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.
The post Aramco’s First-Of-Its-Kind Direct Air Capture Plant Powers Saudi’s Net-Zero Mission appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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