Greenhouse gas, looming emission limit "1.5 degree target" exceeded in 30 years
Europe's attempt to increase gas production in Africa intensifies local opposition (demonstrations in Egypt, host of COP27) = AP
The 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) ended without significant progress in decarbonization efforts. According to an estimate by the Intergovernmental Panel on Climate Change (IPCC), only 400 billion tons of greenhouse gases remain to be emitted in order to achieve the Paris Agreement's "1.5 degree target," which limits extreme weather to a certain extent. If things continue as they are now, it could be exceeded by 2030. The wisdom of the world to work together to meet the decarbonization goal, which is on the brink, is being questioned in wartime.
The Paris Agreement, an international framework for global warming countermeasures, sets a goal of keeping the temperature rise within 1.5 degrees above pre-industrial levels. Crossing this line increases disaster risk.
The IPCC shows how much more carbon dioxide (CO2) emissions are allowed to reach the 1.5 degree target. Since the industrial revolution, we can only emit a total of 2.8 trillion tons, but by 2019 we have already emitted 2.4 trillion tons. The remaining allowance is 400 billion tons. Annual global emissions are around 40 billion tons, which could be exceeded in a decade.
Achieving the 1.5 degree target will require a 45% reduction from 2010 levels by 2030, and zero by the middle of this century. Major developed countries such as Japan, the United States, and Europe generally set targets in line with this analysis. The challenge is emerging and developing countries, which now account for two-thirds of global emissions, and many of them have insufficient targets.
The current COP27 consensus document merely included a statement that "we request that the targets be reconsidered and strengthened by the end of 2023." China is the world leader in emissions, India is third, and Russia is fourth. Further efforts by emerging and developing countries are essential.
The energy crisis caused by the invasion of Ukraine spread the principle of national priority, such as securing electricity and resources at a time when cooperation was necessary.
"Africa has become Europe's gas station." At COP27, the executive director of Power Shift Africa, a Kenyan think tank, expressed his dissatisfaction.
Europe, which is looking for alternative sources of Russian gas, will accelerate the development of gas fields in African countries. German Chancellor Scholz visited Senegal in May. Italy is also considering gas projects in African countries.
Gas-fired power plants emit fewer emissions than coal-fired plants, and are considered clean if measures such as CO2 storage are taken. However, it is still a fossil fuel, so I don't know if people will continue to buy it over the long term. In Africa, calls for investment in renewable energy rather than gas development are growing stronger.
In the United States, too, the tendency to prioritize one's own country continues. "Loss and damage" (loss and damage) of climate change became an independent topic for the first time at COP27. It refers to financial support for the impacts that cannot be prevented by countermeasures, such as rising sea levels and droughts due to global warming. "Agreement is difficult," Kerry said at the outset.
In the end, he gave up, but while the Biden administration is enthusiastic about climate change measures, the United States is cautious about overseas aid. This is because the approval of Congress is necessary, and the midterm elections will cause the upper and lower houses to be in a twisted state, raising the hurdles for implementing huge amounts of aid for climate change countermeasures.
There is also a series of moves to utilize coal, which emits a large amount of emissions. “Given the amount of foreign currency that can be used as fuel, our country cannot afford to buy liquefied natural gas (LNG).” Pakistani Prime Minister Shabazz Sharif said in early July: Gas-fired power accounts for just under half of the country's power generation. At present, we are increasing power generation using coal, which is cheaper than gas.
The International Energy Agency (IEA) forecasts that global coal consumption in 2023 will increase by 0.3% year-on-year to 8,032 million tons, a record high. The installed capacity of renewable energy is increasing explosively, but the 1.5 degree target is still far from being achieved.
The invasion of Ukraine further divided the world. However, the damage caused by heat waves, wildfires, floods, etc. is increasing significantly around the world, and it poses a great threat not only to developing countries but also to all countries and regions. Beyond division and confrontation, the importance of tackling the issue of climate change as a common issue for all humankind is increasing.
(Sharm El Sheikh
Saudi Aramco is also focusing on new energy fields such as hydrogen
Saudi Arabia's state-owned oil company Saudi Aramco is focusing on strategic partnerships with startups in fields such as new energy. One example is hydrogen, which is attracting attention as a decarbonized fuel that does not emit greenhouse gases when burned. We are also working on power storage technology, which holds the key to the spread of renewable energy, and are promoting the transformation of our business in response to the global low-carbon trend.
Nihon Keizai Shimbun has a business alliance with CB Insights (New York), which investigates and analyzes the trends of startup companies and venture capital investing in them. We translate the company's reports on startups and technology into Japanese and publish them twice a week in the Nikkei electronic edition.
Saudi Arabia's state-owned oil company Saudi Aramco is by far the largest in the industry, with more than three times the crude oil production capacity of second-largest Brazilian state Petrobras. It is also the world's most valuable company with a market capitalization of more than $2 trillion as oil prices approach record highs.
The company has invested in oil and gas technology, such as developing better industrial valves and specialty chemicals, to solidify its industry-leading position. But as governments move away from fossil fuels, the company is expanding into new markets through strategic acquisitions, investments and partnerships.
For example, in addition to partnering and investing in the development of industrial analytical instruments, we are also working on partnering with automakers and investing in startups to develop the hydrogen business as an alternative fuel.
Leveraging CB Insights data, we have compiled five key strategies from Saudi Aramco's recent acquisitions, investments and partnerships. Companies were categorized based on their business relationship with Saudi Aramco in these five areas.
・Cyber security
・Energy storage
·hydrogen
・Industrial analysis
・Oil and gas
Saudi Aramco strategy map (Companies that Saudi Aramco has acquired, invested in, or partnered with since 2020. However, it does not cover their activities)
cyber security
Saudi Aramco has been the target of cybersecurity threats and attacks in the past. The first large-scale attack was in 2012 with the computer virus Shamoon. About 30,000 of the company's workstations were damaged, and it took more than a week for the network to recover.
