This oil capital wants to be a hub for climate tech

(CNN) — Abu Dhabi isn’t about to wean itself off the oil that made it super rich. But it is putting some of that wealth to work in support of startups trying to find solutions for the climate crisis.

In April, Abu Dhabi tech ecosystem Hub71 announced its first-ever program designed to support decarbonization technologies, which included five startups focused on solutions for sectors ranging from energy to aquaculture.

“The climate agenda is very important to the leadership of the UAE,” Ahmad Ali Alwan, the CEO of Hub71, which is backed by state fund Mubadala Investment Company, told CNN. “So we identified it to be a priority sector which we want to enable.”

“There’s a lot of support for innovative solutions,” he said, and “a focus on developing solutions that are actually commercial.”

The United Arab Emirates, a federation of seven emirates including Abu Dhabi and Dubai, was the first Gulf country to commit to net zero carbon emissions by 2050. In recent years Abu Dhabi has funneled tens of billions of dollars into supporting renewable energy projects and carbon reduction technologies, and restored some 6,400 hectares of mangroves, which can absorb carbon dioxide from the atmosphere.

Alwan says that about 20 of the more than 220 startups involved in Hub71’s programs can be put into the sustainability and climate technology bucket. Now that the ecosystem has a program dedicated to these companies, he expects that number to grow.

Hub71 plans to announce a new cohort later this year, and it says that applications from sustainability and climate tech startups have doubled since the last intake.

Abu Dhabi is far from abandoning fossil fuels. Oil production accounts for about 46% of its economy.

The UAE, a member of the Organization of the Petroleum Exporting Countries (OPEC), has in recent years found itself at odds with the group’s leadership. OPEC and its allies have been limiting oil output to prevent a glut and bolster prices. Meanwhile, the UAE has been pushing the alliance to raise its production quota.

State-owned oil giant Adnoc wants to increase its capacity to five million barrels per day by 2027. It will spend $150 billion to meet that target, according to S&P Global.

Reshaping its economy

Abu Dhabi’s continued dependence on oil has caused doubts in some quarters about its commitment to decarbonization.

But experts say the government is planning ahead to reshape its economy. Patricia Keating, of consultancy PwC Middle East, told CNN the government has laid out a forward-looking diversification strategy focused on how it can grow sustainably.

“Abu Dhabi is starting to forge ahead as a leading tech cluster for climate in the region,” she said.

The city has a concentration of venture capitalists and investment funds, attractive regulation and corporates that need to decarbonize, she added, giving it an edge in the climate technology space.

Companies in the latest Hub71 cohort include a startup that provides oil and gas plant engineers with real-time recommendations about how to reduce emissions, and another focused on mitigating gas flaring — the burning of or releasing of natural gas that comes out of the ground during oil production, which contributes to climate change.

Another, called Graphmatech, is a spin-off from Sweden’s Uppsala University, and claims its graphene technology can make the hydrogen industry more sustainable, efficient and safer.

When hydrogen is burned or used in a fuel cell, the major biproduct is water, instead of atmosphere-warming carbon dioxide. This makes the energy source a lower emissions option compared to other fuels that pollute more.

That Abu Dhabi has thrown its weight and oil wealth behind climate tech is a key attraction for Graphmatech.

“To scale up climate tech you need financial support,” Dr Mamoun Taher, its founder and CEO, told CNN. “Abu Dhabi is known globally to have financial muscles.”

Experts believe that green hydrogen, which is produced with renewable energy, can play an important role in decarbonizing hard-to-abate sectors, like heavy industry and long-distance transport.

An emerging industry

Countries from the United States to Australia are working to develop their own hydrogen industries, and the UAE wants to become one of the world’s largest producers of the element by 2031.

It plans to produce “low-carbon” hydrogen generated from a variety of sources, including renewable and nuclear energy, and fossil fuels paired with carbon capture and storage.

There is work underway in the UAE to push hydrogen technology forward. Masdar and Emirates Steel Arkan are developing a pilot project to demonstrate the possibility of using green hydrogen, instead of natural gas, to make steel. Steel production accounts for about 8% of global emissions.

Hydrogen, though, is known to leak. Not only is that wasteful, it can also lead to explosions and exacerbate global warming.

Taher says his graphene technology can reduce the leakage of hydrogen by up to 85%. His company has engaged in discussions with key stakeholders in Abu Dhabi, including oil and gas companies.

“What makes Abu Dhabi unique is the access to the early adopters for our technology,” he said.

Companies including Adnoc, Siemens Energy and Abu Dhabi National Energy Company (TAQA) are supporting the Hub71 program with funding or commitments to run pilot programs with promising solutions, or both — potentially allowing climate startups to use the UAE as a test bed for their technologies.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.