Saudi Arabia Subsidies

Saudi Arabia–$60.9 billion in 2011

Diesel and gasoline sold in Saudi Arabia are about 12% and 30% of international reference prices, respectively. Saudis enjoy the second lowest domestic fossil fuel prices in the world, behind only Venezuela. In 2009, the Kingdom spent a total of $32.5 billion on fossil fuel subsidies. In 2010, this figure increased to $43.6 billion. In 2011, it ballooned to $60.9 billion. Of its total subsidy spending in 2011, 76 percent went to subsidizing oil, while 24 percent went to electricity, which is also derived from oil. Riyadh is currently the second highest spender on fossil fuel subsidies in the world. In fact, the Kingdom spent more on fossil fuel subsidies (10.6% of GDP) than on health (about 3% of GDP) and education (about 6% of GDP) combined. Saudi Arabia is the second-leading subsidizer of end-use fossil fuel prices, providing 61% of its $48.6 billion in fossil fuel consumption subsidies to oil, 26% to electricity, and 14% to natural gas in 2015.

Saudi Arabia recently scaled back some fossil fuel consumption subsidies that artificially lowered the price of fuel for its citizens, increasing its country’s gasoline prices by 50 percent. Saudi Arabia’s government also started a policy to reduce fossil fuel subsidies in 2015 when the kingdom raised the price of 95 Octane gasoline from 0.60 to 0.90 riyal. Currently, the government is considering the details of a plan to phase out subsidies for gasoline and jet fuel. This could result in a hike of about 80% for octane-91 grade gasoline to about 1.35 riyals per liter (0.36 cents), one person said on condition of anonymity. The government plans to delay increases in other energy prices until early 2018. The plan would also include a cash handouts transfer program for low and middle-incomes families to help them cope with the impact.

The government wants to make a carefully balanced move as removing energy subsidies is politically sensitive issue for the nationals who are accustomed to low energy prices. Therefore, it seeks to review the impact on economic activities and the burden on its citizens to avoid political backlash. A person with knowledge of the matter stated that gasoline and jet fuel would undergo immediate, one-time increases under the Saudi plan, while the government would raise prices of other fuels gradually between 2018 and 2021.

Learn More

Saudi Arabia fossil fuel subsidies: Understanding the Problem by Fuadi Pitsuwan January 24, 2014
http://hksjmepp.com/saudi-arabias-fossil-fuel-subsidies-understanding-the-problem/

Fossil Fuel Consumption Subsidies, While in Decline, Are Still Pervasive in the Developing World. June 5, 2017
http://instituteforenergyresearch.org/analysis/fossil-fuel-consumption-subsidies-decline-still-pervasive-developing-world/

Saudi Arabia studies fuel subsidies reform. October 29, 2015. Economic Intelligence Unit.
http://www.eiu.com/industry/article/1633636747/saudi-arabia-studies-fuel-subsidy-reform/2015-11-04

Saudis May Raise Domestic Gasoline Prices by 80%. Bloomberg.
https://www.bloomberg.com/news/articles/2017-09-18/saudis-said-to-weigh-raising-gasoline-prices-by-end-of-november

Saudi Arabia may raise gasoline prices by 30 pct from July, February 27, 2017. Reuters.
http://www.reuters.com/article/saudi-fuel/saudi-arabia-may-raise-gasoline-prices-by-30-pct-from-july-idUSL8N1G030D

Saudi Arabia Survey

The questionnaires focused on exploring the approach of the construction sector stakeholders to sustainable buildings both at the development and operational phases of projects. The findings of the survey indicate that the Saudi building industry has yet to realize the importance of sustainability.

To investigate the prospects of sustainable buildings in Saudi Arabia, two researchers from Glasgow Caledonian University and King Fahd University of Petroleum & Minerals conducted a study in September 2014 to analyze the results of a questionnaire survey conducted with pertinent professionals. The survey targeted the representatives of the key professions in the Saudi construction industry including architects, engineers, project managers, construction contractors, developers and investors. More than 500 questionnaires were distributed randomly amongst the professionals in the Saudi building industry covering the major cities in the country. The questionnaires, conducted between December 2011 and February 2012 employing web-based and in-person approaches, were designed both in English and Arabic. The analysis is based upon 122 responses received from architects, engineers, project managers, construction contractors, developers and investors.

