Sustainability: A nice-to-have or a need-to-have?

Tejarah Talks

BUSINESS STORIES ABOUT THINGS THAT MATTER

As part of the Ministry of Commerce, Industry and Investment Promotion’s newly launched Tejarah Talks series we sat down with Mark Geilenkirchen, CEO, SOHAR Port & Freezone to get his views on sustainable energy and environmental protection, CO2 emissions, the national Hydrogen alliance Hy-Fly, the benefits of switching to renewable energy and more.

1. Can you tell me about your role and responsibilities as a sustainability leader at Sohar Port & Freezone?

SOHAR has its own goals which run parallel to Oman’s Vision 2040 priorities for sustainable energy and environmental protection. With the expansion of the Port and Freezone, and industry in Suhar as a whole, gathering pace, we recognise the need to provide sustainable energy to support the national drive to diversify the economy and become cleaner.

2. Where is Sohar Port & Freezone on its sustainability journey?

SOHAR Port & Freezone is Oman’s largest port and industrial complex, making the need to address gas dependence and CO2 emissions essential. SOHAR has adopted renewable electricity produced by Shell’s Solar Qabas farm, as well as Al Tamman Ferrochrome, exporters Chromite Ore from SOHAR Freezone which accounts for 10 per cent of the total worldwide production of this mineral.

We have also made the decision to replace combustion with clean power where possible to reduce our carbon footprint. We are investing in green hydrogen, the most widely-acknowledged viable alternative power source.

Nearly one-third of all-natural gas produced in Oman is consumed by heavy industry. By transitioning to green hydrogen, industries in SOHAR will significantly reduce emissions and make a huge contribution to national targets.

3. How is your team structured to be able to meet the company’s sustainability goals?

Oman’s national goals have our full support. Working alongside tenants within the complex, management successfully explored how to increase synergy between the companies and used by-products of one to fuel another. For example, there are companies that produce CO2 and companies that need CO2 to boost production. Previously there had been a disconnect between the two.

Our objective is to make sure CO2 leaves our industries as a product and not as a harmful greenhouse gas. Being able to reuse resources frees up gas and other feedstock supplies for other uses and helps tenants to be more efficient, which helps businesses and SMEs to grow.

4. How do you go about setting sustainability goals knowing there are so many directions you can go in terms of trying to deliver the impact you want to see?

We are aware of our capabilities and our requirements, and the goals are set with this in mind.

In August 2021, SOHAR Port joined a national Hydrogen alliance led by The Ministry of Energy and Minerals — known as Hy-Fly.

The alliance is made up of 13 key public and private organisations —the Authority for Public Services Regulation, Petroleum Development Oman, Energy Development Oman, OQ, Oman LNG, BP Oman, Oman Shell and Total Energies Oman, Sultan Qaboos University, GUTech and the ports of Sohar and Duqm — and facilitated by PDO’s Energy Renewal Unit with the aim of working together to support the production, transportation and application of clean hydrogen for domestic use and export.

The alliance is also promoting clean hydrogen through investments, technologies, policies and expertise across the whole supply chain. SOHAR is also looking to partner with leading Italian energy companies in the development of green hydrogen and renewable energies. An agreement will offer Oman access to the latest alternative energy technology already in development in Europe.

5. How do you measure sustainability progress?

Our KPIs measure output and by-products as waste. By reducing this waste — by re-using the by-products themselves and by cutting emissions — we are able to record our progress. It is important to be realistic and we understand that initial results may be lower than where we need to get to. It is a process and there is always a beginning, but we are confident in our abilities to make the changes required.

6. When does it make sense for companies to invest in sustainability initiatives?

Right now. If companies have not already begun the process, they must do soon. This is why we are so focused on using green hydrogen across the entire complex.

The concept has been endorsed by the International Energy Agency, and while hydrogen is the most abundant element on the planet, it still needs to be produced, but then it can be transported, stored and converted into electricity.

In Oman, and across the GCC, we are very fortunate. With high-levels of sunlight every year, the potential to generate electricity is near-endless. This can be used for anything to make a difference. Powering office lights, running air-conditioning, heating water, using rechargeable batteries. Even recycling drinks cans and water bottles around the site makes a difference. Small changes lead to bigger ideas.

7. In practical terms, what is the first step Omani businesses, particularly small firms, can take on their sustainability journey?

The first step has to be to see where businesses can make positive changes. Whether it is by reducing energy requirements, or changing the primary energy source, reducing waste in packaging, office waste or waste in processes and finding ways to reuse or replace these elements of their operation.

You can even make sure all non-essential power is off at the end of the day or switch to automated lights so the buildings are not using more electricity than they absolutely need. There are more solutions to these issues, big or small, available than ever before and the cost is far more affordable than it has been in the past.

8. What do you see as the sustainability challenges facing Omani companies today?

There may be barriers to entry for some companies; processes have been the same for so long that to change to become sustainable may be considered far too expensive or disruptive. Once the change is made, however, benefits far outweigh the initial investment.

The cost of switching to renewable energy begins to pay for itself in savings in utility bills and operational costs.

There are industries where the potential to become more sustainable is genuinely more difficult than others, but this also means there could be opportunities elsewhere to off-set the emissions by improving in other areas.

9. Do you think there is a gap between consumer expectations and sustainable product availability?

There certainly has been, but demand for sustainable products has grown rapidly in recent years and companies understand the need to meet this demand. Before where it may have been considered a gap in the market to offer sustainable products, just as it was to offer organic foods at one point, but there is a growing market for these products and consumers have more of a choice than ever before.

10. Knowing which sustainability issues are of concern to consumers and which issues are growing in importance is vital information for a business looking to generate value with sustainability. How can local companies go about capturing this valuable information?

Market research is key, learning from those who have been successful already, reaching out to companies with shared goals and taking on board suggestions from customers, staff and the global market as a whole.

It is vital to know where you intend to be at the end of the journey towards sustainability, identify the potential obstacles and source viable solutions.

11. Omani consumers continue to expect more corporate responsibility, transparency and accountability from the companies they do business with — are local firms responding quickly enough?

This will vary from company to company. However, with the requirements of Oman Vision 2040 set, all companies will have to be as transparent as they can be. For some, changing processes will be more complicated than it will be for others, but given the need to change it is something businesses will have to address sooner or later.

12. What do you think it is going to take for more companies to make larger investments in sustainability?

Oman Vision 2040 is a huge incentive already; however, I think the impact on company finances is another factor. Access to materials will be another issue.

With time, these aspects can be addressed and industry, the environment and society as a whole will be better for it.

13. One final question, what is one thing that most people, maybe customers or someone who walks into your office does not know about sustainability at Sohar Port & Freezone?

Our commitment to sustainability extends way beyond just the port and freezone. Last year we funded the installation of solar panels at 100 local mosques in Suhar, reducing costs and promoting sustainability within the community.