Fadi Al-Shihabi, sustainability solutions lead, KPMG Middle East. (Image source: KPMG)

Fadi Al-Shihabi, sustainability solutions lead, KPMG Middle East, discusses how decarbonisation is transforming the lubricant oil industry and accelerating the Middle East’s journey to net zero

The lubricant (lube) oil sector is under growing pressure to minimise its environmental footprint as industries worldwide confront the realities of climate change. A rapidly growing industry in the UAE, it is currently estimated at 166.27mn litres, and is expected to reach a staggering 202.68mn litres by 2030. In the Middle East, where the current lubricant market is estimated at 2.94 billion litres and expected to reach 3.31bn litres by 2030, similar trends are evident in Saudi Arabia, Oman, and Qatar.

From the automotive industry to power generation, the lubricant oil sector is a widely growing area. It plays a critical role in keeping engines, machinery, and industrial systems operating efficiently, but its traditional production, packaging, and end-of-life management contribute significantly to greenhouse gas (GHG) emissions.

According to the International Energy Agency (IEA), oil and gas operations, including extraction, processing, and refining, account for approximately 5.1 Gt CO2e annually, or about 15% of global energy sector emissions. To remain on track for net-zero by 2050, these emissions must fall by over 60% by 2030.

The UAE has set itself enormous emissions targets – the UAE Net Zero by 2050 strategic initiative aims to achieve net-zero emissions by 2050 – with stakeholders in key sectors, including energy, implementing projects to decarbonise in line with their needs and growth requirements. Saudi Arabia’s Circular Carbon Economy framework and Oman’s Net Zero 2050 pledge echo similar decarbonisation ambitions.

The deployment and use of clean energy solutions is one of the UAE’s main pillars to address climate change and reduce GHG emissions. The country began financing clean energy projects more than 15 years ago and has invested over US$40bn in the sector to date. The Middle East region as a whole is set to receive over US$75bn in investments for renewable energy projects by 2030, according to a report released by the Energy Industries Council (EIC). Ahead of the COP28 summit in the UAE in 2023, more than 60 top executives from the oil and gas, cement, aluminium and other heavy industries agreed to cut their emissions to meet their climate obligations.

Within the lubricants sector, electrifying process heat, cutting methane leaks, and using low-emissions hydrogen, particularly in energy-intensive refining steps like hydrotreating and hydroisomerisation, are vital for efficiency improvements. These innovations are critical as it is estimated that a single liter of lubricant can generate over 3.5 kg CO₂e. Refineries across the GCC are piloting hydrogen and CCUS technologies to curb emissions in lubricant production.

Innovation powering the lubricants industry

The journey of lube oil begins with crude oil extraction, followed by vacuum distillation to separate heavier fractions suitable for base oil production. These base oils undergo further refining processes such as hydrotreating, hydroisomerisation, dewaxing and other processes, enhancing their viscosity, stability, and longevity.

Recent innovations in catalyst technology and feedstock selection are driving both product quality improvements and emissions reduction. Producers are also blending biomass-derived feedstocks with conventional inputs to create lower-carbon base oils. These bio-based oils perform similarly to fossil-based ones but have less carbon footprint and can be processed using existing infrastructure. Scientists are also exploring entirely renewable base oils.

However, innovation doesn’t stop at production. Digital monitoring tools help reduce lubricant waste during use. For example, Finnish company Lassila & Tikanoja installed real-time oil monitoring across its hydraulic systems and reduced oil use by 13,400 litres over four years, saving around 10 tonnes of CO₂e annually. They also cut lubricant-related emissions by up to 80% through smarter maintenance without affecting performance.

Packaging and handling

When it comes to packaging, manufacturers are increasingly optimising designs by reducing material use and enhancing handling and distribution. While traditional rigid plastics and metals have historically provided the necessary protection, they also present significant challenges in terms of disposal and GHG emissions.

Consequently, the lubricant industry is undergoing a transition toward low-carbon packaging alternatives that can maintain safety and performance while addressing environmental concerns. Lightweighting and design optimisation reduce raw material demand, shipping weight, and CO2 emissions per litre delivered, without compromising safety or performance.

TotalEnergies has been at the forefront with the integration of 50% post-consumer recycled (PCR) HDPE in its premium lube oil bottles, launched in France and Belgium since September 2023. These bottles retain the same weight, design, and performance while significantly reducing the carbon footprint.

Lowering cradle-to-grave emissions

Beyond production and packaging, extending lubricant life is key to decarbonisation. Modern additives have enabled lubricant change intervals to increase from 5,000 km in legacy vehicles to upwards of 30,000 km in modern engines.

Bio-based or biomass-balanced additives further support environmental goals by reducing the emissions linked to additive manufacture and enhancing overall oil performance. The result is less frequent oil manufacture, transport, and disposal.

As the UAE accelerates its journey towards decarbonisation, these steps will be crucial in ensuring the responsible end-of-life management of lube oils. Technological advancements and environmentally friendly formulations will create new growth avenues and set a new benchmark in the UAE’s industrial revolution. As neighbouring countries pursue similar ambitions, regional collaboration in innovation and policy will be key to transforming the Middle East lubricant landscape.

