The Fund aims to encourage investment in technology needed to support a stable and inclusive energy transition Image Credit: AFP

Riyadh: Saudi Aramco launched a $1.5 billion Sustainability Fund to invest in technology that can support a stable and inclusive energy transition, it said on Wednesday. It was unveiled at the sixth edition of the Future Investment Initiative (FII) and is among the largest sustainability-focused venture capital funds globally.

“Managed by Aramco Ventures, the fund is an extension of the Company’s efforts to meet the world’s growing energy demand, with lower greenhouse gas emissions,” the company said in a statement.

The fund plans to invest in technologies that support the Company’s announced net-zero 2050 ambition in its wholly-owned operational assets, as well as development of new lower-carbon fuels. Initial focus areas will include carbon capture and storage, greenhouse gas emissions, energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia and synthetic fuels. The fund will target investments globally.

“Climate change is a critical issue, which is why sustainability is well-integrated in Aramco’s strategy and investment decisions,” said Yasir O. Al-Rumayyan, Aramco Chairman. “The Company is harnessing innovation and collaboration as it seeks long-term solutions to global energy challenges.

“By driving large-scale investments and building key domestic, regional and international partnerships, Aramco aims to enable a stable and inclusive energy transition that meets the world’s need for energy with lower emissions,” he added.

Interim targets

Aramco’s wholly-owned subsidiary Aramco Trading Company has participated in the first voluntary carbon credits auction organized by the Public Investment Fund (PIF), the energy said in a statement. This comes after Aramco and PIF struck a deal to participate in a regional voluntary carbon market to be launched in Saudi Arabia in 2023.

“The Sustainability Fund reinforces our commitment to leverage innovative technologies that will make a difference in addressing the dual challenge of achieving greater energy security and sustainability, and show how these two great imperatives can and must co-exist,” said Amin H. Nasser, Aramco President and CEO. “Our participation in the MENA region’s first voluntary carbon market in Saudi Arabia represents another pathway towards our long-term net zero ambition and demonstrates how we can deliver a multi-pronged approach in addressing the climate challenges we face.”

In June, the Company announced a set of interim targets that it aims to achieve by 2035, which are intended to reduce or mitigate net Scope 1 and Scope 2 GHG emissions across its wholly-owned operated assets by more than 50 million metric tons of CO2e annually, when compared to the business-as-usual forecast.

Aramco is also developing its blue ammonia and hydrogen business, with the aim of producing up to 11 million metric tons of blue ammonia per year by 2030 — with the potential to support significant emissions reductions in hard-to-decarbonize sectors such as heavy-duty transport, heating and industrial applications.