Oman’s

Journey to
Net Zero
An Environment for Enterprise?

Sultanate of Oman ‫ﺳﻠﻄﻨــــــﺔ ُﻋﻤـــــــــﺎن‬

 OMAN’S NET ZERO
STRATEGY, SKILLED
WORKFORCE,
FAVOURABLE WIND
AND SOLAR CONDITIONS,
STRATEGIC LOCATION
AND SUPPORTIVE
REGULATIONS MAKE IT
A COMPELLING GLOBAL
INVESTMENT HUB FOR
SUSTAINABLE INITIATIVES.
HE IBTISAM AL FAROUJI
Undersecretary, Investment Promotion
Ministry of Commerce, Industry & Investment Promotion

Get to know us
obf.om
@ombusinessforum
 Tejarah Talks Oman’s Journey to Net Zero 4 5

Panelists

About Tejarah Talks

Tejarah Talks is organized by Oman Business Forum
in association with the Ministry of Commerce, Industry
& Investment Promotion. With a firm focus on Oman’s
current and future business, export and investment
environment, Tejarah Talks is a series of informal,
interactive evening discussions that brings together
some of Oman’s most inspirational and innovative Walter Simpson Ammar Al Kharusi
Managing Director Group Head of Development
thinkers and doers to share their stories, insights and CC Energy Development OMRAN Group
ideas with an enthusiastic crowd. It is a platform for
positive interaction.

Sultanate of Oman ‫ﺳﻠﻄﻨــــــﺔ ُﻋﻤـــــــــﺎن‬

Fadi Al Shihabi Hilal Al Ghaithi

KPMG Partner Director, Energy
& ESG Services Lead Authority for Public Services Regulation

Supporters
Tejarah Talks is generously supported by:
Tejarah Talks ‘Oman’s Journey to Net Zero: An Environment for
Enterprise?’ 17 May was moderated by His Highness Sayyid
Lead Supporters Podcast Supporter
Dr. Adham Al Said, Managing Partner, The Firm. The panellists were
Walter Simpson, Managing Director, CC Energy Development;
Ammar Al Kharusi, Group Head of Development, OMRAN Group;
Fadi Al Shihabi, KPMG Partner & ESG Services Lead; and Hilal Al
Ghaithi, Director, Energy, Authority for Public Services Regulation.
Supporters
 Tejarah Talks Oman’s Journey to Net Zero 6 7

What’s Net Zero?

What’s the Timeframe?
Recent research from the Intergovernmental
Panel on Climate Change (IPCC) suggests
limiting warming to 1.5 degrees C depends
on CO2 emissions reaching net zero between
Put simply, net zero means cutting greenhouse gas (GHG) 2050 and 2060. Reaching net zero earlier in
emissions to as close to zero as possible, with any that range avoids a risk of temporarily
overshooting 1.5 degrees C.1 Critically,
remaining emissions re-absorbed from the atmosphere, the sooner emissions peak and the lower they
by oceans and forests. Science shows clearly that in order are at that point, the more realistic achieving
to avert the worst impacts of climate change and preserve net zero becomes. This would also create less
a liveable planet, global temperature increase needs to reliance on carbon removal in the second half
of the century.2 This does not suggest that all
be limited to 1.5°C above pre-industrial levels.
countries need to reach net zero emissions at
Currently, the Earth is already about 1.1°C warmer than the same time.
it was in the late 1800s and emissions continue to rise.
To keep global warming to no more than 1.5°C – as called However, the chances of limiting warming to
for in the Paris Agreement - emissions need to be reduced 1.5 degrees C depend significantly on how
soon the highest emitters reach net zero.
by 45% by 2030 and reach net zero by 2050. Equity-related considerations - including
responsibility for past emissions, equality
in per-capita emissions and capacity to
act - also suggest earlier dates for wealthier,
higher-emitting countries. Importantly, the
timeframe for reaching net zero emissions is
How Can Net Zero Be Achieved?
different for CO2 alone versus for CO2 plus
Transitioning to a net zero world is one
other GHGs like methane, nitrous oxide and
of the greatest challenges humankind
fluorinated gases. For non-CO2 emissions,
has faced. It calls for nothing less than
the net zero date is later, in part because
a complete transformation of how we Emissions, such as
models assume that some of these emissions
produce, consume and move about. methane from
- such as methane from agricultural agriculture, are more
The energy sector is the source of
sources - are more difficult to phase out. difficult to phase out
around three-quarters of GHG emissions

45%
However, these potent but short-lived gases
today and holds the key to averting the
will drive temperatures higher in the
worst effects of climate change.
REDUCTION IN EMMISSIONS near-term, potentially pushing temperature
Replacing polluting coal, gas and
change past the 1.5 degrees C threshold
oil-fired power with energy from
much earlier.3
renewable sources, such as wind and
solar, would dramatically reduce
Because of this, it is important for countries
carbon emissions.
CO2 to specify whether their net zero targets
cover CO2 only or all GHGs. A comprehensive
net zero emissions target would include all
NET ZERO
GHGs, ensuring that non-CO2 gases are also
reduced with urgency.
 Tejarah Talks Oman’s Journey to Net Zero 8 9

COP28: Building Momentum

As we prepare for COP28 (30 November -
12 December 2023) in Dubai, global momentum
for setting net zero targets has accelerated.
As of November 2022, around 140 countries,
including the Sultanate of Oman, have announced
or are considering net zero targets, covering close
to 90% of global emissions compared to
130 countries, covering about 70% emissions,
in May 2021.4 And as of September 2022, 11,309
non-state actors including 8,307 companies,
595 financial institutions, 1,136 cities, 52 states

2.8°C
Temperature rise by the end of the century
and regions, 1,125 educational institutions and
65 healthcare institutions had joined the UN’s Race
to Zero - the largest ever alliance committed to
achieving net zero carbon emissions by 2050 at
the latest.5

Is The World on Track?

