Adnoc Distribution to reduce carbon intensity by 25% by 2030
- 20 Jan 2023
Adnoc Distribution announced plans to reduce its carbon intensity by 25 per cent by 2030. This will be implemented by putting sustainability at the core of its day-to-day operations to future-proof its business and deliver sustainable long-term shareholder value.
Central to Adnoc Distribution’s enhanced sustainability drive is a commitment to decarbonise its operations by reducing its Scope 1 carbon emissions, which come directly from its operations, and its Scope 2 carbon emissions, which come from the energy it uses to run its operations.
The company said it will install solar panels to power service stations and use biofuels in its fleet of vehicles, in addition to expanding its network of EV charging stations. It will utilise “green concrete”, which is eco-friendly and has a smaller carbon footprint than traditional concrete, to construct new service stations.
Adnoc Distribution has also become the first UAE fuel and convenience retailer to tap into sustainable financing by converting an existing $1.5 billion (Dhs5.5 billion) term loan into a sustainability-linked one in partnership with First Abu Dhabi Bank (FAB) as ESG Coordinator.
Adnoc Distribution has committed to a penalty/incentive Sustainability Linked Loan which ties the loan to sustainability indicators. In addition to FAB, Abu Dhabi Commercial Bank, Bank of China, Industrial and Commercial Bank of China, and Standard Chartered Bank are parties to the loan.
Bader Saeed Al Lamki, CEO of Adnoc Distribution, said, “By decarbonising our business through greater energy efficiencies and the use of cleaner fuels and linking our financing objectives to sustainability indicators, we are placing sustainability at the core of our day-to-day operations, ensuring we continue to future-proof our business and deliver sustainable long-term shareholder value.
“The adoption of a sustainable energy mix for our fleet of vehicles and the use of solar energy in our service stations, in addition to rolling out lower carbon intensity products for our customers, underlines our commitment to driving sustainable growth through constant innovation in new energy solutions.”
Al Lamki confirmed Adnoc Distribution will apply its sustainability initiatives across its entire network in the UAE and Kingdom of Saudi Arabia.
In 2022, Adnoc Distribution introduced the Voyager Green Series range of lubricant products for both petrol and diesel engines, made from 100 per cent plant-based base oil, as part of its overall strategy to continue expanding sustainable and environmentally-friendly products.
As the UAE’s largest fuel retailer, Adnoc Distribution has already been offering alternative fueling operations across its network, including compressed natural gas fuel available at 31 of its UAE stations and a fully dedicated Abu Dhabi station.
Meanwhile Adnoc Distribution and Abu Dhabi National Energy Company (Taqa) agreed to work together to establish a mobility joint venture, E2GO, to build and operate electric vehicle (EV) infrastructure in Abu Dhabi and the wider UAE.
An agreement to pave the way for creating the joint venture was signed by CEO of Adnoc Distribution Bader Saeed Al Lamki, and Group CEO and MD of Taqa Jasim Husain Thabet and was unveiled during the Abu Dhabi Sustainability Week (ADSW 2023).
Demand for EVs in the UAE market has witnessed a steady rise over the past years and is projected to see a compound annual growth rate (CAGR) of 30 per cent between 2022 and 2028 according to the global electric mobility readiness index published in 2022.
E2GO comes at an opportune time in the development of the UAE’s EV market, with an expected 70,000 charging points considered to be required in Abu Dhabi by 2030 to meet growing EV demand. To support this demand, an investment of up to $200 million of CAPEX will be needed for this critical infrastructure.
Backed by two Abu Dhabi national energy champions, E2GO aims to become the principal provider of EV charging points and associated infrastructure across the Emirate of Abu Dhabi.
The partnership will include a network of fast chargers at key locations, featuring associated solutions such as parking and tolling services, in addition to related digital platforms to facilitate EV charging, which will enhance customer service and unlock new revenue streams. The project aligns with the UAE’s Net Zero by 2050 objectives by contributing to a reduction in emissions from transport.
The new venture is supported by a new regulatory Policy for Electric Vehicle Charging Infrastructure in Abu Dhabi that the Abu Dhabi Department of Energy recently launched, in a significant step forward to provide the right policy framework to support a circular carbon economy as the UAE advances its plans to achieve the net zero ambition.
