Qatar in the Energy Transition: Low Carbon Economy Challenges and Opportunities

Abstract

Climate change is accepted today as an indisputable fact resulting from human activity, predominantly the burning of fossil fuels. In order to prevent the catastrophic impacts of climate change, the world agreed in Conference of the Parties (COP) 21 to limit the global temperature rise above pre-industrial levels to 2 °C. To meet the Paris Agreement, a profound transformation of global energy systems is required from fossil fuel-based to low or zero carbon sources. This creates a risk for hydrocarbon-producing countries such as Qatar, which depend on fuel exports for income. In the short term, Qatar is well suited for the energy transition due to its abundance of natural gas, a widely acceptable transition fuel. Technological improvement in renewable energy as well as fast moving competition in the hydrogen market, showcase Qatar’s hydrocarbon export vulnerabilities. This chapter will provide a background on energy transition elements, Qatar’s efforts locally and internationally in the transition to a low carbon economy and highlights the opportunities and vulnerabilities for Qatar to build resilience.

7.1 Introduction

Qatar is a small peninsula with extreme weather conditions, hyper aridity, and water scarcity. The discovery of oil first, and gas later changed the country, which generated the wealth of Qatar today and enabled water desalination critical to the modern water system (see Chapter 11). The hydrocarbon economy aided the population increase from 28,000 people in 1939 to 2.8 million people living in Qatar in 2022 (Planning and Statistics Authority, n.d.b). These resources also facilitated investments in education, healthcare, infrastructure, culture, and sports, making Qatar a city-state of the future.

As the world moves toward adopting cleaner fuels and lessening dependency on fossil fuels, like many hydrocarbon-producing countries Qatar is faced with the challenges of the energy transition. The challenges are not in terms of local energy mix per se, but primarily economic. Qatar’s major income—about 34% of the Gross Domestic Product (GDP)—is obtained by selling hydrocarbons (Planning & Statistics Authority, 2020), largely Liquefied Natural Gas (LNG). Fortunately for Qatar, natural gas is the cleanest form of fossil fuels and is classified as an energy transition fuel, used to shift away from coal and other forms of carbon intensive fuels. Moreover, natural gas is often used to backup renewable energy systems to overcome intermittent production and seasonality issues. This puts Qatar in a unique position, as it supports the world to decarbonize and is a seller of this in-demand commodity. While the current demand for natural gas is high, it puts Qatar at a risk, not due to lack or ability of production but a probability of demand decline in the future when the world demands more cleaner low carbon fuel. A similar effect was observed following the drop in oil prices at the end of 2014, which caused a sharp reversal in Qatar’s economic growth dynamics. The nominal GDP growth rate declined by 20.2% in 2015 due to the decline in oil and gas export revenues and resultant restricted public spending (Planning & Statistics Authority, 2018). Qatar will have to adapt to the changing markets and the growing need for a renewable energy or carbon neutral source. The country’s leadership anticipated this trend in 2008 and put forth a Qatar National Vision 2030 (QNV 2030). The vision is a master plan aimed at economic diversification, human development, and environmental protection to sustain the high living standards of its people while maintaining growth (see Chapter 2). The recent change of Qatar’s state-owned hydrocarbon company from Qatar Petroleum to Qatar Energy and the introduction of the new Ministry of Environment and Climate Change (MOECC) indicate the shift of the country away from hydrocarbons to fit in the world’s movement toward the energy transition.

7.1.1 From Hydrocarbons to Renewable Energy Systems

The energy transition is a complex and integrated problem; the current fossil fuel-based system allows the generation of both forms of energy, heat, and power. It is reliable, and able to generate power and heat consistently and throughout the year, unlike seasonality dependent renewable energy. Liquid fuels supply chains are established and well connected. Fuels can be stored for a long time and purchased for strategic supplies. They can be easily embedded in central utility generation, or decentral production. These attributes and more make fossil fuels the preferred power and heat source for most countries (Thiel & Stark, 2021). Nonetheless, fossil fuel prices might fluctuate due to geopolitics or demand thus creating price instability.