Sadly, no. Despite the enormous
benefits of climate action to date,
progress is happening too slowly
for the world to hold temperature
rise to 1.5 degrees C.6 The UN finds
that climate policies currently in
place point to a 2.8 degrees C
temperature rise by the end of
the century.7
 Tejarah Talks Oman’s Journey to Net Zero 10 11

Green Opportunities
Getting to net zero will require rapid change and
large-scale technology deployment across multiple
industries – a transition that will create opportunities
to build entirely new businesses.

Research has found that reaching net zero by 2050 could entail
a 60% increase in capital spending on physical assets, compared with
current levels. The required investments amount to US$9.2 trillion
per year until 2050, of which US$6.5 trillion annually would go into
low-emissions assets and enabling infrastructure.8

The research also shows that growing demand for net zero offering
could generate more than US$12 trillion of annual sales by 2030
across 11 value pools, including transport (US$2.3 trillion to
US$2.7 trillion per year), power (US$1.0 trillion to US$1.5 trillion) and
hydrogen (US$650 billion to US$850 billion).9 Such a transformation
of the global economy could create significant growth potential for
climate technologies and solutions.10
The required investments
Addressable Market Size 2030 2,300 - 2,700
amount to US$9.2 trillion
$ Billions 1,300 - 1,800
per year until 2050
1,000 - 1,500

1,100 - 1,200
Building green businesses is top of mind
850 - 1,200
for many leaders. In McKinsey’s State of
550 - 1,200
New Business Building report, 92% of
650 - 1,150 executives say that new businesses built
650 - 850 in the next five years will address
300 - 400
sustainability to some extent - and 42%
expect to put sustainability at the centre of
250 - 300
their new businesses’ value proposition.11
100 - 200

Industrials Hydrogen Agriculture Water Building

& Land Use

Carbon Waste Oil / Gas / Consumer Power Transport

Management Fuels
 Tejarah Talks Oman’s Journey to Net Zero 12 13

Green Jobs
The renewable energy sector is already a
major global employer. A report from the
International Renewable Energy Agency
states there are 12.7 million jobs in renewable
with solar energy leading the way with 4.3
Jobs that have a direct, positive impact on the planet million jobs worldwide. New clean energy
traditionally involve renewable energy, electric transport, projects also drive employment in other
sectors, such as workers employed to build
energy efficiency or nature conservation. But right now, and deploy new solar plants, wellheads, heat
as more sectors transition to low-carbon models, every pumps and more.14
job has the potential to become “green”.
The outlook looks even more promising.
The IEA estimates that 14 million new clean
Dele ut Facias energy jobs will be created by 2030 with
According to the International Labour Organization (ILO) the another 16 million workers switching to new
transition to the green economy will inevitably involve destruction roles related to clean energy.15 It is therefore
of some jobs, but at the same time, create new ones. The ILO no surprise that wind turbine technicians
estimates that about 100 million new jobs can potentially be (up 44%) and solar panel installers (up 27%) The International
created by 2030, leading to a net job creation of 25 million jobs.12 Renewable Energy
are predicted to be among the fastest Agency states there
But what do we mean by “green economy”? The definition is broad, growing occupations in the US between are 12.7 million jobs in
according to the United Nations Environment Program, the green now and 2031.16 renewable with solar
economy concerns all economic activities that lead to energy leading the
way with 4.3 million
“an improvement in human well-being and social equity while
jobs worldwide
reducing significantly environmental risks and the scarcity of
resources.”13 Thus, it consists of six main sectors:

Eco-builders
1 2 3 The construction industry remains a major cause of pollution.
According to the World Green Building Council, buildings are
responsible for 39% of global energy-related carbon emissions.17
Renewable Green Means of However, there is a solid foundation for optimism. The increasing
Energy Building Transport use of natural and environmentally friendly materials and modern
methods of construction – backed by new legislation – can reduce
overall emissions by improving building energy performance and
decreasing building materials’ carbon footprint.
4 5 6
Inside the buildings of tomorrow, smart technology will help people
use cooling, heat, light and other resources more efficiently. Building
Water Waste Spatial Oman’s greener homes and offices of the future - and retrofitting
Management Management Planning old ones to meet modern standards - is a huge undertaking requiring
hundreds of specialist roles. The ILO predicts that there will be
6.5 million jobs in sustainable construction by 2030, making it the
second-fastest growth sector behind clean energy.18
 Tejarah Talks Oman’s Journey to Net Zero 14 15

