By Zoe Knight

The arrival of COP27 and COP28 to the Middle East makes our region the focus of international efforts to implement energy transition as part of the shift to a net zero carbon global economy.

The example the Middle East sets will be a guiding light for others, because if the world’s most important region for traditional energy production can get the transition right, it means everyone can.

Access to capital on a global scale is critical, both to fund emerging green energy solutions, and to ensure that existing energy and industrial giants have the support needed to transition their own businesses to net zero.

Saudi Arabia plans to scale up the share of gas and renewables in its energy mix to 50% each by 2030. The UAE has pledged to improve energy efficiency by 40%, reduce emissions from the energy sector by 70%, and increase the share of renewables in the energy mix to 44%. And Egypt aims to make 42% of the country’s energy mix renewable by 2035 while cutting energy subsidies.

The good news is that investment in renewables across the region is gathering pace. The Benban solar power plant in Egypt — the largest in Africa and fourth-largest in the world — is an example of how we’ve supported a client, FAS Renewable Energy, in their commitment to support Egypt’s transition to a greener economy.

In addition, funding to decarbonize existing technology and industry, develop green hydrogen and its derivatives has enormous potential for the Middle East. Projects are already under way in Oman, UAE, and Egypt in the Suez Canal Economic Zone (SCZone).

Delivering a net-zero outcome is going to require significant progress and acceleration of carbon removal technologies, such as carbon capture, utilization and storage (CCUS). The UAE’s ADNOC has pioneered CCUS in the Middle East at its Al Reyadah plant in Abu Dhabi, the first in the world to capture carbon from the iron and steel industry. We hope more such facilities will follow across the region.

HSBC Egypt recently signed an agreement with other energy transition leaders to decarbonize existing oil and gas downstream facilities, with the ambition to provide execution, technology, and financing expertise to support the decarbonization of select downstream facilities across the country, aligning plans with Egypt’s leadership of COP27.

Designing and creating energy and industrial systems that offer both climate security and energy efficiency is complex, requiring intense collaboration. I believe that HSBC, with our global scale and the nature of our business — providing finance to enable economic and social development around the world — can deliver this convening power.

The hard truth about transition is that huge access to capital is required. The Energy Transitions Commission (ETC) estimates around USD 4 tn per annum average capital investment is needed in energy, built environment, and harder-to-abate sectors such as shipping, steel, and cement, to achieve net zero by 2050.

That capital must come from a variety of sources. So must the ideas for making transition real. HSBC’s net zero strategy is centered around supporting clients to make the transition, and I believe we can make the strongest impact by helping develop tailored solutions for reducing emissions, taking into account the unique needs of industries, businesses and geographies.

I invite you to join the conversation on what is needed to make this happen by registering for our Energy Transition Webinar series, which starts next week. Join us as we discuss the latest climate analysis, the global energy market and progress on transition to net zero. Hear from policymakers, industry experts, businesses and climate tech players, helping to facilitate the transition of the energy system and wider climate goals on the route to COP27 and beyond.

Zoe Knight (LinkedIn) is HSBC’s Group Head, Centre of Sustainable Finance and Head of Climate Change Middle East, North Africa and Turkey