While the power generation via renewable energy has advanced significantly in terms of efficiency, deployment, and reduction in cost, it still suffers from intermittency issues and relatively large energy storage costs. On the other hand, renewable heat generation feasibility and scalability are still highly geographical based where renewable energy such as geothermal energy is at the forefront. This makes it harder for other countries to produce heat from renewable energy with low emissions (Thiel & Stark, 2021). Exceptions include the use of nuclear energy or bioenergy for heat generation. All these factors contribute to natural gas being recognized as the transition fuel to a low carbon economy. Natural gas demand has steadily increased over the last decade. The current production of natural gas is led by Qatar, followed by Russia, Australia, and the United States. Figure 7.1 shows natural gas proven reserves and production by country.

Fig. 7.1

World proven natural gas reserves in 2020 (U.S. EIA, 2020)

The supply and demand of natural gas became prominent after the Russian-Ukraine conflict, where the price shot up, and Europe had to face the reality of low carbon energy readiness as well as the source of its energy supplies. Qatar currently sells the majority of its LNG to Asia (Planning and Statistics Authority, n.d.a). Japan, a major Qatari LNG client, has adopted an energy transition plan—to convert to hydrogen by 2050 (Japan’s Ministry of Economy Trade and Industry, n.d.). Qatar and Singapore recently signed the first LNG long-term emission detailed contract that requires shipments imported from Qatar to detail carbon emissions associated with LNG production and transport (Shiryaevskaya, 2020),¹ meaning that Qatar will have to reduce its own emission locally to lower its total supply chain carbon emission (see Chapter 6). The small population and heavy industrial activity, which includes oil and gas extraction, natural gas liquification and petrochemical production, in addition to the use of natural gas for all water, power, and food production, make Qatar one of the highest emitters of carbon dioxide (CO₂) per capita—although contributing less than 0.3% of the total world CO₂ emissions (Ritchie et al., 2020).

7.1.2 Challenges and Vulnerabilities

The ongoing transformation of the energy system toward a low carbon one will have profound challenges (Sim, 2020) in terms of geopolitical considerations and domestic arrangements. The energy transition will be associated with revenue and job volatility, especially for hydrocarbon-producing countries that depend on fossil fuel exports as the main income source. Hydrocarbon fluctuating demand and price volatility will have a negative impact on economic growth for hydrocarbon exporting nations, as observed in the oil drop in 2014 (Planning & Statistics Authority, 2018). In Qatar, hydrocarbon wealth has been used to fund jobs for citizens, more than half of whom work in the public sector. Any reduction in income will correlate with an increase in unemployment (Sim, 2020). This will mean that there will be more pressure for growth needed in the non-hydrocarbon private sector and entrepreneurship. Together with the shifting markets, the challenges posed to Qatar include: (1) how Qatar can reduce its carbon footprint locally, and (2) what would Qatar do to sustain its energy market, if energy is the best solution to go with. This requires a systematic assessment of Qatar’s potential challenges and opportunities from a technical and policy perspective.

7.2 Qatar’s Energy History

Qatar historically has been an energy innovator. Qatar’s oil discovery started in 1939 with Dukhan field, and the first crude export was in 1949. Since then, Qatar has become an oil-rich country, but is a relatively small player in the oil market in comparison with Saudi Arabia, Iraq, Kuwait, and United Arab Emirates (UAE). In the 1970s, Qatar’s first gas discovery was marked, a major gas reserve in the north of Qatar that it shares with Iran. The field, which covers about 6,000 square kilometers, lies offshore to the northeast of Qatar. It is considered the largest single concentration of non-associated natural gas in the world with total proven reserves of more than 900 trillion cubic feet, representing 20% of world total, and making Qatar the third country in the world with the largest reserves of natural gas after Russia and Iran (Qatar Ministry of Foreign Affairs, n.d.b). The field remained untapped, especially during the turmoil period of the Iranian revolution and then the Iraqi-Iranian war. It was in 1984 when Qatar began developing the field. The first operation was in 1991. Qatar partnered with then Exxon Mobil and took a leap of faith, based on the vision of the Father Emir, His Highness Sheikh Hamad Bin Khalifa Al Thani, to monetize the gas and invest in LNG. LNG technology was developed in the 1940s and was deployed commercially at a small scale. Qatar’s innovation came in managing the supply chain from production to transportation. This included getting the product to customers with investments in regasification terminals and new large LNG ships. The first LNG facility started producing in 1991, and in 1997 QatarGas sold its first shipment of LNG to Japan. Qatar’s strategic geographical location and the merging of extraction and downstream operations make it one of the lowest cost producers of natural gas. The partnership with ship producers to innovate on LNG transport, in creating large-scale LNG ships, put Qatar on the map as an energy leader.

