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  • hammaad saghir

COP28: Saudi Plans to Boost Oil Demand, Challenges Fossil Fuel 'Phase-Out' Hopes




In a complex and evolving scenario, the aspirations of COP28 for a fossil fuel 'phase out' have encountered substantial challenges, as recent revelations shed light on Saudi Arabia's clandestine efforts to bolster oil demand. Investigations have uncovered Saudi Arabia's covert operation under the guise of its Oil Demand Sustainability Programme (ODSP), designed to ensure the enduring demand for oil from emerging economies.


The investigation details how the ODSP is focused on a series of programmes that would lock in future oil demand, including proposals to accelerate the development of supersonic air travel, partner with a carmaker to mass produce a cheap combustion engine vehicle for emerging markets, and promote the broader use of fossil fuel-powered ships.


When asked about the plans to develop supersonic commercial flights by an undercover reporter, a Saudi official said: "You know, supersonic aviation consumes more energy, and the market size is expected to grow significantly. So our opportunity here is to facilitate growth and development of supersonic technologies."


The revelations follow an announcement in June to the Saudi Stock Exchange of a memorandum of understanding between the ODSP and the Saudi Industrial Export Company, which initially said it would enable "activities in the fields of sustaining the demand of oil". The following day, an update was released clarifying that the intention was to allow "activities to increase energy access".


When asked by undercover reporters if the programme was designed to boost oil demand, a Saudi official admitted that was the case but argued that investment in fossil fuel infrastructure was necessary to drive development in poorer nations.


"Yes, it's one of the main objectives that we are trying to accomplish," he said. "We don't believe it's possible that [developing countries] can skip this [fossil fuel] phase because, in order to implement electric vehicles fully, you'll need a ready infrastructure.


"A lot of African countries now do not have enough grid [electricity] to support their day-to-day lives. We believe they deserve the chance to get the required energy for their development now. Then, in the future, they can work to improve or to transit into more efficient energy sources."


The ODSP's strategies are far-reaching, encompassing initiatives to secure future oil demand. These include proposals to expedite the development of supersonic air travel, collaboration with automakers to mass-produce cost-effective combustion engine vehicles for emerging markets, and the promotion of fossil fuel-powered ships. Notably, when questioned about the development of supersonic commercial flights, a Saudi official pointed out the energy-intensive nature of this sector and the significant market growth anticipated.


This revelation comes on the heels of an announcement in June regarding a memorandum of understanding between the ODSP and the Saudi Industrial Export Company, initially centred on "sustaining the demand of oil," later clarified to focus on "activities to increase energy access." The admission by a Saudi official during undercover interactions confirms that boosting oil demand is indeed a fundamental goal, with the rationale that investment in fossil fuel infrastructure remains essential for the development of less affluent nations.


Environmental advocates have expressed outrage, emphasising the importance of providing financial support to enable developing economies to transition past fossil fuel technologies and embrace cleaner, more sustainable renewable energy sources. Failure to do so may jeopardise global climate goals.


Notably, Saudi Arabia's Ministry of Energy, which is responsible for overseeing the ODSP, has remained silent in response to inquiries by Channel 4 News. Meanwhile, the COP28 team representing the UAE, although not denying business discussions during COP28 meetings, declined to provide specific comments, emphasising their focus on "meaningful climate action."


The news came as former UN climate chief Christiana Figueres criticised the UAE hosts of COP28 following reports they had used preparatory meetings for the Dubai Summit to promote fossil fuel interests.


"This is the 'Volkswagen 2015' moment for the COP28 Presidency," she said on social media platform X. "Caught red-handed, the COP Presidency has no other option but to now unequivocally step up the transparency, responsibility and accountability with which they lead the process. This COP Presidency will be under public scrutiny like no other ever before. This is a deep challenge and a transformational opportunity for them. The planet cannot afford for them to not step up."


Despite these challenges, there is some optimism surrounding plans to triple global renewables capacity, with China's clean energy sector exceeding expectations, set to achieve a record-breaking 230GW of wind and solar installations in the current year, outpacing US and European capacity growth.


Alex Whitworth, vice president and head of Asia Pacific power and renewables research at Wood Mackenzie, said: "China announced its 2060 carbon neutral target in 2020 and has been quietly re-organising the entire power sector to support rapid electrification and expansion of renewables. As we came out of COVID-19 lockdowns this year, it's impressive to see how far ahead China is. While some other markets are moderating renewables targets, China has pushed its 2025 wind and solar outlook by 43% or 380GW in just a couple of years."

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