Strategic Investment in CCS and CCUS: Enhancing Sustainability and Competitiveness of Gulf Oil and Gas Producers in a Transitioning Global Market

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In recent years, Gulf governments have taken significant steps to address the urgent challenges of climate change while attempting to sustain the economic benefits of their hydrocarbon industries. Among the tools available to balance reduced emissions with continued energy production, “Carbon Capture and Storage” (CCS) and “Carbon Capture, Utilization, and Storage” (CCUS) have emerged as key pillars in national decarbonization strategies. This report offers a Gulf-centric perspective on the deployment of CCS/CCUS technologies across the Gulf Cooperation Council (GCC), with a focus on the policy enablers needed to transition from pilot projects to large-scale implementation.

The Gulf Cooperation Council is uniquely positioned to lead in CCS development, given its:

• High CO2 emissions from low-cost capture industries such as natural gas processing, petrochemicals, and fertilizers;
• High-purity CO2 sources and substantial storage capacity in depleted reservoirs and saline aquifers;
• A competitive cost advantage in CCS and CCUS implementation, with decreasing costs and a lower cost base compared to other regions.

Coupled with the rise of “blue hydrogen” (hydrogen produced from natural gas and therefore not “green”), CCS and CCUS offer significant economic opportunities for the Gulf, including the creation of thousands of jobs, the protection of existing positions, and the decarbonization of its industrial sector. These technologies help maximize future oil and gas production, while also repurposing existing uses of oil and gas for export. By leveraging these advantages, Gulf countries have the potential to emerge as global leaders in the production and export of low-carbon hydrogen and commodities. They also hold promise for deploying carbon removal technologies like Direct Air Carbon Capture and Sequestration (DACCS) in the long term, reinforcing their environmental commitments.

Nevertheless, the large-scale deployment of CCS and CCUS in the Gulf faces significant hurdles—particularly regulatory uncertainty and the absence of strong domestic drivers such as robust business models and effective incentive schemes. For CCS and CCUS to succeed, governments must provide subsidies and decouple risks through separate models for capture, transport, storage, and utilization. An established carbon pricing mechanism and a system of incentives and penalties—carbon credits, for instance—are also essential to drive adoption and ensure economic feasibility. Otherwise, the gap between national pledges and operational capacity will continue to widen.

This report focuses on strategies to optimize CCS and CCUS facilities and investments to reduce greenhouse gas emissions, enhance efficiency, and maintain the competitiveness of Gulf oil and gas producers. Tailored approaches that reflect the unique economic and energy contexts of Gulf countries are critical for managing the transition from heavy reliance on oil and gas to a more diversified energy landscape.

Strategic developments are, nonetheless, underway. Saudi Arabia’s planned CCS hub at Jubail, the UAE’s Al Reyadah and Habshan projects, Qatar’s integration of CCS into its LNG expansion, and Oman’s innovation in mineralization through start-up “44.01” highlight the region’s ambition to incorporate CCS/CCUS initiatives into its national plans. However, without comprehensive policy frameworks, clear incentives, and robust investment pipelines, CCS/CCUS will remain a peripheral solution rather than a transformative force in the energy transition.

This report draws on expert analysis, data, and international best practices to offer a series of targeted policy recommendations. It calls for regulatory harmonization across the Gulf, expanded public-private partnerships, cross-border infrastructure planning, and greater alignment with global carbon markets. A roadmap for short-, medium-, and long-term CCS/CCUS development is also provided, detailing how the GCC can leverage existing capacities to secure climate resilience, industrial competitiveness, and economic diversification.

The successful deployment of CCS/CCUS in the Gulf is not merely a technological imperative but a strategic opportunity. If scaled effectively, these technologies can reinforce the Gulf’s position as a global leader in low-carbon energy and carbon management solutions.

This report is a product of the inaugural Gulf Studies Symposium. The Gulf Studies Symposium (GSS) stands as an annual gathering committed to advancing the depth of knowledge about the Gulf region. Our overarching mission revolves around the promotion of high-caliber scholarship and the facilitation of insightful analysis. We achieve this by meticulously orchestrating a series of workshops, with the ultimate aim of bringing forth publications that contribute to the academic discourse on the Gulf.

The views and opinions expressed in this report are those of the authors and do not necessarily reflect the views of Gulf International Forum.