Reuse, Repair, Remake Change in Behaviour

Economist Kate Raworth from the University of There is clear interest among Omani
Oxford’s Environmental Change Institute, believes consumers and businesses about what
we need a decarbonised economy far sooner than they can do to protect the environment,
2050. According to Raworth, the economy should but also some confusion about what
urgently be redesigned so that resources are actions they should take to make a
not wasted. That, she says, requires serious difference. Directing public interest to
innovation: “Our future economy will thrive on more effective action needs to be a key
reusing, repairing, refurbishing, remaking and part of the transition to net zero.
Kate Raworth repurposing – this transformation will create Behaviour that can reinforce and shift
University of Oxford’s
Environmental Change Institute new kinds of creative and purposeful jobs.”19 the market outlook are particularly
important, where consumers use their
The new circular economy includes both conventional recycling, which buying power to support growth in
reuses raw materials and more creative careers in upcycling, such as greener products and services.
sustainable fashion and furniture designers who make new products
from waste. The ILO predicts that 6 million jobs can be created by
moving away from an extract-manufacture-use-discard model and
embracing recycling, reuse and repair with an emphasis on waste
management (recycling) and services (repair, rent).

People Power
It is clear that the policies required to meet Oman’s 2050 net zero
target will need action much more directly from people, and not solely
by the government and businesses. This means that the changes
required will be much more visible in people’s everyday consumption
choices, ranging from how they travel to the products they buy. This
will call for complex and in some cases, costly changes and the right
type of support. It would be all too easy to dispute or delay the need
for action - but that is no longer an option given the urgency and
gravity of the issue.

Show Me The Way

A potential solution is to create a central, easy-to-use and tailored
information hub to inform people on what they can do and how to
reduce their carbon footprints. Consumers want to act, but most do
not know what steps would make the biggest difference or how to
take them. In this regard, a clear ranking of actions, helpful tips and
guides that highlight the benefits such as reduced energy bills and
improved health would be enormously helpful.
 Tejarah Talks Oman’s Journey to Net Zero 16 17

SMEs & Net Zero

Net Zero Challenges
Clearly, there is no net zero economy without Omani SMEs
transitioning to net zero aligned operations. However, they face
challenges that hinder their decarbonisation journey including
high costs and the need for access to external finance. SMEs consider
SMEs and entrepreneurs may have a relatively small individual that high upfront costs and limited internal funds for investment are
environmental footprint, but in aggregate terms, they account for a the most significant barriers to their green transition, along with the
significant share of environmental pollution and GHG emissions. lack of low-cost sustainable financing solutions. SMEs are also
Estimates on a European level indicate that SMEs account for 40 - 64% concerned about the impact of net zero investments on their
of industrial waste and 50 - 70% of GHG emissions of the business competitiveness over the near-term, including their ability to provide
sector. If they do not reduce emissions, there is no net zero economy, affordable green products, services or processes. Capacity constraints
but SMEs are largely struggling to start their transition to net zero.20 also impede SMEs from embarking on the journey to net zero.

There are various drivers for SMEs

to green their business models.
AS ENTREPRENEURS AND
Reduction of operating costs,
INNOVATORS, SMES ARE CRITICAL It is important to point out that half of
personal conviction, improvement
FOR DEVELOPING SOLUTIONS the estimated US$100 trillion investment
of brand image and regulatory
TO ADDRESS THE GLOBAL required to get global supply chains to
requirements are some of the
CLIMATE CRISIS AND THE BUILDING net zero by 2050 will need to go to SMEs.22
key factors often cited. Going
OF GREEN ECONOMIES –
forward, value chains will likely
CURRENTLY THEY ACCOUNT FOR
play a major role in driving SME
70 - 90% OF CLEAN TECH FIRMS
green investments. However,
AND OVER A THIRD OF SMES OFFER
while many Omani SMEs and Supporting SME Green Transition
GREEN PRODUCTS AND SERVICES.21
entrepreneurs recognise that Government institutions, commercial and development banks and
the transition to net zero is a other key actors have an important role to play in supporting Omani
must and are taking actions towards greening, their efforts remain SMEs transition to net zero by:
relatively modest so far. Most Omani enterprises are at the beginning
of their journey towards net zero and actions are often limited to basic Providing financial support to address challenges impeding SME
interventions, such as energy efficiency measures and waste access to sustainable finance.
reduction. More complex interventions, such as production or service
process redesign, upstream and downstream supply engagement
Understanding better Oman’s SME, start-up, entrepreneurial
and external environmental auditing, are broadly lacking.
eco-system its sustainable finance needs, depending on location, size,
activity and ambition, in order to better tailor financing instruments.
Omani SME progress in the green transition depends on several
factors, such as the sector in which the business operates, their size,
emissions levels and their perceptions around the business case. Strengthening SME awareness of sustainability-related data,
For example, manufacturers face a longer and more complex journey information, definitions, standards and methodologies.
compared to service SMEs. Companies with higher emissions levels
tend to take more actions to reduce them, as do larger companies. Engaging in international co-operation and initiatives to foster
In fact, the most proactive companies see greening efforts as an knowledge sharing, policy dialogue and collaboration on sustainable
opportunity to improve their business. Understanding these factors finance for SMEs.
and how they interact can help Omani policymakers and financial
institutions create better targeted policy and financial solutions.
 Tejarah Talks Oman’s Journey to Net Zero 18 19

