A profound energy transformation is underway in the Middle East, as the region aims for net zero emissions and embraces sustainable energy practices to foster economic diversification. Driven by abundant solar and wind resources and increasing global demand for clean energy, significant investments are flowing into solar and wind projects, as well as the production of green fuels like hydrogen and green steel. This strategic shift seeks to reduce fossil fuel dependence and unlock new economic opportunities. However, as the Middle East navigates this transition, it faces challenges, such as modernising infrastructure and managing economic impacts, critical to maintaining its leadership in global energy innovation and sustainability.
The energy transition in the region is underpinned by ambitious national visions and substantial investments across six key decarbonisation levers: energy efficiency, electrification, renewables, new energies (such as green hydrogen), carbon capture and forestation-related offsets. These efforts are vital for reducing carbon emissions and building a sustainable economic future.
Managing carbon emissions effectively is a critical task for governments around the world. It is complex with diverse stakeholders involved, often leading to fragmented and ineffective outcomes.
At PwC Middle East, we have developed a comprehensive National Carbon Management Framework that begins with the physical value chain, focusing on identifying and managing emission sources. Today’s industrial players, under increasing pressure to minimise their carbon footprints, are turning to improved efficiency, carbon credits and direct emission capture.
To facilitate progress, robust ecosystem enablers are necessary, especially from the government. A detailed carbon regulatory framework must be established to provide clear governance, standards, guidelines and a mix of incentives and obligations that drive decarbonisation efforts. Moreover, establishing a carbon credit or trading platform is essential for rewarding efforts and allowing emission offsets where reduction is not feasible.
The battle against carbon emissions is among our most pressing challenges. Effective government action, integrating essential elements into a national carbon management framework and fostering public-private collaboration, will be crucial. This approach will not only move regional economies from aspirations to tangible actions, but also encourage innovation and investment in green energy, driven by supportive regulatory frameworks and incentives.
Investment in renewable energy in the Middle East has increased by an average of 19% each year from 2019 to 2022, more than twice the growth rate seen in other advanced economies
Renewable energy investment in the Middle East is set to surge by over 250%, reaching an estimated $100 billion from 2023 to 2030, compared to $28 billion in the prior eight years
The Middle East oil and gas industry aims to reduce operational emissions by 50% by 2030 through efficiency improvements, electrification and renewable energy integration
Together, we can transform the Middle East and unlock inclusive growth through sustainability.
Partner, Strategy& Middle East
Neil O'Keeffe
Jon Blackburn
Shantanu Gautam
Principal, Strategy& Middle East