7.3 Qatar’s Local Emissions and Solutions

Qatar is among the countries that will be affected by sea level rise. The rise could damage coastlines and marine life, and climate scenarios envision more weather extremes that could mean heavy local flooding and more frequent sandstorms (Planning & Statistics Authority, 2011; see Chapter 9). Qatar’s greenhouse gas emissions stem from the industrial and power production sectors (Planning & Statistics Authority, 2011; Fig. 7.2). The major production and oil and gas activities lie in the industrial cities, namely Ras Laffan Industrial City, Mesaieed Industrial City, and Dukhan Industrial City. Ras Laffan industrial city includes LNG plants, gas-to-liquid conversion (GTL), multiple industrial facilities and an industrial port. Mesaieed industrial city has a crude oil refinery as well as hydrocarbon, petrochemicals, iron, and steel production. Dukhan is the first site in which oil exploration and production started (Qatar Ministry of Foreign Affairs, n.d.a). The majority of Qatar’s emission comes from industrial activities (extraction, manufacturing, and heat production) and power and water production, which is mostly carried out in the forementioned industrial cities.

Fig. 7.2

Qatar emission breakdown by sector (Planning & Statistics Authority, 2011)

7.3.1 Qatar’s Mitigation Options

This unique emission profile and the close proximity of the emission sources give the opportunity for Qatar to capture large amounts of CO₂ at a lower cost. Capturing CO₂ from industrial sources already exists using well-established technologies, such as physical adsorption and chemical absorption. While these technologies are energy intensive, for carbon capture itself, Qatar has these capture technologies in major facilities as they are used for natural gas desulfurization and in natural gas processing (van Ewijk & McDowall, 2020). It is worth noting that Qatar produces a large amount of CO₂ alongside the extraction of hydrocarbons, which are separated before any processing. This provides already separated CO₂ at a high purity that can be re-used for chemical production or carbon capture and storage (CCS). Qatar is well suited for CCS, a process that puts extracted CO₂ back into the geological formations. Qatar has one CCS project, to capture 5 million ton per annum of CO₂ from the LNG facility and store it underground, with plans to increase the capacity by 2030 (Qatar Energy, n.d.).

7.3.2 Carbon Capture Utilization and Storage (CCUS)

The untapped advantage for Qatar is to apply carbon capture utilization and storage (CCUS). Carbon utilization means to produce value added products, as a utility or in enhanced hydrocarbon production. Each usage varies in sequestration efficiency. Some can sequester CO₂ for a long time, others for shorter periods. Nonetheless, there exist industrial processes that can convert CO₂ on a commercial scale, such as urea production, dry reforming, and methanol production (Al-Mohannadi & Linke, 2016). The facilities already exist in Qatar cities. Intra-plant integration can help save mitigation cost and generates income streams (Al-Mohannadi & Linke, 2016), which can motivate companies to reduce their emissions without the need for policy interface.

