Abu Dhabi is an oil powerhouse, but it also wants to be a climate technology hub

CNN
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Abu Dhabi has no intention of weaning itself off the oil that made it super-rich. But it is using some of that wealth to support startups that are trying to find solutions to the climate crisis.

In April, Abu Dhabi’s Hub71 tech ecosystem announced its first program to support decarbonization technologies, with five startups focusing on solutions for sectors ranging from energy to aquaculture.

“The climate agenda is very important to the UAE’s leadership,” Ahmad Ali Alwan, CEO of Hub71, which is backed by sovereign wealth fund Mubadala Investment Company, told CNN. “That’s why we’ve identified it as a priority sector that we want to enable.”

“There is a lot of support for innovative solutions,” he said, “and a push to develop solutions that are truly commercial.”

The United Arab Emirates, a federation of seven emirates including Abu Dhabi and Dubai, was the first Gulf country to commit to achieving net-zero carbon emissions by 2050. In recent years, Abu Dhabi has committed tens of billions of dollars to support renewable energy projects and carbon-reduction technologies, and has restored some 6,400 hectares of mangroves that can absorb carbon dioxide from the atmosphere.

Alwan says about 20 of the more than 220 startups involved in Hub71’s programs fall into the sustainability and climate tech category. Now that the ecosystem has a program dedicated to these companies, he expects that number to grow.

Hub71 plans to announce a new recruitment drive later this year. The company reports that applications from startups focused on sustainability and climate technology have doubled since its last recruitment drive.

Abu Dhabi is far from abandoning fossil fuels. Oil production accounts for about 46% of the country’s economy.

The UAE, a member of the Organization of the Petroleum Exporting Countries (OPEC), has been at odds with the group’s leadership in recent years. OPEC and its allies have been restricting oil production to prevent a glut and boost prices. Meanwhile, the UAE has been pressuring the alliance to raise production quotas.

State oil giant Adnoc wants to increase its production capacity to five million barrels a day by 2027. According to S&P Global, the company will spend $150 billion to achieve this goal.

Abu Dhabi’s continued dependence on oil has raised doubts in some quarters about the country’s commitment to decarbonisation.

But experts say the government is planning ahead to transform its economy. Patricia Keating of consulting firm PwC Middle East told CNN the government has developed a forward-looking diversification strategy that focuses on how it can grow sustainably.

“Abu Dhabi is starting to emerge as a leading climate technology cluster in the region,” she added.

She added that the city has a strong presence of venture capitalists and investment funds, attractive regulations and corporations that need to decarbonize, which gives it an advantage in the area of ​​climate technology.

Companies in Hub71’s newest group include a startup that provides oil and gas engineers with real-time recommendations on how to reduce emissions, and another that focuses on reducing gas flaring — the burning or release of natural gas extracted from the ground during oil production, which contributes to climate change.

Another company, Graphmatech, is a spin-off of Sweden’s Uppsala University. Its founders say graphene technology could make the hydrogen industry more sustainable, efficient and safer.

When hydrogen is burned or used in a fuel cell, the main byproduct is water instead of the carbon dioxide that heats the atmosphere. This makes the energy source cheaper option in terms of emissions compared to other fuels that pollute more.

The fact that Abu Dhabi has invested its potential and oil wealth in climate technology is a major attraction for Graphmatech.

“Financial support is needed to scale up climate technology,” said Dr. Mamoun Taher, its founder and CEO told CNN. “Abu Dhabi is known around the world for having financial muscle.”

Experts believe that green hydrogen, which is produced using renewable energy can play an important role in decarbonising hard-to-abate sectors such as heavy industry and long-distance transport.

Countries from the United States to Australia are working to develop their own hydrogen industries, and the UAE aims to become one of the largest producers of this element in the world by 2031.

It plans to produce “low-emission” hydrogen generated from a variety of sources, including renewable and nuclear energy, as well as fossil fuels, combined with carbon capture and storage.

Hydrogen technology is being developed in the UAE. Masdar and Emirates Steel Arkan are developing a pilot project to demonstrate the feasibility of using green hydrogen instead of natural gas to produce steel. Steel production accounts for about 8% of global emissions.

Hydrogen, though, is known to leak. This is not only wasteful, but can also lead to explosions and exacerbate global warming.

Taher says his graphene technology can reduce hydrogen leakage by up to 85%. His company has begun talks with key stakeholders in Abu Dhabi, including oil and gas companies.

“What sets Abu Dhabi apart is our access to pioneers using our technology,” he said.

Companies like Adnoc, Siemens Energy and Abu Dhabi National Energy Company (TAQA) are supporting Hub71 by providing funding, committing to pilot programs with promising solutions, or both — potentially allowing climate startups to use the UAE as a testing ground for their technologies.