Saudi Aramco, Saudi Arabia's national oil, gas, and chemical company, is now creating a $1.5 billion fund to invest in climate tech.
Aramco's $1.5 billion Sustainability Fund will be among the world's largest and will be run by the company's corporate venture capital arm, Aramco Ventures.
The fund will invest in technologies in technologies that support Aramco's mission to be net-zero for its wholly owned operational assets and develop new, lower-carbon fuels, according to a statement.
Critically, those goals fall short of a pivot entirely from producing fossil fuels, something that's necessary if the world is to come anywhere close to reducing greenhouse gas emissions enough to prevent catastrophic global warming.
Aramco said the new fund will invest globally in technologies like: carbon capture and storage, greenhouse gas emissions, energy efficiency, nature-based climate solutions, "digital sustainability" (whatever that means), hydrogen, ammonia and synthetic fuels.
Aramco's also pushing for the development of voluntary carbon offset markets in the Middle East starting with its own auction organized by the nation's Public Investment Fund.
“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," Aramco President and chief executive Amin H. Nasser, said in a statement. "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.”
Aramco's plans for reducing its greenhouse gas emissions hinge largely on carbon capture and storage technologies, the production of "blue" ammonia, and the creation of circular economy for carbon dioxide that would come from the capture and reuse of the gases already in the atmosphere.
One hitch in these plans is the fact that blue ammonia is based on hydrogen produced from natural gas -- which would require the extraction of more fossil fuels. There are alternative, "green" hydrogen sources where the fuel is produced using renewable energy instead of fossil fuels.
A number of startups and large industrial companies -- including some of Aramco’s fellow supermajor oil companies -- are trying to develop a green hydrogen strategy.