7.3.3 Renewable Energy (R.E.)

Qatar also has the potential to avoid producing emissions locally through the use of renewable energy. Solar potential in Qatar is high, with sunlight running for more than 9 h per day. However, Qatar did not have any large-scale renewable energy production until 2021 when Siraj—a Joint Venture between QatarEnergy, QEWC, and TotalEnergies—was announced to generate 800 megawatts (MW) in 2022 and plans more than 3 gigawatts (GW) in the future. The more renewable energy deployment locally will lessen the amount of natural gas consumed and thus avoids the production of combustion related emissions (Mac Kinnon et al., 2018). It is worth noting that the planned solar energy power plants are backed up with fossil-based generators, to supply power during the night. The same company is working with Qatar Foundation to deploy R.E. systems applications on buildings and WOQOD to investigate the installation of Photovoltaic (PV) systems in WOQOD stations (QatarEnergy, 2021b). The latter will help reduce emissions from the transport sector, especially as the market moves toward electric vehicles (EVs) (Al-Buenain et al., 2021). Currently, the number of EVs in Qatar is limited, but the country has put forth the Green Car Initiative, to target 100% e-powered public transport and to have EVs at 10% of total cars by 2030 (Al-Buenain et al., 2021). These initiatives will help Qatar become less carbon intensive locally, but still a long way to reduce emissions from the industrial sector.

7.4 Qatar’s International Efforts in Climate Mitigation

Qatar’s international commitments reflect its genuine interest in combating climate change (see Chapter 3). While adapting to climate change halt Qatar’s economic development path, Qatar’s role in climate change international arena is undisputed. Qatar hosted COP back in 2012 which laid the grounds for the 2015 Paris Climate Agreement. Qatar is also a signatory to the Kyoto Protocol and ratified the United Nations Framework Convention on Climate Change.

Preventing environmental degradation is a part of QNV 2030 where it puts Environmental Development as the fourth pillar, which includes preventing air pollution and damages to natural habitats among several things. In addition, Qatar issued its National Environment and Climate Change Strategy before the Glasgow COP26 which provides the foundational policy framework for adapting and mitigating climate change. The highlight of the action plan states a reduction of greenhouse gas (GHG) emissions by 25% by 2030 and a 55% shift to sustainable technology in water desalination. The action plan also includes an impressive 100% account for all wastes and the closing and rehabilitation of 100% of unsanitary landfills. However, the remaining targets of the action plan seem to be redundant. For example, reducing 50% of per capita in food waste at retail and consumer levels is insufficient. Through proper management, 100% of food waste can be allocated to the working class or the poorer communities. The construction workers alone amount to half a million amidst a two million population (de Bel-Air, 2014). There is room for improvement in the action plan; however, it does provide a good starting point.

An indication of Qatar’s good intentions in responding to climate change is its devotion to providing the voluntary Intended Nationally Determined Contributions (INDC). Qatar has communicated two INDCs in response to the UNFCC’s decisions 1/CP.19, 1/CP.20, and 24/CP.18. The 2021 INDCs reflect Qatar’s focus on reducing its overall emissions in comparison with the business-as-usual scenario. The two INDCs show Qatar’s long commitment to climate change and the Paris Agreement and its determination to upholding climate change commitments according to its national circumstances and capability.

Qatar response to its international obligations is also illustrated in the initiation of its first UNFCCC Clean Development Mechanism (CDM) project. The Al-Shaheen Oil Field Gas Recovery and Utilization Project reduced its flaring to a significant 90% reduction in addition to reducing GHG emissions by capturing flared gas and allocating it into clean electricity. The ‘zero flaring’ should be a standard applied to all industrial production in Qatar. There are some commitments from Qatar Energy to reduce methane emissions. Methane itself is a larger contributor to the greenhouse effect that could leak from the production process, thus increasing net emissions of the LNG process. Moreso, startup operations and shutdown will result in flaring the excess gas, increasing emissions.

