The high price of oil and massive liquidity in the Gulf due to windfall profits have fuelled the appetite for carbon capture – with the UAE leading the charge.
Emirates Aluminium (Emal) – a joint venture between Abu Dhabi and Dubai to create the world's largest aluminium smelter – is the latest to join a growing green movement.
Emal CEO Duncan Hedditch said the company was undertaking a feasibility study, together with Masdar, to create a carbon capture and storage (CCS) scheme.
Emal, a $5.67bn (Dh20bn) project by Abu Dhabi's investment arm Mubadala and government-controlled Dubal Aluminium (Dubal), is set to produce 700,000 tonnes of aluminium per year in the first phase, which will increase to 1.4 million tonnes in the second phase.
Mubadala also owns the Abu Dhabi Future Energy Company (Adfec), the legal entity and the organisation behind Masdar.
"It's still in a very early investigations stage. We are looking at whether this is economically and technologically feasible and whether we would be able to do this," Hedditch said.
Emal already has on board an engineering, procurement, construction and management contractor – a joint venture between Canada's SNC-Lavalin and Australia's Worley Parsons.
SNC Lavalin was tapped by Masdar in February to undertake the CCS study in Abu Dhabi, which is set to be the world's largest carbon capture and storage project.
The Canadian firm has said it is close to completing a feasibility study on the Masdar project. Doug Macdonald, principal consultant in SNC-Lavalin's chemicals and petroleum business, said the UAE's CCS network would cost up to $2bn to $3bn (Dh7.36bn to Dh11.04bn). The project could reduce carbon emissions from the UAE – which is among the highest greenhouse gas emitters per capita in the world – by around 10 per cent.
The study has identified four to six projects with an approximate cost of $500m each that could be quickly executed, Macdonald told the World Future Energy Summit in Abu Dhabi earlier this year.
Reductions in the UAE's carbon emissions would come to between six million and eight million tonnes per year, he added. That is from a total of around 76 million tonnes per year of present and planned emissions in the UAE, he said.
"We have identified between six and eight million tonnes of CO2 that could be put away at very competitive costs," he said. "If you can't do it here, then you can't do it anywhere."
The aim of the project is to pump the carbon to oilfields for injection underground to maintain oil pressure and boost output, while freeing up the gas that is currently injected.
Sources close to the project said two shortlisted sites – one industrial, the other oil related – were submitted to the Supreme Petroleum Council earlier this year after an eight-month feasibility study was completed by SNC Lavalin.
The front-end engineering design is due to start in May and will take a year. Tenders for the EPC are expected in 2009. The gas will be used by Abu Dhabi National Oil Company (Adnoc) to maintain oil reservoirs by injecting it into the fields. Commissioning is expected to start in December 2010.
Meanwhile, Masdar has been looking at China both as an investment destination and as a source of technology and manufacturing expertise. It is hoping to convince Chinese firms to locate in the planned $22bn carbon-neutral Masdar city in Abu Dhabi.
France also plans to cooperate with Saudi Arabia in solar energy and in technology for CCS. The two countries will set up a joint top-level technical group in Paris by July, French Energy Minister Jean-Louis Borloo said on the sidelines of the recent International Energy Forum in Rome.
It would be a research group investigating solar technology on a large-scale and so-called CCS, carbon capture and storage technology, Borloo said after a meeting with Saudi Oil Minister Ali Al Naimi.
Some other initiatives related to CCS are currently being formed as well. Qatar, the world's largest natural gas exporter, is funding the Gulf's first carbon-credits exchange. Dubai Multi-Commodities Centre Business Park is also keen to turn Dubai into a regional centre for carbon emissions trading.
Carbon capture and storage is an approach to mitigate global warming by capturing CO2 from large point sources such as fossil fuel power plants and storing it instead of releasing it into the atmosphere.