The questionnaires focus on exploring the approach of the construction sector stakeholders to sustainable buildings both at the development and operational phases of projects. The findings of the survey indicate that the Saudi building industry has yet to realize the importance of sustainability. The participants were asked to rank several factors such as cost, modernity, development time, architectural outfits, quality and durability, safety, and sustainability in terms of their priority score where 1 is the most important and 7 is the least important. 75% of the participants considered cost and quality and durability to be the most important factor while most of the participants placed sustainability in the rank 7 as the least important factor.

The survey found that the level of formal education and work experience tend to have a positive influence on the appreciation of sustainable buildings. Participants with higher education levels (architect, engineer, and project manager) tend to have a higher level of knowledge of principles of sustainable-energy buildings with 43% for architects and 35% for engineers and project managers. Similarly, the experience with principles of sustainable-energy buildings is positively correlated with years of experience. Participants with 5 years or less of experience have less than 30% knowledge of sustainable buildings while those with 20 years and more had over 40% knowledge of sustainable buildings.

Learn More

Saudi Building Industry’s Views on Sustainability in Buildings: Questionanaire Survey. Farajallah Alrashed and Muhammad Asif. September 2014. Accessed from
http://ac.els-cdn.com/S1876610214034316/1-s2.0-S1876610214034316-main.pdf?_tid=afedfd36-8b32-11e7-968b-00000aab0f6b&acdnat=1503843727_fc0ab019931071de28858e292413fa1a

Saudi Arabia Strategies

Saudi Arabia: (1) Strengthen country’s Paris Agreement pledge; (2) Adhere to previously announced policies aimed at diversifying its energy mix.

Yes, Saudi Arabia should strengthen its INDC emission reduction pledge to the Paris Agreement by increasing the amount of GHG emission avoidance from the current targeted rate of 130 MtCO2e/year to 390 MtCO2e/year by 2030 to meet its minimum fair contribution (Climate Action Tracker, 2017). Specifically, Climate Tracker reports: “The actions and plans outlined in this submission seek to achieve mitigation co-benefits ambitions of up to 390 million tons of CO2eq avoided by 2030 annually through contributions to economic diversification and adaptation.”

Saudi Arabia can further reduce its greenhouse gas emissions by strengthening and accelerating the pace of implementation of its existing policies and programs. Specifically, Saudi Arabia should adhere to the previously planned policies aimed at diversifying the energy mix to achieve 54 GW of renewable and 17 GW of nuclear energy by 2030 rather than the much reduced plan that aims to achieve just 9.5 GW of renewable and with no reference is made to nuclear power. Moreover, the Kingdom needs to speed up the implementation of the 30 currently-planned projects and programs that will produce 9.5GW of energy of renewables over the next seven years in a shorter span of time, say 5 years instead.

Learn More

Climate Action Tracker
http://climateactiontracker.org/countries/saudiarabia.html

The Intended Nationally Determined Contribution of the Kingdom of Saudi Arabia under the UNFCCC. Accessed from
http://www4.unfccc.int/submissions/INDC/Published%20Documents/Saudi%20Arabia/1/KSA-INDCs%20English.pdf

Saudi Energy Minister Announces ‘new phase’ in Kingdom’s power generation as first round bids for Renewable Energy Projects opened. The Renewable Energy Project Development Office (REPDO), Press release, April 17, 2017. Accessed from
https://www.powersaudiarabia.com.sa/web/attach/news/Press-Release-SAREIF-17%20April-EN.pdf

Saudi Arabia Renewable Energy

Saudi Arabia—No 2050 100% commitment
Benchmark: 9.5 GW of renewable energy supply by 2030

Saudi Arabia’s goals for using renewable energy to support its economy are listed in its INDC. They include scenario one: economic diversification with strong contribution from oil export revenues. In this scenario, the revenues from exporting oil will be invested in sectors such as renewable energy sources to strengthen economic growth. One of the actions and plans to achieve the goal of reducing greenhouse gas (GHG) emissions is the pursuit of renewable energy projects.