Equally important is providing Omani SMEs with access to Long-Term Science-Based Targets
non-financial support in the form of training, workshops, guides and These determine how much a company must reduce their value
information portals to help them better identify and measure their chain emissions to align with limiting warming to 1.5°C. A company
environmental performance and identify steps that can be taken to cannot claim to be net-zero until the long-term science-based target
embark and advance their net zero transition. has reached 90% reduction in emissions. The deadline for long-term
targets is 2050, but more ambitious companies are striving to reach
Where tools are already in place, public institutions can help raise SME net zero before this.
awareness and use of these tools. Public institutions can also develop
tools internally or engage in partnerships with private initiatives or Beyond Value Chain Mitigation
other non-governmental actors to make use of externally developed The SBTi encourages companies to take action and fund projects
tools and services. with climate benefits beyond their value chain. This will help mitigate
GHG emissions and lead to additional benefits for people and the
Be Bold planet in support of the UN’s Sustainable Development Goals.
To keep up, Omani SMEs must be bold. Instead of playing defence, as For example, funding carbon avoidance or removal projects and
many have largely done until now, business owners and managers must nature restoration schemes. As a result of funding carbon removal
pivot to an offensive position, working to meet growing demand for or avoidance projects, a company can become ‘carbon neutral’.
climate-friendly goods and services, and the green energy, equipment However, this is not the end goal and emissions reduction should
and infrastructure needed to produce them. First movers will clearly be prioritised.
gain an advantage.
Neutralisation
Science Based Targets initiative (SBTi)
The SBTi acknowledges that it may not be possible for some
The Science Based Targets initiative through the SBTi Net-Zero
industries to achieve zero emissions and decarbonise 100% of the
Standard publication has provided a clear definition of net-zero
value chain. As a result, once long-term decarbonisation targets
and shown how businesses can achieve it.23 Under the SBTi Net-Zero
have been reached, companies must use carbon removals to
Standard, corporate net-zero is defined as:
neutralise unavoidable emissions.
“Reducing scope 1, 2, and 3 emissions to zero or to a residual level
that is consistent with reaching net-zero emissions at the global
Key Elements of the Net Zero Standard
or sector level in eligible 1.5°C-aligned pathways. Neutralising any
residual emissions at the net-zero target year and any GHG emissions
In 5 to 10 2050 at
released into the atmosphere thereafter.” years the latest

With a robust framework grounded in climate science, Omani business Set near-term Set long-term
1 2
Emissions (tCO2e)

SBTs SBTs
owners and managers can now confidently set emissions reduction
targets in line with the Paris Agreement and take the climate action
necessary to limit global temperature rise to 1.5°C.

1.5°C aligned
Near-Term Science-Based Targets
These galvanise action and initiate change to make sure that 4 Neutralisation of
residual emissions
businesses can achieve rapid and significant reductions in 3 Beyond value chain
mitigation Removals
emissions – typically 4.2% pa - by 2030 - in line with climate science.
Net Zero
 Tejarah Talks Oman’s Journey to Net Zero 20 21

Green Ratings
Other labels seem narrowly defined but implicitly
include broader standards of environmental
performance. For example, organic food in the UK
that is certified by the Soil Association, guarantees
the consumer the food was grown without pesticides
An eco-label is a trustworthy symbol that manufacturers but also that any animals involved in its production were treated
can put on the things they sell to demonstrate humanely. Some labels, including the EU Eco Label, certify good
environmental performance across a much wider range of criteria,
they are genuinely better for the environment than including the use of raw materials and energy, the degree of recycling
comparable products. and reuse and whether air, water or land pollution was produced
during the manufacturing process.
Most eco-labels are voluntary, for instance, canned fish producers
might apply to use a label from the Marine Stewardship Council
showing the tuna they catch meets its standards of sustainability,
while timber producers might ask for certification by the Omani Eco-label
Forest Stewardship Council to prove their wood has not come Perhaps a local eco-label covering food and clothing,
from a tropical rainforest. supermarkets, banks, airlines and retail chains could be
created to help engaged Omani consumers choose green.
By extension this would incentivise Omani businesses to
become more sustainable, helping local consumers buy
greener products and services.

Driving Competition
Competition between firms is a strong driver of innovation.
Forest Stewardship Council Marine Stewardship Council But businesses will have little incentive to out-green each other if
Omani consumers cannot discern and choose the greener brand.
There is the opportunity for government to remove the consumer’s
Other eco-labels are mandatory, for example, in the US, manufacturers need to rely on dubious marketing and greenwashing, and instead
of cars and major household appliances are obliged to label products provide simple, credible, green ratings on businesses and products,
to show their energy efficiency, while in Europe, makers of major helping motivated Omani consumers choose greener options.
electrical appliances also have to display a label with an A - G rating -
A is good, G is bad - showing its level of energy efficiency.

