ready,” he said.
Meanwhile Mohammed al-Jadaan, Saudi Arabia’s finance minister, told the conference that the thinking around a plan to transition away from fossil fuels has “now became more realistic that actually transition will take… possibly 30 years.”