There are currently 30 planned projects and programs that will produce 9.5GW of renewable energy. The Round 1 of the National Renewable Energy Program includes a 300 MW Sakaka solar PV project and a Dumat Al Jandal 400 MW wind plant project being launched by Ministry of Energy, Industry, and Mineral Resources (MEIM). These efforts are part of 60 greenfield projects tendered over the next seven years towards the target of 9.5 GW of renewables by 2030 in line with Vision 2030.

The Renewable Energy Project Development Office (REPDO) has shortlisted 27 companies as qualified bidders for the 300 MW Sakaka solar plant project. It has also invited companies to submit Request for Qualification (RFQ) to implement a 400 MW wind power plant. The Project will involve the development of a greenfield wind power plant near the cities of Dumat Al Jandal and Sakaka, in the northern region of Saudi Arabia.

Learn More

The Intended Nationally Determined Contribution of the Kingdom of Saudi Arabia under the UNFCCC. Accessed from http://www4.unfccc.int/submissions/INDC/Published%20Documents/Saudi%20Arabia/1/KSA-INDCs%20English.pdf
Saudi Energy Minister Announces ‘new phase’ in Kingdom’s power generation as first round bids for Renewable Energy Projects opened. The Renewable Energy Project Development Office (REPDO), Press release, April 17, 2017. Accessed from https://www.powersaudiarabia.com.sa/web/attach/news/Press-Release-SAREIF-17%20April-EN.pdf
International Companies Visit Sakaka Site and Prepare Bids for Saudi Arabia’s First Utility Scale Solar PV Plant. The Renewable Energy Project Development Office (REPDO), Press release, May 18, 2017. Accessed from https://www.powersaudiarabia.com.sa/web/attach/news/Press-Release-NREP-Bidder-Conference-MAY-2017.pdf
Saudi Arabia Issues Request for Qualifications for 400 MW Wind Power Project in Dumat Al Jandal The Renewable Energy Project Development Office (REPDO), Press release, July 16, 2017. Accessed from
https://www.powersaudiarabia.com.sa/web/attach/news/EN_Dumat-Al-Jandal-RFQ_v3.pdf

Saudi Arabia Success Project

Saudi Arabia—Green Saudi Company for Carbon Services

In 2017, the Saudi Electricity Company (SEC) announced a partnership and cooperation agreement with Petroleum, Chemicals & Mining Company Limited, a subsidiary of the Saudi Binladen Group, to establish the Green Saudi Company for Carbon Services.

The company seeks to develop and manage carbon emissions reduction programs and sustainable development mechanism projects. It also aims to support the fight against environmental pollution in accordance with regional and international agreements and protocols as well as local regulations. The Green Saudi Company for Carbon Services is a step forward towards reducing emissions and controlling pollution, and will also help to achieve Saudi Arabia’s INDC pledge to the Paris Agreement.

The establishment of a company solely focused on GHG emissions is significant for several reasons. First, the initiative is supported by top senior level policymakers in the Ministry of Energy, Industry and Mineral Resources and other agencies concerned with clean energy. Second, it demonstrates the Saudi government’s serious commitment to its role in international carbon-reduction programs in light of the Paris and Marrakech climate conferences. The Green Saudi Company for Carbon Services will implement clean energy and carbon reduction projects that support the Paris Agreement and the United Nations Framework Convention on Climate Change. It will also issue and market renewable energy certificates (RECs) for national companies. This program can be adapted by other oil-producing countries in the Middle East such as Iraq, Iran, United Arab Emirates, and Qatar.