Today, there are many different eco-labelling schemes in

operation around the world. For instance, the Ecolabel Index lists
456 eco-labels in 196 countries, across 25 industries24 - each covering
a different range of environmental criteria. Some labels are narrowly
defined, for example, those that read “100% recycled” tells the
consumer only that a product has been made from recycled
materials, it does not guarantee the factory where the product
was made produced no air pollution, used no child labour, paid its
workers fairly, or did not transport its goods by environmentally
damaging air freight.
 Tejarah Talks Oman’s Journey to Net Zero 22 23

Green Investment
Growing but Insufficient
A recent BloombergNEF report reveals global No major industrialised country is
investment in the low-carbon energy transition totalled currently scheduled to meet its
a record US$1.11 trillion in 2022 - up 31% in a year.
goals under the Paris Agreement
And for the first time, investment in green energy
technologies - such as renewable energy, electrified
transport and energy storage - has reached parity with
the total capital deployed to produce new fossil fuels.25

Despite 2022’s results, global

Investment
investment in lower-carbon
technologies remains woefully short
of what is needed to confront climate
US$495 bn US$466 bn change. For the world to get on a 2050
Renewable Energy Electrified Transport net zero CO2 emissions trajectory,
investment must triple. Including the
additional US$274 billion invested in
17% 54% the power grid, energy transition
investment hit US$1.3 trillion in 2022.
By comparison, the world must invest
an annual average of US$4.5 trillion for
the remainder of this decade in order
to get on track.27 Indeed, no major
industrialised country is currently
2021 2022 2021 2022
scheduled to meet its goals under
the Paris Agreement28 and the Climate
Action Tracker predicts that current
Renewable energy, which includes wind, solar, biofuels and other policies represent a warming pathway
renewables, remained the largest sector in investment terms, of around 2.9°C, with disastrous
achieving a new record of US$495 billion committed in 2022, implications for ecosystems, human
up 17% from 2021. However, electrified transport, which includes and animal populations.29
spending on electric vehicles and associated infrastructure, came
close to overtaking renewables, with US$466 billion spent in 2022 -
an impressive 54% increase year-on-year.26
 Tejarah Talks Oman’s Journey to Net Zero 24 25

Green Hydrogen
The global hydrogen economy remains robust and
growing from the project pipeline to deployment,
according to an analysis of more than 1,000 projects
published by the Hydrogen Council.30 The report highlights
strong growth across the project funnel with total
investments increasing by 35% from May 2022 to
January 2023. Nine percent of total investments have
reached final investment decision up 30% since May 2022.

The report tracks 1,040 projects An MoU was also signed between Hydrom and OQ Gas Networks
globally representing US$320 billion which aims to establish collaboration on green hydrogen
in direct investment between now pipelines development. The combined investments total more
and 2030, up from US$240 billion. than US$20 billion.
Approximately half of the projects
are focused on large-scale An area estimated at 50,000 km2 – 31 times the size of London - is
industrial applications, with the next suitable for renewable energy and green hydrogen projects in Oman.
largest segment (20%) related to The area of each piece of land allocated for green hydrogen projects
mobility. In mobility, more than is estimated at about 320 km2.
1,000 refuelling stations are now in
operation globally. Total announced Hydrom aims to operate at least six projects in the green hydrogen
electrolyzer capacity stands at 230 sector by 2030 in the central and Dhofar governorates, producing not
GW in 2030.31 less than one million tonnes annually of green hydrogen, equivalent to
about 10GW of electrolyser capacity and 20GW of clean energy, with
Oman’s GH2 Ambition an expected investment of about US$30 billion.
Oman enjoys high levels of solar irradiation - up to 2.1MWh per m2 -
as well as wind speeds of 9.7 metres per second on the coast - On a regional note and according to Roland Berger and MENA
factors that will feed ambitions of producing one million tonnes of Hydrogen Alliance a thriving green hydrogen ecosystem could
green hydrogen and its derivatives by 2030. create between 400,000 and 800,000 GCC jobs by 2050 - spanning
the entire value chain from renewable generation for energy supply
Hydrom, a subsidiary of Energy Development Oman signed three to electrolysis and subsequently storage and distribution of green
green hydrogen project agreements in June 2023 as it steps up hydrogen.32
the sultanate’s renewable energy industry. The first project was
awarded to Amnah consortium - Copenhagen infrastructure
Partners, Blue Power Partners and Al Khadra Partners - the winner
of Round 1 Public Auction for block Z1-01. The second project was
signed with bp Oman, for block Z1-03. A third consortium comprising
Oman Shell, OQ, EnerTech, Intercontinental Energy and Golden
Wellspring Wealth for Trading was awarded block Z1-04.
 Tejarah Talks Oman’s Journey to Net Zero 26 27

Green Building
Sustainable Practices
There is a growing consensus that Oman’s
construction sector must accelerate its shift
to sustainable practices. And green real
estate development is already underway in
The buildings and construction sector is highly multiple locations across the country. Yet, to
energy-demanding and carbon-intensive, accounting fully decarbonize Oman’s built environment
as a system, we need to make sure that all
for 39% of global energy-related CO2 emissions.33 players along the value chain collaborate
Construction and demolition is one of the heaviest and focus on the reduction of emissions.
and most voluminous waste sources. In many countries For example, material providers have a
construction and demolition waste accounts for up to responsibility for reducing their emissions
but they also need the demand for
40% of all municipal solid waste with a significant part
low-carbon solutions from their customers
of it ending up in landfills.34 to help them invest in the transition. 11.8%
It is important to emphasize that it already makes sense to build Building Codes
green. According to an IFC report, green buildings command The 2015 Paris Agreement requires all The global green
substantially higher sale premiums – up to 31% more and sell participating countries to develop a
construction market
more quickly than traditional buildings. Furthermore, green buildings size is expected to
climate action plan. Across 194 ‘Nationally reach a value of more
maintain higher occupancy rates - up to 23% higher - than Determined Contribution’ plans submitted than US$774 billion by
conventional buildings and offer higher rental income. By consuming to date, the second most frequently cited 2030 increasing at a
less water and electricity, operational costs are up to 37% lower than mitigation policy is improving the energy CAGR of more than
traditional buildings. When green features are incorporated early in efficiency of buildings. Topping the proposed 11.8% over the next
the building design, the cost of green construction can range from actions are building energy efficiency codes,
8 years
savings of half a percent to 12% in additional costs.35 which have already been enforced by over
80 countries and many city/state authorities.
Others include incentives and market
instruments as well as resilience, renovation
and retrofitting measures.