Cyberattacks continue to be a threat, and Saudi Aramco is investing in and partnering with other companies to develop cybersecurity technology.
Sensors and all-things-connected "Internet of Things" devices are becoming increasingly essential in the oil and gas industry, but their connected nature makes them easy targets for attacks. In October 2020, Saudi Aramco partnered with French electronics giant Schneider Electric to develop cybersecurity digitization and automation technology. The two companies have opened research centers in Saudi Arabia.
Saudi Aramco has also invested in many startups in this space. For example, in 2021 it invested in Xage Security and AttackIQ. Zage Security will strengthen its protection with an authentication system powered by blockchain (distributed ledger). AttackIQ helps businesses discover known attackers and set security rules to stop them.
energy storage
Power generation from renewable energies such as solar and wind power is being developed on a large scale around the world, from Ireland to Costa Rica. But such energy is volatile and must be combined with some form of energy storage to provide a steady supply.
Saudi Aramco is actively investing in energy storage to address the issue of renewable energy security, such as “gravitational storage,” which converts electricity into potential energy and stores it, and new batteries such as nickel-metal hydride.
In August 2021, it participated in a $100 million Series C mega round (a round that raises more than $100 million at a time) with Energy Vault in Switzerland. Energy vaults use gravity as a form of energy storage, lifting a concrete block up high to store it as potential energy and dropping it down to release it as kinetic energy. The company went public in February 2022 via a special purpose acquisition company (SPAC).
It also invested in a $125 million Series A in EnerVenue. EnaVenue uses nickel-metal hydride batteries instead of lithium-ion batteries to store energy for the grid. Nickel-metal hydride has been used in space exploration for decades, but its high cost has hindered its adoption in other fields. EnaVenue says it has figured out a way to significantly reduce the cost of nickel-metal hydride batteries, allowing them to be used to store electricity in the power grid.
hydrogen
Hydrogen is emerging as a sustainable alternative energy. Production using renewable energy can completely eliminate carbon dioxide (CO2) emissions over the entire life cycle (this is called green hydrogen).
Saudi Aramco is preparing to move away from fossil fuels by partnering with and investing in companies that produce and use hydrogen.
For example, it is actively investing in a green hydrogen startup, Utility Global. Utilities Global will reduce the production cost of green hydrogen with its proprietary "oxide ion chip", making it competitive with existing energy sources.
In March 2021, it partnered with South Korean shipbuilding giant Hyundai Heavy Industries. It will build a production facility for "blue hydrogen" that captures the CO2 generated during production and provides hydrogen fuel for industrial processes. Blue hydrogen is produced using fossil fuels, but by recovering and storing the emitted CO2, emissions are virtually zero.
It is also looking to promote the use of hydrogen fuel. In 2022, it announced that it would partner with South Korea's Hyundai Motor to develop a hydrogen-fueled vehicle.
industrial analysis
Oil fields are not just about oil and gas wells. There are many industrial elements that support the production lifecycle, from pre-extraction fluid conditioning to wastewater treatment to on-site power generation.
Saudi Aramco is eyeing industrial analytics startups to boost the productivity of its gigantic production facilities. For example, in August 2020, it participated in Parsable's Series D ($60 million). Persable's platform digitizes tasks and documents for oil field workers. Work procedures and training documents are placed in the app, and IoT sensors track worker progress to provide insights that help improve productivity.
Similarly, in 2021, it partnered with industrial IoT (IIoT) startup Seeq to digitize oilfields. Saudi Aramco has installed Seek's sensors and software in its production facilities. The aim is to improve the performance of production sites and obtain new knowledge through predictive analysis models.
It has also invested in Foghorn, a U.S. company that develops software for IIoT platforms, since its inception. Foghorn's edge analytics platform leverages artificial intelligence (AI) to generate insights based on data collected by IIoT sensors. Saudi Aramco participates in Foghorn's Series A, B and C. Foghorn was acquired by American air conditioning giant Johnson Controls in January 2022.
oil and gas
Oil and gas remains Saudi Aramco's main source of revenue, with upstream exploration and production operations accounting for more than 90% of revenue. The company is aggressively investing in, partnering with, and acquiring oil and gas tech companies to maintain its leadership in this space.
As the company focuses on the upstream sector, it has a star system that increases oil field production efficiency and prevents equipment failure.
invested in toup. Oilfields, for example, use many valves to regulate flow from pipelines, which is essential to maintaining the efficiency of oil and gas production. Saudi Aramco is investing in startups to take advantage of cutting-edge valve tech.
Clarke Valve's "shutter valves" reduce leakage to prevent damage to other equipment such as turbines and increase efficiency. Saudi Aramco participates in the company's Series B, C and D.
Toxic substances are also discharged from oil fields as they are produced. That's why it also invests in companies that remove toxic pollutants and greenhouse gases from emissions.
For example, Switzerland's Daphne Technology makes gas purifiers that are installed where the gas is emitted. This reduces emissions of toxic substances such as nitrogen oxides (NOx) and sulfur oxides (SOx). Saudi Aramco has participated in multiple funding rounds for Daphne. Most recently, it invested in a Series B ($11 million) in October 2021.
It also strengthens its downstream chemical business through partnerships and acquisitions. In 2022, it acquired the business unit Valvoline Global Products (VGP) from Valvoline of the United States. VGP is a leading manufacturer of automotive and industrial lubricants and chemicals. Saudi Aramco is leveraging Valvoline's brand recognition with the acquisition while expanding its chemical portfolio.