Learn More

Green Saudi Company for Carbon Services Established. 2017. Zawya. February 20. Accessed from https://www.zawya.com/mena/ar/story/%D8%A5%D9%86%D8%B4%D8%A7%D8%A1_%D8%A7%D9%84%D8%B4%D8%B1%D9%83%D8%A9_%D8%A7%D9%84%D8%B3%D8%B9%D9%88%D8%AF%D9%8A%D8%A9_%D8%A7%D9%84%D8%AE%D8%B6%D8%B1%D8%A7%D8%A1_%D9%84%D8%AE%D8%AF%D9%85%D8%A7%D8%AA_%D8%A7%D9%84%D9%83%D8%B1%D8%A8%D9%88%D9%86-ZAWYA20170220040349/
Green Saudi Company for Carbon Services to Focus on Emissions Reduction. 2017. Gulf News Journal. March 2. Accessed from http://gulfnewsjournal.com/stories/511086310-green-saudi-company-for-carbon-services-to-focus-on-emission-reduction
Taha. Sharif. 2017. Saudi Electricity Company Signs a Pact with PCMC to Reduce Carbon Emissions. Arab News. February 22. Accessed from http://www.arabnews.com/node/1058011/saudi-arabia

Saudi Arabia Checkup

Saudi Arabia—Falling Behind

The 2016 Climate Change Performance Index (CCPI) report concludes that Saudi Arabia has made no improvement in its overall ranking in the CCPI and places the country at the bottom of the ranking for lack of significant progress in the country’s exploiting its high potential for renewable energy instead of relying on its oil reserves. However, the report notes that the Kingdom has not blocked the Paris climate agreement.

Climate Action Tracker evaluates Saudi Arabia’s abatement target of reducing emissions by up to 130 MtCO2e in 2030 as stated in its Paris Agreement Pledge and rates this abatement target as  inadequate to make a fair contribution to keep global warming to below a  2 degree Celsius increase. It explains that this pledged abatement rate will result in an 840–1042 MtCO2e excluding LULUCF by 2030, a 70–110% increase above 2010 levels, or a 350–450% increase above 1990 levels which is insufficient to meet a minimum fair contribution to controlling global warming to 2 Celsius let alone the stronger Paris Agreement goal to 1.5 Celsius. It bases this conclusion on the uncertainty around Saudi Arabia’s targeted emissions level and the significant scaling down of its planned policies aimed at diversifying the energy mix and investments in renewable energy resources from 54 GW of renewable and 17 GW of nuclear energy by 2032 to 9.5 GW in 2023 and omitting the reference to nuclear power.

It seems that the extent to which Saudi Arabia is able to implement its proposed domestic emission reduction programs is dependent on the revenues it receives from its oil production. However, increased oil revenues means increased oil exports that will result in increased CO2 emissions in other countries.

Learn More

Burck, Jan, Franziska Marten, and Christoph Bals. 2016. Climate Change Performance Index, 2017 results. Germanwatch and Climate Action Network (CAN).
https://germanwatch.org/en/download/16482.pdf
The Intended Nationally Determined Contribution of the Kingdom of Saudi Arabia under the UNFCCC
http://www4.unfccc.int/submissions/INDC/Published%20Documents/Saudi%20Arabia/1/KSA-INDCs%20English.pdf
Climate Action Tracker
http://climateactiontracker.org/countries/saudiara

Saudi Arabia Emission Reduction Policy

Green Saudi Company for Carbon Services

In late February 2017, Saudi Arabia established the Green Saudi Company for Carbon Services. The mission of this organization is to develop and manage carbon emission reduction programs and sustainable development mechanism projects. It also will assist in the fight against environmental pollution in accordance with regional and international agreements and protocols and local regulations. The Company, a partnership between Saudi Electricity Company (SEC) and Petroleum, Chemicals & Mining Company Limited, a subsidiary of Saudi Binladen Group, represents a step forward for Saudi Arabia in its efforts to reduce emissions and control pollution. The Company seeks to help the government achieve its goals imbedded in the Kingdom Vision 2030 Plan and the National Transformation Program (NTP) 2020.

The establishment of a Company solely focused on GHG emissions is significant for several reasons.  Top senior level policy leaders represented by the Ministry of Energy, Industry and Mineral Resources, and other agencies concerned with clean energy support this initiative. Secondly, it shows the Saudi government is intent on implementing its commitment to the Paris Agreement.

