Saudi Arabia’s Climate Change Policy and the Circular Carbon Economy Approach

During its Presidency of the Group of Twenty (G20) in 2020, Saudi Arabia launched the concept of the circular carbon economy (CCE) as a framework for reducing emissions to a level consistent with the goals of the Paris Agreement. The concept, which was endorsed by both G20 leaders and energy ministers, comes at a time when Saudi Arabia appears to have stabilised its domestic emissions after decades of rapid growth. This article describes the CCE concept and positions it alongside other related sustainability concepts, and assesses how it may be meaningfully applied. To that end, the article provides an analysis of key greenhouse gas (GHG) and carbon dioxide (CO2) trends in Saudi Arabia and existing climate change-related policies and measures using the CCE as a framing tool. Prominent data sources indicate that Saudi Arabia’s total CO2 emissions experienced their first-ever significant decline in 2018, of 3.93%. The analysis suggests that policy-induced variables, namely energy price reform and more robust energy efficiency measures, played a significant role in this. The article also explores the potential of key mitigation options if limiting global warming below 2°C is to be achieved. Finally, the article discusses the international significance of the CCE concept and its potential to foster stronger engagement on net-zero pathways, particularly from fossil-fuel rich countries and hard-to-abate sectors.Key policy insights The CCE approach aspires to promote holistic assessments of how various carbon management options fit together to achieve a carbon balance, or net-zero emissions.Saudi Arabia's adoption of the concept signals a stronger level of engagement on climate policy. CCE’s game-changing potential derives from how it allows aligning fossil fuel producers’ interests with net-zero emissions trajectories.A meaningful operationalisation of the CCE in Saudi Arabia will still require a stronger CO2 accounting framework, aligned with international measurement, reporting and verification (MRV) standards.Achieving an emissions pathway consistent with a 2°C global warming target in Saudi Arabia would require significantly more policy support for carbon capture and storage (CCS) and hydrogen in particular, along with a continued emphasis on renewable energy and energy efficiency.The CCE should also be seen as a tool to build bridges between fossil fuel importers and exporters for holistic discussions around energy transition..