The global green construction market size

is expected to reach a value of more than
US$774 billion by 2030 increasing at a CAGR
of more than 11.8% over the next 8 years.
Much of this growth will occur in Europe,
but given global growth forecasts, it is
projected that new sustainable buildings
alone will present a US$24.7 trillion
investment opportunity in emerging markets
Additionally, the report notes that green buildings can be a strong by 2030.
driver of economic growth, generating upwards of 9 million skilled
jobs in both the renewables and construction sectors by 2030.
Currently, green buildings account for just 8% of the construction
and renovation sector, indicating a vast potential for growth.36
 Tejarah Talks Oman’s Journey to Net Zero 28 29

Green Construction Companies

Rapidly increasing investment
in sustainable construction 12 Sustainable
is creating a new ecosystem of
green construction technology
Tools and
companies. According to Technologies
GlobalData research, venture
capital (VC) investment in green
Used in Green
construction saw a significant rise Construction
in 2022, reaching US$115m from
just US$6.9m in 2021 - signalling
the sector’s expected growth in Solar Smart Cool Low-emitting
the next decade.37 Power Appliances Roofs Materials

As mentioned earlier, the World

Green Building Council estimates
that the energy required to In green construction, it can be utilized Appliances like SmartGrid Cool roofs are one of the Selecting low emitting
construct and operate buildings in two ways, one pertains to active refrigerators, dishwashers, sustainable green design materials and products
accounts for around 39% of solar energy and another is passive and washing machines are technologies that aim improves human health and
solar power. examples of such sustainable at reflecting heat and goes a long way in protecting
global carbon emissions.38 technologies. sunlight away. the overall environment.
This collective problem is the
driver for the development of a
green construction start-up Biodegradable Electrochromic Water Efficiency Self-Powered
ecosystem. Start-ups in this Materials Smart Glass Technologies Buildings
space are focused on varying The technologies encompass
the re-use and application
activities, from the design and of efficient water supply
construction of low-carbon systems, including the use of
buildings to sustainable building Limit the negative impacts on the Electronic Smart Glass works
processes like dual plumbing,
The buildings can generate
greywater re-use, rainwater
materials companies, as well as environment as they easily breakdown mainly in summer to shut out sufficient power to support
harvesting, and water
manufacturers of prefabricated without releasing toxins, eg. timber, the heat of solar radiation. their energy requirements and
conservation fixtures.
sustainably sourced bamboo, mycelium, even direct surplus energy
building components. In fact, the and organic paints. back into the power grid.
adoption of more sustainable
and environmentally conscious
construction materials has grown Green Passive Technology Rammed
since the surge of the COVID-19 Insulation House Efficiency Earth Brick
pandemic. According to research, Construction of a building
requires energy that
the green building materials
release CO2 and other
market is projected to reach emissions. If this process
US$425.4 billion by 2027, growing Green insulation has proven to be a Passive house is considered
is made more efficient,
Rammed earth brick is one
at a CAGR of 8.6% over the it is possible to complete
sustainable construction technology as it the mostadvanced form of of the ancient construction
more buildings in less time
analysis period 2020-27.39 eliminates the need for high-end finishes green construction. It uses
whichsignificantly reduces
technologies which has been
made from non-renewable materials. nomechanical or electrical lately re-introduced for the
the environmental impact
devices but relies on the demands of sustainability.
per building.
building design.
 Tejarah Talks Oman’s Journey to Net Zero 30 31

Surge in Green
Do the Right Thing
Building green is not just the right thing to do

VC Funding
for the planet, it is also a way to potentially
generate better investment returns. If we look
10 years down the line, there may be risks in
owning assets that do not meet sustainability
targets. Those assets may suffer from less
A November 2022 A/O PropTech study titled the Future of Building tenant demand, higher operating costs and
in a Low-Carbon World reflects this surge in VC investment, finding increased regulations. The cost of capital for
that low-carbon building practices attracted record levels of funding those assets is also likely to be higher.
in 2022, with investment rising to US$2.2 billion.40 The study revealed
that US$4.5 billion of early stage capital was invested in companies
directly focusing on decarbonising the architecture, engineering and
construction sectors between 2017 and 2022, involving more than
452 deals. While 80% of the total investment value over that period
was concentrated in North American start-ups, more than half of the
deals done were in Europe.41

The increased investment in green

construction technologies is a
combination of several factors,
including the use of new materials,
production techniques such as 3D
printing and uptake of AI to
improve efficiency and reduce
waste. In addition, start-ups and
investors are realising the vast
improvements these innovations
can bring to the construction
industry.