The Green Saudi Company will develop clean energy and carbon reduction projects within the framework of United Nations Framework Convention on Climate Change. It also issues and markets renewable energy certificates (RECs) for national companies with clean energy projects.

Learn More

Green Saudi Company for Carbon Services Established. 2017. Zawya. February 20. Accessed from https://www.zawya.com/mena/ar/story/%D8%A5%D9%86%D8%B4%D8%A7%D8%A1_%D8%A7%D9%84%D8%B4%D8%B1%D9%83%D8%A9_%D8%A7%D9%84%D8%B3%D8%B9%D9%88%D8%AF%D9%8A%D8%A9_%D8%A7%D9%84%D8%AE%D8%B6%D8%B1%D8%A7%D8%A1_%D9%84%D8%AE%D8%AF%D9%85%D8%A7%D8%AA_%D8%A7%D9%84%D9%83%D8%B1%D8%A8%D9%88%D9%86-ZAWYA20170220040349/

Green Saudi Company for Carbon Services to Focus on Emissions Reduction. 2017. Gulf News Journal. March 2. Accessed from http://gulfnewsjournal.com/stories/511086310-green-saudi-company-for-carbon-services-to-focus-on-emission-reduction

Taha. Sharif. 2017. Saudi Electricity Company Signs a Pact with PCMC to Reduce Carbon Emissions. Arab News. February 22. Accessed from http://www.arabnews.com/node/1058011/saudi-arabia

Saudi Arabia Extreme Weather Event

Extreme Rainfall and Flash Flooding in Jeddah City

In 2009 and 2011, Jeddah City in the middle of the western region of Saudi Arabia experienced short, but intense rainfall events with rainfall precipitation values of 70 mml and 110 mml that led to flash floods. The World Bank climate adaptation expert, Balgis Osman-Elasha, defines an extreme rainfall event as one with “an intense rainfall and high quantities of rain (more than 90 millimeters) over a short span of time (four hours) over an area that normally receives 45 millimeters per year.” These flash floods had catastrophic consequences resulting in the death of 113 people in 2009 and damage to 10,000 houses and to 17,000 vehicles.

When analyzing the factors that led to the flash floods, rainfall and climate change factors played a major role contributing to the worsening of the flood disaster. Youssef et al.’s study in 2015 indicates a direct correlation between the magnitude and frequency of intense rainfall events and climate change. This result was reached by conducting a frequency analysis in which the maximum daily rainfall amount corresponding to a set of return periods of 25, 50, 100, and 200 years were calculated for the Jeddah city to determine the temporal effect of climate change on rainfall characteristics. These effects can include an increase or decrease in precipitation. A study using time-series data and descriptive statistics were used to determine the temporal trend in rainfall data and found a trend slope of 0.35, with a Pearson’s correlation coefficient (r) of 0.16, with a p-value of 0.36. These results indicate a moderate positive correlation of the annual maximum rainfall with increasing time. Based on this result, the precipitation was increased by about 27.8%. Thus, the study showed that the rainfall values changes and the increasing number of rainfall events are consequences of climatic changes. Many of the policy changes are in the form of recommendations such as conducting a detailed hydrological study of the recently-constructed human settlements that are along watercourses and at outlets downstream of wadis (valleys), and establishing a flash flood warning system for all areas that are subjected to flash floods.

Learn More

Climate Change to hit Saudi’s Agriculture, Water
http://www.scidev.net/global/desert-science/news/climate-change-to-hit-saudi-s-agriculture-water.html

Ahmed M. Youssef, Saleh A. Sefry, Biswajeet Pradhan & Emad Abu Alfadail (2016) Analysis on causes of flash flood in Jeddah city (Kingdom of Saudi Arabia) of 2009 and 2011 using multi-sensor remote sensing data and GIS, Geomatics, Natural Hazards and Risk, 7:3, 1018-1042, DOI:
http://www.tandfonline.com/doi/pdf/10.1080/19475705.2015.1012750

Saudi Arabia Media Organizations

Media organizations in Saudi Arabia don’t take a specific perspective towards climate change. Rather, they cover news of climate change activities in Saudi Arabia or other countries or publish scientific research on the impact of climate change on certain climate and geographical aspects (for example water shortage in Saudi Arabia) or specific climate change-related issues.

