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Petrochemicals
A sustainable future for
Gulf petrochemicals
Image Credit: Adobe Stock
Patrick Cooke, Oxford Business Group’s managing editor, Middle East and Asia discusses the importance of petrochemicals and chemicals to the Gulf’s diversification efforts, and the increasing focus of R&D efforts on sustainable products and processes.
HE RECENT TURMOIL in global commodity markets precipitated by the war in Ukraine has reignited debate in the West about the pace of the global energy transition and the risks inherent in relying on oil and gas imports from a relatively small but powerful group of large net-hydrocarbon exporters. In the Arabian Gulf – home to several of the aforementioned net-exporters – discussion is framed around how to extract maximum benefits from its remaining hydrocarbon wealth while also playing a responsible role in global efforts to both mitigate climate change and maintain stability in international energy supplies.
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Looking ahead, innovation efforts will be increasingly focused on sustainable products and processes.” 18
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Indeed, the UAE, Saudi Arabia and Bahrain have all made public pledges to achieve net-zero carbon emissions by 2050 (in the case of the UAE) or 2060. Meanwhile, Qatar has joined Saudi Arabia as a founding member of the Net-Zero Producers’ Forum – a cooperative body representing 40% of global oil and gas production, which seeks ways to harness technology to accelerate the energy transition and reduce greenhouse gas emissions from fossil fuels. One of the key ways Gulf countries plan to extract maximum benefits from their hydrocarbon wealth is by catalysing investment in downstream production and export capacity for petrochemicals and chemicals. By doing so effectively, countries in the region can diversify their export revenues, enhance the resilience of public finances, and create high-value employment for the growing mass of young and educated citizens. As shown in the recent Covid-19 Recovery Roadmap report on Innovation in the Gulf Petrochemicals Industry, produced by Oxford Business Group in partnership with the Gulf Petrochemicals and Chemicals Association (GPCA), the sector’s importance to regional
economic diversification was growing significantly in the years leading up to the pandemic. Prior to the global coronavirus outbreak, petrochemicals and chemicals contributed around one-third of the region’s manufacturing GDP, with more than 80% of local production exported beyond the region. The sector also directly supported some 613,000 jobs in 2018, equivalent to 2.4% of the GCC’s workforce. That same year, the Gulf industry invested an estimated US$438mn in research and development (R&D), supporting 7,100 jobs and US$71mn in economic activity. Between the years 2010 to 2019, R&D spending in the regional industry almost doubled, from US$293mn to US$480mn – outpacing the 42.5% rise in the global industry over the same period. Looking ahead, with the global energy transition well under way and Gulf governments firmly committed to reducing national carbon emissions, innovation efforts will be increasingly focused on sustainable products and processes.
Evolution of innovation The significant growth in R&D in the regional
