RIYADH: Saudi Aramco is committing substantial investments in renewable energy and sustainable solutions, while stressing the continued importance of conventional energy sources to meet global energy demands, according to the energy giant’s CEO.
Speaking at the Saudi Green Initiative Forum in Riyadh, Amin Nasser emphasized the need to balance affordability, security, and sustainability in energy policies, warning of the risks of moving away from fossil fuels too quickly.
“We need to always ensure that we do have available, affordable energy. If we don’t do that, what we are introducing is more coal,” Nasser said.
He pointed out that conventional energy remains crucial in addressing global energy demand, with 60 percent of last year’s 2 percent global energy consumption growth being met by traditional energy sources.
“Thirty years ago, conventional energy was at around 83 percent; today it is around 80 percent. However, in absolute terms, we are using 100 million barrels of oil equivalent more today than 30 years ago. So there is growth,” he explained.
Nasser also noted the resurgence of coal, driven by its lower cost and security of supply. “Coal, which was supposed to have peaked and declined, is increasing mainly because its profile is security of supply for certain countries, and it is a lower cost,” he said.
Saudi Aramco plays a key role in Saudi Arabia’s renewable energy expansion, helping the Kingdom work toward its goal of generating nearly 130 gigawatts of renewable energy by 2030.
“We will be 20 to 25 percent invested in renewable energy in the Kingdom,” Nasser stated, outlining efforts to reduce the country’s reliance on liquid hydrocarbons.
“Today, we burn close to 1 million barrels of liquid. By 2030, 50 percent of that will be replaced by solar and wind, and 50 percent will be replaced by gas,” he added.
While the company is making substantial investments in renewable sources like solar, wind, and hydrogen, Nasser stressed the importance of a pragmatic, multi-source energy approach.
“We need a pragmatic solution that takes into consideration that one size fits all is not going to work. We need to be working in parallel on all sources of energy, ensuring it’s affordable, secure, and sustainable at the same time,” he said.
Nasser also noted that mandates and policies alone won’t drive the energy transition, citing the need for technological innovation to lower costs.
“The biggest obstacle, I would say, is that policy from certain parts of the world is not reckoning with realities—what’s happening in terms of the cost of energy and what needs to be done to transition away from fossil fuels over the long term. So that is a challenge,” he added.
One of the key hurdles, according to Nasser, is the high cost of hydrogen, which limits its scalability.
“Today, for blue hydrogen, you are looking at $200 to $250 per barrel of oil equivalent. And for green, you are looking at north of $400 per barrel of oil equivalent,” he said.
Despite these challenges, Saudi Aramco is making significant investments in hydrogen, including large-scale blue hydrogen projects with an aim to produce 11 million tonnes.
However, Nasser pointed out that global hydrogen production forecasts have been scaled back. “Just a year ago, the prediction for hydrogen by 2030 was 60 million tonnes. Today, if you look at all the forecasts, it’s 10 to 20 million tonnes. These are forecasts, in terms of commissioned on the ground—there are not that many,” he said.
Aramco’s broader sustainability initiatives include investments in carbon capture and storage, geothermal energy, and advanced fuels.
“We are looking at maintaining that leadership by continuing to invest in carbon capture and storage. We have a project of 9 million tonnes by the end of 2027, early 2028, to come on stream,” Nasser said.
The company is also piloting geothermal drilling and direct air capture projects with partners such as Siemens and GE, as well as developing e-fuels in collaboration with entities like a subsidiary of NEOM and Spain’s Repsol.
In addition, Saudi Aramco is leveraging its $7 billion venture capital fund to support early-stage startups focused on sustainable solutions.
“If you look at Aramco today, we have $7 billion venture capital for startups and early-stage startups. Most of that fund is for sustainable solutions,” Nasser said, underscoring the company’s commitment to innovation and long-term environmental responsibility.
While Saudi Aramco remains committed to renewable energy, Nasser reiterated the importance of a balanced energy transition that aligns with economic and technological realities.
“We are investing in all of it. But at the same time, we are investing in gas, we are investing in oil and petrochemicals. You can do all of that, but at the same time, economics will dictate what will be scaling up in terms of demand,” he concluded.