Broadcast Media

AlArabiya Television News channel is owned by Saudi Arabia. The current General Manager of Al Arabiya Television News channel is Turki Aldakhi who is a Saudi journalist and media figure.

Content Sample:

The title of an article published on Al Arabiya Television News channel on May 21, 2016 is, “Middle East could become “uninhabitable” due to climate change.”
http://english.alarabiya.net/en/perspective/features/2016/05/21/Middle-East-could-become-Uninhabitable-due-to-Climate-change-.html

The article warns that future climate change may destroy parts of the Middle East making it too hot for people to live in. Based on a study published by researchers at the Max Planck Institute for Chemistry and the Cyprus Institute in Nicosia, the change in temperature levels in the region could increase more than twofold with deterioration in living conditions that would force people in the Middle East, where over 500 million people reside, to leave the area. This would lead to a dramatic increase in the numbers of climate refugees.

Contact: Al Arabiya News Channel, PO Box 72627,Dubai Media City, Dubai, United Arab Emirates
Tel: +971 4 391 9999 https://www.alarabiya.net/

Print Media

King Abdul Aziz University, Center of Excellence in Climate Change Research (CECCR)

Content Sample:

King Abdulaziz University Magazine is issued by Saudi King Abdulaziz University, Meteorology, Environment, and Dry Areas Plantation, Center of Excellence in Climate Change Research.

Contact: Center of Excellence in Climate Change Researches (CECCR), PO Box 80208, Jeddah, 21589, Kingdom of Saudi Arabia, Tel: + 966 2 6952690 http://ceccr.kau.edu.sa/Default.aspx?Site_ID=902&Lng=AR

Dr. Iqbal Ismail is the director of Center of Excellence in Environmental Studies, King AbdulAziz University, Email: iismail@kau.edu.sa, Tel (mobile): + 966 (2) 505644138

Online Media

Kawn (Universe): Abdullah al-Misnid’s website on geography and climate change
http://www.almisnid.com/almisnid/article-47.html

Kawn (Universe) website is owned by Abdullah al-Misnid who is an associate professor at the Department of Geography, al-Qasim University, Kingdom of Saudi Arabia. There is no mailing address, but an online form to fill and submit.

Saudi Arabia Leaders and Opponents

Government Official
Khalid Al-Falih
Minister of Energy, Industry, and Mineral Resources, the Kingdom of Saudi Arabia

As the minister of energy, industry, and mineral resources, Mr. Al-Falih’s role is important in setting or influencing Saudi Arabia’s climate change policies.  He leads the Saudi Arabian delegation to COP 22 that comprises negotiators and subject matter experts that participate in various discussions and GCC Pavilion Side Events.

Contact: khalid.falih@aramco.com

Climate Program Advocate
Khalid Abuleif
Saudi Arabia’s Chief Climate Negotiator for the Climate Agreements

Since 1991, Khalid Abduleif has been  a member of the country’s delegation to the United Nations Framework Convention on Climate Change (UNFCCC). Currently, he is the Chief Adviser to the Saudi Minister of Petroleum and Minerals on Sustainability and Climate Policy. Mr. Abuleif is an expert on climate change policy and science. He has participated in the assessment work of the Intergovernmental Panel on Climate Change (IPCC), since 1990 and is highly knowledgeable on carbon management and carbon capture as he is leading the Kingdom’s team in the meetings of the Carbon Sequestration Leadership Forum.

Contact: Mr. Abuleif’s Linkedin account https://sa.linkedin.com/in/khalid-abuleif-6ab6b93b

Climate Program Opponent
Dr. Khalid Abdulkader
Senior Consultant within the Environmental Protection Department of Aramco

Dr. Abdulkader has expertise in fishery resource enhancement. He represented Saudi Aramco’s interests at the COP22 negotiations and might have played a role in blocking certain language or aspects in the Saudi document that represented the official government position during the climate change negotiations held in Marrakech.

Contact: khaled.abdulkader@aramco.com