As part of the Ministry of Commerce, Industry & Investment Promotion’s newly launched Tejarah Talks series we sat down with Dr Firas al Abduwani, Vice President, Clean Energy, OQ Alternative Energy to get his views on Oman’s commitment towards sustainability, corporate responsibility, transparency, accountability, EU carbon border adjustment mechanisms and more.
Can you tell me about your role and responsibilities as a sustainability leader in Oman?
OQ is Oman’s flagship integrated energy company. Historically its operations covered upstream oil and gas, gas network, downstream refineries and petrochemicals in addition to trading. As part of its energy transition, OQ has established operations in upstream renewable energy, collaborates on electrical transmission, deploys downstream green molecule projects and leverages on existing trading strength. Additionally, energy optimisation and efficiency have been prioritized as part of OQ’s toolkit in its energy transition.
OQ has taken its sustainability goals seriously. It has transformed its mindset and added a new pillar charting its path in the energy transition. It is looking into its historical pillars and setting a path for their decarbonisation.
Our role continues to set a benchmark in the industry and helps to facilitate Oman’s sustainability targets in the areas we cover.
Who or what inspires you to act on sustainability?
Acting on sustainability is a responsibility that is inspired and driven by multiple factors. On the human level, it is driven by survival not only of the current generation but future generations as well. This is captured in Oman Vision2040 which sought feedback from the public. This collaborative and ambitious document acts as inspiration as we work towards a more sustainable world.
Where is Oman on its sustainability journey?
The Sultan Qaboos Environment Award was established in 1989 and is the first Arab award in the field of environment. This demonstrates Oman’s early commitment to sustainability. Fast forward to today and we see that Oman is establishing the ESG guidelines required of publicly listed companies.
By 2040, Oman hopes to be listed among the top 20 countries in the Environmental Performance Index. Oman further sees importance in placing sustainability as an opportunity. We are endowed with some of the best renewable energy resources on Earth and are well placed to be a global leader in generating, consuming and exporting green molecules. This has been articulated in a mandate for OQ as a state owned enterprise to facilitate the development of green molecules, maximising the value captured by Oman over different time horizons, creating employment opportunities, developing capabilities and enabling further downstream projects through industrial hubs. Further articulating Oman’s sustainability and decarbonisation commitments will send a strong market signal which the private sector can harness to develop their own path.
How do the companies you work with measure sustainability progress?
At OQ we started by identifying what sustainability means to us. Accordingly, we set about establishing a baseline for us to benchmark against, we then set our target and the planned path towards this target. Let us take the decarbonisation element — here we started by assessing our carbon footprint across all our assets and have been publishing this data since 2019 in our Sustainability Report. We internally discussed our long-term objectives — say the 2050 objectives, we then put in place the plan that would get us from 2019 to 2050 through a set of milestones. It is crucial we have both a long-term objective and clear short-term objectives.
Other than simply decarbonising existing assets via Energy Excellence and Clean Energy, we further looked into building products and solutions to create value via the Green Molecules pillar. Each of these three pillars within OQ Alternative Energy have their targets that we track and measure against our established baseline.
What do you see as the sustainability challenges facing Omani companies today?
One of the challenges in any newly transitioning market is ensuring you ride the crest of the Energy Transition wave. Not to be too far ahead, run out of steam too early and get overtaken and crushed by the wave, nor be too late and miss the wave all together. And to be able to assess where the wave is one needs to have clear market signals. These are either created and communicated by policy makers as national objectives, or market driven. Personally, I find it challenging from a private Omani company perspective to map out a wave timeline when I do not see sector targets set for the long-term and more importantly on the short-term horizon. These targets need to be delivered with sufficient time for the market to adapt.
Do you think there is a gap between consumer expectations and sustainable product availability?
It is a great question, and one I would direct back to the media. Running survey campaigns for certain market segments, sectors and products in the domestic market would help address this question. For companies with a customer base outside Oman and in particular those with set net-zero targets translated into short-term targets, would have a clearer response. We already see financial markets shifting away from funds, companies, projects and opportunities that do not meet their ESG and sustainability mandates. On a similar note, we know of the EU’s intent to impose a Carbon Border Adjustment Mechanism (CBAM) that will prevent the risk of carbon leakage and support the EU's increased ambition on climate mitigation, while ensuring WTO compatibility.
I would further rephrase the question as to whether there is a gap between consumer expectations and sustainable product affordability rather than availability. Take green hydrogen and its derived products for example. They are readily available at around 2x to 6x the price of grey hydrogen. Would consumers accept this product at this point in the product’s learning curve? Mechanisms such as CBAM enable such adoption, and we’re diligently observing and contributing to this discussion and development.
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?
In addition to capturing issues that are of concern to consumers and issues of growing importance, it is essential that local companies understand the transition strategy of customers in different global markets. The path to net-zero is a four-decade marathon in which different elements are being phased. While products and services are being phased for decarbonisation — getting the timing right will be vital.
This information is publicly available. High-profile sustainability forums have statements and announcements from different nations and businesses. Consultancy and market intelligence firms publish reports on areas of the economy that are being decarbonised as well as identify the technologies and start-ups driving these advancements.
What do you think it is going to take for more companies to make larger investments in sustainability?
For companies to make larger investments in sustainability — in the context of environment or planet — they need to ensure that holistically — people-planet-profit — this investment is sustainable. Some of the parameters that help make this shift is supplier driven, however most would be consumer and policy driven. If there is a true demand for more environmentally friendly products and services, the market will provide it. As such it is more of how we as a global community can move collectively towards that objective.
One final question, what makes you optimistic about the ability of Omani businesses to rise to the sustainability challenge?
I am optimistic. I firmly believe our market will adapt to sustainability requirements. I also believe global market leaders will emerge from Oman. This will be the result of ingenuity and perseverance, coupled with the natural and human resources we are blessed with. Another key factor supporting our sustainability ambitions will be government policies — policies designed to help local companies succeed. Indeed, as the world moves through this energy transition, sustainability and the circular economy will be at the heart of all our operations.
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