Alongside technology advances,

increased global regulation in
the construction industry is also
driving investment. The UN
2030 Agenda for Sustainable
Development has been attributed
as playing an influential role in the
growth of more environmentally
friendly construction. And much of
the sector’s growth is expected to
come from developing nations.
 Tejarah Talks Oman’s Journey to Net Zero 32 33

10

What A Waste
Where There’s Muck There’s Brass
According to a joint Boston Consulting Group
- World Business Council for Sustainable
Development report, the GCC generates
between 105 and 130 million tons of waste
The world generates 2.01 billion tonnes of municipal per annum, primarily from municipal solid
solid waste annually, with at least 33% not managed waste, construction and demolition waste
and agricultural waste.44 The study estimates
in an environmentally safe manner. Worldwide, waste that it will take US$60 – US$85 billion
generated per person per day averages 0.74 kilogram invested across four key value streams,
but ranges widely, from 0.11 to 4.54 kilograms. plastic, concrete and cement, metal and
Though they only account for 16% of the world’s bio-waste over the next 20 years to meet
collection targets throughout the GCC region.
population, high-income countries generate about
This investment would cover design,
34%, or 683 million tonnes of the world’s waste.42 collection, sorting and recycling across 130mn tons
these four key waste streams.

Based on international best practices, The GCC generates

between 105 and 130
concrete, cement and plastic could million tons of waste
potentially be collected at 95%, metals at per annum, primarily
97% and bio-waste at 90% in the GCC from municipal solid
waste, construction
region. Recyclability of material streams
and demolition waste
should not stand in the way of such and agricultural waste
enhancement, as respective technologies
either exist already or innovation is
underway. The region’s ultimate ambition for
recycling rates for concrete and cement 45
should be:

95% 75% 95% 80%

Cement Plastic Metal Bio-waste

When looking forward, global waste is expected to reach 3.4 billion The report estimates that contributing
tonnes by 2050, more than double the population growth over the to such global targets as 80 - 90% recycling
same period. The fastest growing regions are Sub-Saharan Africa, would not only save 0.9 - 1.5 billion tons of
South Asia, the Middle East and North Africa, where, by 2050, CO2 emission by 2040 in the GCC, helping to
total waste generation is expected to more than triple, double and reduce global warming, but also protecting
double respectively. In these regions, more than half of waste is nature through the conservation of water,
currently openly dumped and the trajectories of waste growth will land and biodiversity. Quality of life in the
have vast implications for the environment, health and prosperity, region could also be enhanced through
thus requiring urgent action.43 reduced air pollution and cleaner, more
liveable surroundings.46
 Tejarah Talks Oman’s Journey to Net Zero 34 35

Increasing Circularity
The study suggests that increasing circularity in the GCC would
yield multi-dimensional benefits including job creation, economic
growth, self-sufficiency and independence from external regulatory
pressures. Optimizing circularity could also increase GDP by
approximately US$95 –US$105 billion across the GCC from the
four key waste streams, helping generate 205,000 -306,000 jobs,
significantly improve people’s quality of life and create attractive
growth opportunities for the private sector.

205 -306k
Jobs 1.2 billion tonnes of food
is lost on farms, during,
around and after harvest.
Job Creation Economic Growth Self-sufficiency Independence

Food Waste
A WWF report estimates that globally 1.2 billion tonnes of food is
lost on farms, during, around and after harvest. This is equivalent to
15.3% of food produced. It is estimated that total food loss and waste
is over 2.5 billion tonnes – approximately 40% of all food produced.47
This is based on the 1.2 billion tonnes of food lost on farms, the 931
million tonnes wasted in retail, food service and consumer homes
Increase GCC GDP by: from the UNEP Food Waste Index and calculations to estimate losses
occurring in the post-farmgate transport, storage, manufacturing
US$95 –US$105 bn and processing stages. The report also notes that increases in total
amounts of food lost and wasted mean the amount of GHG emissions
generated by food that goes unconsumed also increases – from
previous estimates of 8% of all total GHG emissions to 10%.48
Inc

Whilst most of these emissions occur during the production and

m

as agricultural process, rather than in households, there is still an

re

ea

eC Str important role for government to introduce greater prevention

ircu te
larity from Was awareness and measures, both in households and local businesses.
For example, food waste can be reduced with the right training,
incentives and procurement policies in hotels, restaurants, cafes,
hospitals and homes. Packaging free shops and local markets can
prevent packaging and food waste whilst also providing consumers
with fresh, locally sourced food.
 Tejarah Talks Oman’s Journey to Net Zero 36 37

Final Word
CC BY-NC-ND: This license allows reusers to copy and distribute
the material in any medium or format in unadapted form only,
for noncommercial purposes only, and only so long as attribution
is given to the creator.

CC BY-NC-ND includes the following elements:

Omani SMEs should embrace net zero BY - Credit must be given to the creator
NC
for three compelling reasons.
- Only noncommercial uses of the work are permitted
ND - No derivatives or adaptations of the work are permitted

First, it demonstrates their environmental responsibility by actively

addressing climate change and minimizing their carbon footprint.
Get to know us
By adopting sustainable practices, SMEs become crucial contributors
to a healthier planet and pave the way for a sustainable future. obf.om
@ombusinessforum
Second, it offers a distinct competitive advantage. Today’s discerning
Omani consumers prioritize businesses aligned with their values,
placing a premium on sustainability. SMEs that showcase their
commitment to net zero attract a loyal customer base of
eco-conscious individuals, setting themselves apart from competitors
and solidifying their market position.

