Saudi Arabia recently came under attack for allegedly trying to block negotiations on climate action, and it has been named among countries that have tried to downplay the urgency of such action. It is not the poster boy for net-zero ambitions. And yet, the Kingdom has some major ones in that respect.
Saudi Arabia announced plans to become a net-zero economy by 2060. This is a decade later than most economies have set as a deadline, but given its dependence on fossil fuels, it is quite understandable. In the meantime, however, Riyadh has signaled repeatedly that it would use its oil money for some ambitious projects, chief among them the $500-billion Neom smart city.
Neom is the flagship project of Vision 2030, Prince Mohammed's brainchild aimed at reducing Saudi Arabia's reliance on oil revenues. A smart megacity powered by wind and solar, and producing green hydrogen at a $5-billion facility, the project has often been questioned as perhaps a little too ambitious. The questions normally tend to rise when oil prices go down, but now that prices are high enough for Riyadh's comfort, news about Neom is once again hitting headlines.
The latest: Saudi Arabia's Crown Prince has announced another element of the megaproject, a floating industrial complex dubbed Oxagon. Oxagon, according to Neom's news release, would represent a radical new model for future manufacturing centers.
"OXAGON will be the catalyst for economic growth and diversity in NEOM and the Kingdom, further meeting our ambitions under Vision 2030. OXAGON will contribute to redefining the world's approach to industrial development in the future, protecting the environment while creating jobs and growth for NEOM," Prince Mohammed said in comments on the news.
The chief executive of Neom, the corporate namesake of the project that runs it, chimed in, saying Oxagon will lead to a change in how people see manufacturing centers and noted there are already companies eager to set shop in the floating structure.
As for what the structure-called a city by Neom-would actually include, CEO Nadhmi al-Nasr mentions an "integrated port and logistics hub that will house the majority of the city's anticipated residents." He then goes on to describe " a seamless integrated, intelligent and efficient supply chain," made possible by "the adoption of the most advanced technologies such as the Internet of Things (IoT), human-machine fusion, artificial and predictive intelligence, and robotics, all of which are coupled to a network of fully automated distribution centers and autonomous last-mile delivery assets."
Based on the information in the release, it appears that, like the bigger Neom project, the Oxagon will focus on advanced technology such as space and robotics, but also things like autonomous mobility and what the company calls water innovation.
Naturally, the emphasis is being put on the renewable energy aspect of the project. The city within the city will be powered by 100-percent renewable power, Neom promises, and the residents will be able to live in enhanced harmony with nature thanks to the special floating design of the structure.
Now, Neom is supposed to be completed in just four years. Besides Oxagon, it should also include The Line, "a revolution in urban living at NEOM, and a blueprint for how people and planet can co-exist in harmony." Neom describes The Line as "a 170km belt of hyper-connected future communities, without cars and roads and built around nature, is a direct response to some of the most pressing challenges facing humanity today such as legacy infrastructure, pollution, traffic, and human congestion."
The whole Neom project sounds a lot like the basis for a sci-fi script. Whether this script will turn into a movie is yet to be seen. Investments appear to be slow in coming, although some high-profile companies such as Oracle and Huawei have made commitments. Reuters reported earlier this week Riyadh has been having trouble hitting its foreign direct investment targets, and by quite a margin: 2020 FID plans stood at $19 billion, but the actual FID was just $5 billion.
Instead of getting discouraged, the Kingdom has only become more ambitious. According to the report, Riyadh now eyes $100 billion in foreign direct investment by 2030, which is less than the cumulative foreign direct investment since 2011, according to analysts. The Oxagon, and Neom as a whole, seems a big part of that ambition.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More