Aramco, a top player in energy and chemicals, has teamed up with Siemens Energy. Together, they have launched Saudi Arabia’s first Direct Air Capture (DAC) test unit. The plant can remove 12 tons of carbon dioxide from the atmosphere each year. This initiative is a big step. It will help reduce Saudi emissions and promote carbon capture technology for a more sustainable future.
Ali A. Al-Meshari, Aramco Senior Vice President of Technology Oversight and Coordination, said:
“Technologies that directly capture carbon dioxide from the air will likely play an important role in reducing greenhouse gas emissions moving forward, particularly in hard-to-abate sectors. The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond. In addition to helping address emissions, the CO2 extracted through this process can in turn be used to produce more sustainable chemicals and fuels.”
Saudi Arabia Emissions
Aramco and Siemens Energy Push for Cost-Effective DAC Expansion
The press release revealed that Aramco will use the facility to test advanced CO2 capture materials for Saudi Arabia’s climate. The company also wants to lower costs. This will make DAC technology more affordable and easier to expand in the region.
Siemens Energy is a global leader in energy technology. The company helps industries and nations cut emissions in their energy sectors. They create reliable, affordable, and sustainable energy systems.
By partnering with Siemens, Aramco can quickly scale up its DAC technology. This move will pave the way for larger DAC projects in the future.
Expanding Carbon Capture Efforts
This initiative aligns with Aramco’s broader carbon capture strategy, a key element in its goal to achieve net-zero Scope 1 and Scope 2 emissions across its wholly-owned operated assets by 2050.
It is focusing on both point-source CO2 capture and removing CO2 from the air. This is part of its circular carbon economy approach.
Building One of the World’s Largest CCUS Hubs
This launch followed the announcement when Aramco, Linde, and SLB signed a deal in December last year. They will develop one of the biggest Carbon Capture, Utilization, and Storage (CCUS) hubs in the Jubail industrial zone. Aramco has a majority stake of 60%, with Linde and SLB each owning 20%.
Starting in 2027, the Jubail CCUS hub will capture up to nine million metric tons of CO2 per year. This hub will initially capture nine million metric tons of CO2 each year. It will take emissions from three Aramco gas plants and other industrial sources.
Future phases will boost capacity even more. This reinforces Aramco’s commitment to cutting emissions and promoting sustainability. By sharing CO2 transport and storage, industrial emitters can reduce costs and risks. They also benefit from economies of scale.
Aramco’s Innovative Carbon Capture Technologies
Other than the Jubail CCUS hub, Aramco has more innovative CCUS projects in its portfolio. They use the latest and cutting-edge technology and smart solutions to tackle emissions.
Hawiyah NGL CCS plant
The Hawiyah NGL plant captures 45 million standard cubic feet of CO2 daily. CO2 moves 85 kilometers to the Uthmaniyah oil reservoir. There, it increases oil production and stores carbon underground. This is part of Aramco’s long-term carbon management strategy.
Mobile Carbon Capture technology
Aramco is making vehicles cleaner. Its Mobile Carbon Capture technology traps up to 25% of a car’s CO2 emissions. The captured carbon is stored on board and later unloaded at fuel stations for recycling or sequestration.
The company is also developing cleaner fuels and engine technology. Aramco doesn’t see CO2 as waste. Instead, it transforms it into valuable resources for new materials and energy.
Natural Carbon Sinks
Nature is a key ally in Aramco’s fight against emissions. The company is restoring and planting millions of mangrove trees. These natural carbon sinks absorb CO2, boost biodiversity, and conserve water. They are also building algae ponds and photobioreactors. These will help capture more CO2, beyond just trees.
Aramco’s Commitment to a Low-Carbon Future
Aramco is dedicated to cutting emissions while supplying the world’s energy needs. The company invests in low-carbon projects to help Saudi Arabia reach net-zero emissions by 2060.
It also plans to achieve net-zero Scope 1 and Scope 2 greenhouse gas (GHG) emissions for its wholly owned assets by 2050, as per its sustainability report.
Emission Reduction and 2035 Target
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Upstream carbon intensity (2023): 9.6 kg CO2e per barrel of oil equivalent (boe).
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Scope 2 emissions (2023): 13.0 MMtCO2e under a market-based calculation.
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52 MMtCO2e targeted reduction by 2035 from its operations.
Aramco follows a structured approach focused on five key areas to achieve these targets. We explain them below:
1. Energy Efficiency
It focuses on energy efficiency to reduce emissions. The goal is to cut 7 MMtCO2e each year through energy-saving measures. Here are some techniques:
- Optimizing oil and gas operations to reduce waste.
- Using digital tools and AI to track energy use and find areas to improve.
Historic impact – Since 2000, Aramco’s Energy Management Program cut emissions by 31.43 million metric tons of CO2 equivalent (MMtCO2e) and aims to
2. Flaring and Methane Reduction
Reducing gas flaring and methane leaks is a top priority. They have invested in technologies like advanced sensors and satellite monitoring to quickly detect and fix methane leaks. The gas would otherwise be burned or released into the atmosphere.
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Flare gas recovery – In 2023, Aramco recovered 8.9 billion standard cubic feet (scf) of flare gas, preventing unnecessary emissions.
Notably, Aramco has one of the lowest upstream methane and flaring intensities in the global energy industry. Additionally, their upstream methane emissions decreased by 5.1%
despite an increase in natural gas production.
3. Carbon Capture and Storage (CCS)
As explained before, Carbon capture and storage is a major part of Aramco’s emissions reduction plan. With large-scale CCS projects in the pipeline, they aim to store up to 14 MMtCO2e per year by 2035.
The Jubail CCS Hub will play a major role in supporting the Kingdom’s target of capturing 44 MMtCO2e per year by 2035.
4. Expanding Renewables
Aramco is diversifying its energy portfolio. It invests in solar and wind power. The company is also exploring geothermal energy. This aims to further reduce emissions.
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Major investments – By 2030, Aramco plans to develop 12 gigawatts (GW) of solar and wind energy.
In January 2024, Aramco’s 1.5 GW solar project, one of the largest in the region, became fully operational. Its goal is to invest in research that makes renewable energy cheaper and more efficient.
5. Natural Climate Solutions
Third-party studies show Aramco’s mangrove projects have absorbed about 445,000 tons of CO2. Their algae farms and other biological methods capture CO2 from the air effectively.
- Carbon credit portfolio: They are also working on high-quality carbon offset projects. This helps balance emissions from tough-to-reduce sectors.
In conclusion, Aramco and Siemens Energy’s partnership is all set to transform Saudi Arabia’s carbon capture efforts. This collaboration marks a major step toward a cleaner, more sustainable future.
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The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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