Internationally, Qatar’s investment arm, Qatar Investment Authority (QIA), is investing in the energy transition and funding technologies that enable low carbon electricity generation. According to QIA Director, this is aligned with QIA’s mandate to deliver long-term value for future generations through responsible sustainable investments.² QIA is a founding member of the One Planet Sovereign Wealth Fund Working Group and has helped to produce a framework to integrate climate change analysis into investment decisions. Following Glasgow (COP 26), QIA announced that it will invest GBP 85 million in Rolls-Royce to fund low carbon technologies. In addition, recently, QIA invested in clean energy generation in sub-Saharan Africa (Qatar Investment Authority n.d.) alongside its prior solar energy investments and energy storage solutions. In terms of international collaborations, His Highness Sheikh Tamim bin Hamad Al Thani committed $100 million in 2019 to support small island developing and least developed countries to address climate change challenges. This gives an opportunity, a small nation itself, to showcase an example of efficient carbon management that could be replicated by other nations.

7.5 Embracing the Low Carbon Energy Transition

The new shift from Qatar’s national oil company, Qatar Petroleum to QatarEnergy,³ indicates the understanding of the changing market perception. It should be followed by an overhauling shift into strategic investments, transparent accounting, deployment of renewables, research, and development and to look for win–win partnerships that are unique to Qatar’s roles and opportunities. The shift is timely, Qatar indeed is no longer a petroleum country but also should not be an only gas exporter. Qatar focused on gas production and among the declining of oil production. The recent expansion project aims to boost the country’s LNG annual production from 77 to 126 million tons and will confirm Qatar’s dominance as an LNG exporter. It will increase the country’s LNG exports by 64%, and as a result, Qatar will have to manage both the methane and CO₂ emissions that will be produced. Recently, QatarEnergy put forth a plan to curb emissions from operations through applying energy efficiency, avoiding flaring and methane emission reduction. In addition to growing its renewable energy capacity by 2–4 GW by 2030 and implementing carbon capture and sequestration technology to capture its own CO₂ from 7 to 9 million tons per annum by 2030. It is estimated that these steps would be able to achieve a net carbon intensity reduction of 15% from upstream and about 25% from the LNG facilities by 2030, while reducing 0.2 wt.% methane intensity target by 2025 and zero routine flaring by 2030. QatarEnergy aims to have a mixed grid of 90% gas-based and 10% renewables by 2030 (QatarEnergy, n.d.).

7.5.1 Near-Term Gains

It is easier and cheaper for Qatar to produce LNG than other places in the world (King, 2021). Qatar has aided in the energy transition of several countries leveraging the low-cost production locally of natural gas, strategic georgical location, integrated supply chain, and favorable long-term gas contracts. Japan and Qatar’s energy relationship can be taken as an example. Japan was the first Qatari LNG importer, and after Fukushima nuclear accident, Japan switched off nuclear power and increased imports of Qatari gas. Similarly, LNG can help mitigate coal emissions, and emerging markets, such as China, India, and Brazil, would need natural gas as part of their energy mix. This seems to be the near-term direction of natural gas, QatarEnergy has signed a 20 years’ LNG agreement with the Republic of Korea (QatarEnergy, 2021c) and starting from 2022, Qatar will be supplying China with 3.5 million tons of LNG per year for over 15 years. While Europe is a massive investor and deployer of renewable energy, the Russian-Ukraine war has exposed the reliance of the European Union (EU) on Russian gas. Talks are starting with Qatar to become a supplier for the EU with similar moves from the United States (Kozhanov, 2022). Countries with major energy demands, such as Germany, have approached Qatar (Concha, 2022). The energy transition plans have put natural gas as a transition fuel, which extends Qatar’s LNG life in the near term.

7.5.2 Upcoming Threats

Geopolitics are unstable, and energy security is a priority for hydrocarbon importing countries. Prices and demand of any fuel may rise and fall according to weather, geopolitics, and supply. The price of LNG moves with the price of oil, however, renewable energy does not. Together with the motivation to lower the CO₂ footprint, massive investments were allocated for renewable energy technologies to improve their production, efficiency, and storage. The cost of renewable energy has significantly dropped. PV modules cost has fallen by around 80% since 2010, similarly, wind energy by 38% on average since 2009 with improved efficiencies (International Renewable Energy Agency, 2017a). Energy storage facilities at large scales are being piloted with significant effort in research to lower costs (International Renewable Energy Agency, 2017a). This includes shifting lithium-ion batteries to other cheaper formats using abundant resources (Kebede et al., 2022). Coupled with the increased deployment of green hydrogen production and electrification of the transport sector, the threat of demand reduction of fuel is a reality that hydrocarbon producers must address. Qatar’s existing infrastructure and history provide opportunity to be part of that energy transition. Technically, Qatar produces natural gas at a low cost and can produce cheap hydrogen using commercial technologies. To deal with the emissions, CCUS options and renewable energy can be integrated to lower the emissions. Early movers will be the winners in the next phase of the energy transition.