Third, it yields tangible financial benefits. Sustainable practices

often result in cost savings and enhanced operational efficiency.
By implementing energy-efficient technologies, waste reduction
strategies and resource optimization, Omani SMEs can trim Contacts
utility expenses and boost productivity. This dual focus on
sustainability and financial viability ensures long-term profitability The Firm thefirm.om
while minimizing waste. CC Energy Development cced.com.om

In brief, it allows Omani SMEs to demonstrate environmental OMRAN Group omran.om

responsibility, gain a competitive edge and achieve financial KPMG kpmg.com/om/en
sustainability. It is a strategic imperative that will help
Authority for Public Services Regulation apsr.om
companies navigate our evolving business landscape and secure
a prosperous future.
For further details on Tejarah Talks contact:

Team Tejarah Talks

OBF Office
Ministry of Commerce, Industry & Investment Promotion
PO Box 550
Muscat, 100
Sultanate of Oman

(+968) 9242 7219

[email protected]

Tejarah Talks Oman’s Journey to Net Zero 38

Footnotes
Page Footnote Page Footnote

7 1 IPCC, Climate Change 2022: Mitigation of Climate Change 23 27 Ibid

2 World Resources Institute, Turning Points: Trends in Countries’ Reaching 28 Scientific American, Global Carbon Removal Efforts Are Off Track for
Peak Greenhouse Gas Emissions over Time Meeting Climate Goals
3 World Resources Institute, 3 Charts Explain One of the Most 29 The Climate Action Tracker is an independent scientific project that
Overlooked Opportunities to Address Climate Change and Poverty tracks government climate action and measures it against the
globally agreed Paris Agreement aim of “holding warming well below
8 4 The Sultanate of Oman’s National Strategy for an Orderly Transition
2°C, and pursuing efforts to limit warming to 1.5°C.” A collaboration of
to Net Zero
two organisations, Climate Analytics and NewClimate Institute,
5 UN Climate Change, Race to Zero Campaign
the CAT has been providing this independent analysis to policymakers
9 6 IPCC, Synthesis Report of the Sixth Assessment Report since 2009.
7 UN Environment Programme, Emissions Gap Report 2022
24 30 Hydrogen Council, Hydrogen Insights: Global Project Funnel Gains
10 8 McKinsey, Playing Offense to Create Value in the Net Zero Transition Momentum Across Value Chain & Geographies
9 Ibid 31 Ibid
10 McKinsey, Accelerating Toward Net Zero: The Green Business
25 32 Roland Berger, Unlocking Hydrogen Growth in the Middle East
Building Opportunity
26 33 The World Green Building Council, Bringing Embodied Carbon Upfront
11 11 McKinsey, 2021 Global Report: The State of New Business Building
34 Roland Hunziker & Bill Sisson, The Construction Sector Can Pave the Way
12 12 ILO, How to Work in the Green Economy for a Green Economic Recovery
13 UNEP, Green Economy 35 IFC, Green Buildings: A Finance and Policy Blueprint for
Emerging Markets
13 14 IRENA, Renewable Energy & Jobs, Annual Review 2022
36 Ibid
15 IEA, Global Energy Employment Rises Above Pre-Covid Levels,
Driven by Clean Energy and Efforts to Strengthen Supply Chains 28 37 Lara Williams, Green Construction: A Sector to Watch in 2023,
16 Ibid Investment Monitor
17 The World Green Building Council, Bringing Embodied Carbon Upfront 38 The World Green Building Council, Bringing Embodied Carbon Upfront
18 ILO, Greening With Jobs 39 AbdulLateef A. Olanrewaju & Yen Sim Chong, Post occupancy evaluation
of green residential buildings, In the Greater Kuala Lumpur, Malaysia,
14 19 Kate Raworth, Doughnut Economics
Journal of Housing & the Built Environment
16 20 OECD, SMEs: Key Drivers of Green and Inclusive Growth
30 40 A/O PropTech, The Future of Building in a Low-Carbon World
21 OECD, The Road to Net Zero: Where do SMEs Stand?
41 Ibid

17 22 World Economic Forum & Boston Consulting Group, 32 42 World Bank, What a Waste 2.0
Net-Zero Challenge: The Supply Chain Opportunity 43 Ibid

18 23 The Corporate Net-Zero Standard is intended for companies with more 33 44 Boston Consulting Group - World Business Council for Sustainable
than 500 employees that wish to set net zero targets through the SBTi. Development, Recycling in the GCC: Securing Valuable Resources for a
The SBTi also offers a simplified route for SMEs to set net zero targets. Sustainable Future
These companies should refer to the SME FAQ (https://bit.ly/3HuaqU6) 45 Ibid
for more information and use the SME target setting system 46 Ibid
(https://bit.ly/44i8o3h) when ready to set net zero targets.
35 47 WWF, Driven to Waste: Global Food Loss on Farms
20 24 Ecolabel Index: ecolabelindex.com 48 Ibid

22 25 BloombergNEF, Global Low-Carbon Energy Technology Investment

Surges Past $1 Trillion for the First Time
26 Ibid
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