Fireside chat with ADNOC's Musabbeh Al Kaabi

Thank you, Fred, and it gives me great pleasure and honor to participate again in the Atlantic Council event. Welcome everyone to the UAE and Dubai. It's great to have these conversations along with COP28. I made the move earlier this year when Dr. Sultan called me and said he has a mission to transform, decarbonize, and future-proof ADNOC, and he wanted my support. ADNOC and Mubadala share the same shareholder, so I moved within the family with everyone's blessing. Let me highlight my role: ADNOC has acknowledged the energy transition and decarbonization. Our vision is to decarbonize the energies of today and invest in the energies of tomorrow. When you look at energy demand until 2050, oil and gas will have a contribution. The big challenge is ensuring low carbon intensity for hydrocarbons. ADNOC has a great story: we've reduced our carbon intensity to 7 kilograms per barrel equivalent, compared to the industry average of 40 kilograms. If the rest of the industry improves to our level, 1.8 gigatons of CO2 could be avoided, equivalent to the total emissions from aviation and shipping. This is a quick win for the energy transition. We're expanding carbon capture to 10 million tons by 2030, doubling renewables with Masdar's shareholding, active in almost 40 countries with over 20 gigawatts of capacity, and building to 100 gigawatts by 2030. I'm confident we'll achieve that, positioning Masdar as a leading renewable energy company globally. So, our job is to decarbonize today's energy and build tomorrow's.

The reality is clear. Today, the world consumes around 260 million barrels of oil equivalent daily: 100 million from oil, 70 million from natural gas, and 80 million from coal. Fossil fuels contribute slightly over 80% of total energy. Since sustainable development was introduced in 1987, fossil fuels have gone from 86% to 80% of energy. From 1987 to 2023, we still rely on fossil fuels to meet demand. Energy demand keeps growing; for example, sending an email consumes energy—a short email produces 3 grams of CO2 equivalent, an attachment up to 27 grams, and with artificial intelligence, it increases further. Our lifestyle is energy-intensive, like using Google or YouTube. To achieve targets by 2050, a collective effort is needed; every carbon atom counts. We must look at all lifestyles and energy consumption for a balanced view. Artificial intelligence will add more energy demand. Today, the world is about energy consumption, and coupling that with energy security, transition, and affordability presents a challenging picture. From 86% in the 80s to 80% now, what should the goal be in 20 years? I don't have the answer, but looking at projections, we need the lowest carbon-intensive fossil fuel energies of tomorrow, which is our mandate. Additionally, we need all options: solar, wind, and technologies for battery storage.

Let me thank the COP28 team for a remarkable job. They launched something very relevant to our industry: the Global Decarbonization Accelerator. This is critical because for the first time, it brings many companies with over 50% of global production to have a clear roadmap to 2030 and 2050. We need short-term, midterm, and long-term targets. Bringing major players like ADNOC, Aramco, Exxon, Oxy, and national oil companies under one umbrella with a clear roadmap to achieve zero methane by 2030, triple commitments to renewables and low-carbon solutions by 2030, and achieve net zero by 2050 or earlier is remarkable. If delivered, this will have a tangible impact on addressing climate issues.

I strongly believe it's in everyone's interest and the climate agenda to stop pointing fingers and adopt an inclusive approach. Every carbon atom counts: if carbon capture helps, let's do it; if hydrogen expansion helps, invest in it; if solar works, pursue it. We need a pragmatic way to address climate. Let's not underestimate human innovation—when faced with a challenge, we act. Three years ago, we couldn't have gathered like this due to COVID-19, a major threat. In less than two years, we came together to address it. I'm confident we will do the same for climate, embracing the right technologies. Inclusiveness and acting together are critical, and I'm confident we will deliver.

The strategy is clear: we set targets for decarbonization, announcing a 25% reduction in carbon intensity by 2030. We have a strong carbon capture portfolio; today, we have projects FID or in operation for around 4 million tons, positioning us as a leader in traditional energy companies for carbon capture without any regulatory framework or incentive. In the US, the IRA is a great tool; if I were there, I would expand more due to the right tools. But because of ADNOC's legacy and commitment to sustainability, we take steps to ensure our products remain the lowest carbon-intensive in the market. For hydrogen, we target around 1 million tons of low-carbon hydrogen by 2030. We're electrifying our operations, and the debate with my committees is that these practices and investments often have low IRR, requiring conviction about market reactions and strong leadership. I'll share a story: we announced the first successful geothermal project in the MENA region for district cooling. Initially, people were skeptical, but we persisted, similar to early Masdar days in 2008 when solar costs were high. Now, the last project in Abu Dhabi costs 1.4 cents per kilowatt hour. Today, 10% of Masdar City's district cooling comes from geothermal, with huge potential since 70% of power consumption in summer is for air conditioning. This achievement required conviction and staying the course.

Indeed, it does. I applaud the US government for introducing the IRA; it's a great initiative enabling the ecosystem to work. With time and efficiencies from technology, it will become sustainable. Today, the IRA is there because of cost challenges. I've seen the ETS in Europe and the adoption of CFDs (contracts for difference). We're having good conversations with players in the US. We announced collaboration with Oxy on direct air capture or carbon capture and utilization. I'm confident that for energy transition, we need government policies and technology. Under the IRA umbrella, we're on the technology side, and I remain optimistic that with time, we'll see more efficient ways of producing hydrogen, renewable energy, and carbon removal. Lastly, we launched the decarbonization challenge with climate tech in May, receiving an unbelievable 650 applications from startups worldwide, including two from this country. I'm optimistic that technology will help improve decarbonization technologies.