7.5.3 The Next Low Carbon Fuel

Hydrogen is a new frontier. The issue of hydrogen today lies in the complex supply chain as well as the energy intensive cost and transportation (IEA, 2019). Leveraging lessons learned from LNG, of integrating production, and working with ship manufacturers and end-users, Qatar—if moves swiftly—can take the leadership in this emerging market. Gas abundance and emission reduction technologies allow the production of efficient blue hydrogen. Indications of moving toward that direction can be seen in QatarEnergy’s recent agreement with Korea’s Hydrogen Convergence Alliance (H2Korea) for the development of the hydrogen sector in both countries, encouraging the growth of the hydrogen industry and expansion of the hydrogen supply (QatarEnergy, 2021a).

Liquid hydrogen transportation is complex and energy intensive (Ibrahim et al., 2021). This is due to the compression of hydrogen from gas to liquid. It produces major amounts of CO₂, as fossil fuels are used to power the compression. At the same time, issues of safety in storage and transportation especially in the form of pipelines, such as hydrogen imperilment, are still an active research area (Eljack & Kazi, 2021). Nonetheless, hydrogen can be transported in other formats such as ammonia, methanol, or in liquid organic carriers. Qatar already produces Ammonia at a large scale via Qatar Fertilizer Company (QAFCO) in the largest single combined ammonia-urea facility in the world (QAFCO, n.d.). The process is produced by converting methane (natural gas) to hydrogen and CO₂. The process itself produces a large amount of CO₂. However, this CO₂ can be combined with ammonia to produce urea, it can be also sequestered or used in CO₂ utilization, thus, lowering the carbon intensity of the end product. Other countries in the region have begun working on this, such as Saudi Arabia which invested in blue ammonia and sent the first shipment to Japan (Aramco, 2020).

On the other hand, transporting hydrogen in liquid organic hydrogen carriers (LOHC) could be another opportunity to lower hydrogen transportation costs. LOHC are petroleum products in which hydrogen could be dissolved and could be transported at atmospheric pressure. This means that hydrogen will not need to be compressed and thus lowering the energy intensity, and associated emission from the transportation process. The UAE, which has larger petroleum reserves than Qatar, has invested in liquid organic hydrogen carriers (CNBC, 2022), thus creating a secondary use for their main export in the low carbon economy. Similarly, Australia, with its own natural gas, has invested heavily in hydrogen production (Australian Renewable Energy Agency, n.d.). Australia’s advantage is its proximity to Qatar’s largest clients. For Qatar to be on the next wave, and remain an energy leader, hydrogen should be a part of the future mix. This can be done through investing in research and development (R&D) to improve production and transportation processes to enable wide hydrogen adaptation. Qatar has two advantages: the reliability and the relationships it has built alongside the trust of clients. Qatar did not break contracts during the blockade with blockading countries (such as UAE) (Alkhalisi, 2017) or during COVID-19 crisis (QatarGas, 2020). The hydrogen market will likely be introduced in the ‘hard to abate sectors’ with application of hydrogen fuels in industries such as heavy vehicles, shipping, industry, and in decarbonizing the heating sector. Knowing this, Qatar should invest in hydrogen production targeted toward those technologies (IEA, 2019).

7.6 The Path Forward

The energy transition, albeit working for Qatar in the short term, exposes it to vulnerabilities as a hydrocarbon producer in the long term. There will be a strong need to think of a holistic solution that does not just take into account managing local emissions or the next fuel, but a new market beyond responding to climate mitigation needs. There will probably be new markets emerging, and thereby opportunities and threats. Qatar will have to be adaptable and resilient, relying on innovation and evidence-based policies rather than reacting to climate policy changes and fluctuating demands. To achieve this, Qatar should invest in system analysis methods development and create knowledge for its own future.

7.6.1 Threat: Hydrocarbon Asset Desertification

Priorities of current natural gas clients are in achieving energy security, with it comes diversification of suppliers to lower costs and elevate supply chain instabilities. In addition, the need for climate action is of utmost importance, coupled with technological advancements of renewable energy which could result in a quicker transition pace. The risk is, then, a slow adaptation that could lead to severe impacts on the economy. Thus, economic diversification should be embedded in any future energy or climate policy (QNV, 2008). Qatar has already invested heavily in the oil and gas sectors, in the LNG market, and in petrochemicals (KPMG, 2021). Climate targets would lead to asset desertification, where billions of dollars’ worth of assets will be unneeded which would lead to loss of value and companies’ losses (International Renewable Energy Agency, 2017b). This was observed in coal companies. The failure to recognize market trends, slow response to shifting policies, and refusal to acknowledge newer technologies led to a downfall of the industry. Likewise, joint-venture partners, with pressures from shareholders, could decide to sell off assets to lower the company emissions by dropping the most pollutant assets in their portfolios.

7.6.2 Deployment of Systems Analysis: Evidence-Based Policies

Having the wrong policy without systems analyses could lead to disastrous effects (OECD, 2020). Policies should be studied holistically with the energy mix and carbon mitigation. Early or premature carbon policies could fail in achieving their economic and environmental objectives. Economically, tough carbon policies could lead companies to leave to other countries or regions with no climate policies in place. Thus, reducing profit and jobs in the country with the positive climate policy. Environmentally, the total CO₂ will not change as the company will continue emitting CO₂ into the shared atmosphere. This was observed in the European experiment with the Emission Trading Scheme (ETS) (European Commission, n.d.). While ETS initially reduced CO₂, it has been seen that some coal production picked up in Germany, where they were able to purchase carbon credits (Marin et al., 2017) and elongate the life of a carbon polluting technology. Thus, there is a need to conduct the analyses using diverse inputs and modeling methods.

Energy systems modeling is a quantitative method that can be combined with policy analysis, treatment, and carbon capture, and incorporate the uncertainty of economics and environmental parameters to guide policy design. Reducing the cost of climate action requires a comprehensive screening through the available emission reduction pathways to select the best ones. Optimization-based decision support methods have been developed to guide cost-optimal energy transitions (Chang et al., 2021) and CO₂ integration networks (Tapia et al., 2018). The different tools provide minimum-cost integrated systems as solutions for achieving a defined level of CO₂ reduction (Al-Mohannadi et al., 2020). Energy transition optimization models can also consider variations in renewable energy supply and demand to determine the optimal design of energy systems (Limpens et al., 2019). Minimum marginal abatement cost (mini-MAC) curve has been proposed to analyze the cost of integrated CO₂ source and reduction pathways and including renewable energy and CCUS pathways (Lameh et al., 2021). Using the Mini-MAC method, and accounting for about 80% of Qatar’s total emissions, the below curve was created (Fig. 7.3).

Fig. 7.3

Qatar’s abatement cost profile (Lameh et al., 2020)

The mini-MAC method was used to analyze emissions from gas-to-liquid facilities, steel production, power production from natural gas, cement, and natural gas processing. The reduction options considered were enhancing oil recovery (EOR), hydrogenation of CO₂ to methanol, georgical storage, CO₂ in greenhouses, and avoiding emissions by deploying solar power. It can be seen that Qatar’s emissions from the GTL facility can be used to generate profit if used in enhanced oil recovery and methanol production. The emissions from the natural gas processing facility can be implemented in greenhouses to enhance the yield of food production. Only after this utilization would Qatar apply solar energy, here it was capped at the 800 MW announced capacity. Larger segments could be implemented. The carbon sequestration option would only emerge as the last emission reduction technique.

Methods, such as the aforementioned, could guide policy and technological design. Qatar should invest in developing multiscale analysis that investigates the effect of disturbances such as geopolitical instability, market changes, or climate change policies on the cross-border supply chains. By applying scientific and engineering holistic thinking to developing strategies, it will enable stakeholders to assess different scenarios for various objectives such as environmental, economic, or security and stability. The approaches should be designed with a Qatari perspective to aid strategic planning and help guide future investments and partnerships.

7.6.3 Support Material, Energy and Resources Exchange, and Integration

In terms of near-term technological solutions, there are possibilities to reduce CO₂ in the industrial sector through having a common infrastructure that allows the exchange of power, heat, and other materials. On an industrial cluster level, Qatar should have a common utility sector, which allows industrial feed-in of excess electricity and heat. On an operational level, connect utilities, governments, and private sector partners to encourage innovation in areas that suit both government goals and private sector interests.

Taking the example of LNG supply, the liquification process of the natural gas requires a large amount of energy and is produced by burning some of the gas feedstock to supply power. Electrifying the compression using renewable energy or the use of mix grid (Lee et al., 2012) would reduce emissions and at the same time save natural gas feedstock that can be sold (Chiu, 2008). Coupled with detailed accounting, Qatar would be leading the carbon neutral LNG and would be in a better position to incorporate the next low carbon fuel.

Regionally, Qatar has an opportunity to export electricity to the rest of the Gulf Cooperation Council (GCC) via a common grid (Al-Maskati & Al-Asaad, 2007). The grid project will allow Qatar to feed into the grid, thus supplying electricity instead of transporting gas and thus reducing emissions. To be carbon effective, any electrical generation from hydrocarbons needs to be supplemented by CCUS. Electricity export is possible and has been deployed in Norway-EU (Buil, 2021). Norway generates a mix of hydropower, wind, and natural gas that is connected with the EU. At the same time, Norway is monetizing its natural gas wealth to feed into its sovereign wealth fund and to create local subsidies for low carbon technologies such as electric vehicles.

7.6.4 Investments in Research and Development (R&D)

Climate change even though is a global problem, solutions will have to be customized to the environment. Qatar has huge potential for CCUS deployment but needs a holistic plan for climate change from local R&D to support existing research initiatives. Knowledge is emerging from the R&D investments, such as those made via the Qatar National Research Fund and at research institutions, such as Qatar University, Hamad Bin Khalifa University, and Texas A&M University at Qatar. Use existing institutions and resources to develop region-specific technological research in niche areas to provide a comparative advantage (Meltzer et al., 2014). There is a need to create multidisciplinary groups compromised from academia, public, and private stakeholders to anticipate trends and empower these actors to innovate.

7.6.5 Leaning in Energy Diplomacy and Taking Climate Leadership

Qatar is well positioned to lead the climate transition, having access to the transition fuel with potential cost-effective local mitigation strategies. If it takes the opportunities available, it can be an example for others to follow. Qatar also represents both a hydrocarbon exporter and a developing nation that will be severely impacted by climate change. The small population and large industrial activity have given Qatar the reputation of being the highest emitter per capita, whereas, in reality, Qatar’s gas exports helped reduce global emissions by replacing more carbon intensive fuels. According to an analysis outlined in the Qatar Development Strategy, “Qatar would be ranked much lower if only emissions stemming from consumption were measured”(Planning & Statistics Authority, 2011). By communicating these challenges, threats, and perspectives, Qatar’s emission reduction efforts would be more effective at the international level.

In conclusion, methods would aid the government decision-making and regulation, and should be done quickly. Qatar must decide on a route beyond natural gas and should not waste time. It is well positioned, given its access to expertise and know-how that exist from years of being an energy leader. The reputation of being a reliable, stable, and trustworthy supplier should be maintained with data transparency of emission sources and accounting, and to provide the next product of the future. Qatar will have to diversify in the hydrocarbon sector itself to build resilience and continue monetizing the valuable resource.