Shipping is seen as one of the most promising opportunities for low-carbon ammonia and methanol. (Image source: Adobe Stock)

While ammonia and methanol are gaining traction as low-carbon fuels and hydrogen carriers to support the global energy transition, large-scale adoption is slow due to uncertain demand, says data and analytics company GlobalData

Demand for low-carbon ammonia and methanol is being driven by industries such as shipping, power generation, fertilizers, and chemicals, given their potential to decarbonise existing operations. GlobalData’s Strategic Intelligence report, “Ammonia and Methanol in Energy Transition,” reveals that countries such as Japan, South Korea, China, and members of the European Union are backing low-carbon projects, while companies including Yara, Maersk, CF, and Mitsubishi are exploring large-scale investments to boost their production.

Low-carbon ammonia capacity is estimated to grow to nearly 250 million tonnes per annum (mtpa) by 2030, with more than 460 upcoming plants globally. Low-carbon methanol is also projected to grow, with plant numbers approaching 150 by 2030. However, many projects are in early stages of development, with some hydrogen-linked initiatives already seeing delays or cancellations.

The report also highlights that low-carbon ammonia and methanol are closely linked to the scaling of hydrogen, acting as carriers for transport and storage. However, growth depends on stronger infrastructure commitments, technology advancements, and regulatory requirements. Shipping is seen as the most promising immediate opportunity, but significant investment and regulatory clarity are required to move beyond pilots.

Ravindra Puranik, Oil and Gas analyst at GlobalData, commented, “Low-carbon ammonia and methanol could complement the energy transition by acting as fuels and hydrogen carriers, but their role is far from guaranteed. Cost competitiveness, safety standards, and infrastructure development will be critical. Without supportive regulation and faster project execution, many of the current net-zero ambitions may not translate into reality.

“Low-carbon ammonia and methanol initiatives had a promising start earlier this decade. However, the pace of development is already slowing, with some high-profile hydrogen projects seeing cancellations or postponement. Combined with high production costs and technical challenges in handling, this raises doubts about whether low-carbon ammonia and methanol can achieve the scale once envisioned. These challenges underline the gap between announced capacity and what will realistically materialise by 2030.”

Steel remains one of the most carbon-intensive industries

Sustainable technologies are attracting unprecedented attention across sectors, particularly as the global shift toward net zero intensifies.

From the increasing use of low-carbon hydrogen in industries like green steel to the development of alternative fuels and renewable energy solutions, companies are actively seeking viable pathways to decarbonise.

IDTechEx’s Energy & Decarbonisation and Sustainability Research Reports provide in-depth coverage of these trends, exploring cutting-edge technologies and their impact on various markets.

The steel industry’s role in emissions

Steel remains one of the most carbon-intensive industries, and demand continues to rise due to global population growth, accelerating industrialisation, the AI-driven expansion of data centres, and the rollout of renewable energy infrastructure. As a result, efforts to decarbonise steelmaking have become critical.

The traditional blast furnace route, still the dominant method for crude steel production, emits roughly 2.3 tonnes of CO₂ per tonne of steel produced. This poses significant sustainability challenges and is pushing regulators to tighten emissions controls and promote low-carbon alternatives.

Electric arc furnaces (EAFs), often used in steel recycling, offer a cleaner alternative. When powered by renewable electricity, EAFs can enable near-zero-emission steel production. This method is already in use and forms the backbone of green steel projects. When paired with direct reduced iron (DRI) technology, hydrogen can be used as a reducing agent instead of fossil fuels. IDTechEx’s report Green Steel 2025–2035 explores these technologies in detail, outlining their benefits, challenges and commercial potential.

Hydrogen as a low-emissions alternative

Green hydrogen, produced via water electrolysis using renewable energy, is emerging as a viable low-carbon energy carrier. It is particularly suited to sectors where electrification is difficult or inefficient. Companies already using hydrogen in industrial processes, such as chemical manufacturers, fertiliser producers and refineries, are expected to lead the early adoption of green hydrogen, given the relatively minor adjustments required to existing infrastructure.

Heavy industries such as steel and long-haul transportation are likely to be major consumers of green hydrogen up to 2040. Hydrogen fuel cells are gaining traction due to their faster refuelling times and longer range compared to batteries. In these cases, green hydrogen provides a sustainable energy source that aligns with decarbonisation goals.

Beyond 2040, green hydrogen is expected to play a growing role in power generation, aviation, and long-duration energy storage, though cost remains a key barrier. Progress in water electrolyser technologies will be crucial to scaling green hydrogen. Advances in component innovation and reduced dependence on critical raw materials will help drive adoption. IDTechEx’s report Materials for Green Hydrogen Production 2026–2036 covers the key technologies and suppliers supporting this evolution.

Green energy technologies rely heavily on advanced materials. Composite materials like carbon fibre offer the strength and lightweight properties needed for efficiency and durability. However, their own production processes can be energy-intensive and difficult to decarbonise.

Also read: Advanced tracer technology for CCS monitoring

ANRPC personnel. (Image source: ANRPC)

Mitsubishi Power has completed a groundbreaking hydrogen fuel conversion project at the Alexandria National Refining and Petrochemicals Company (ANRPC) refinery in Egypt, the first industrial application of hydrogen use as fuel in an industrial boiler in Egypt and the MENA region, according to the company

Mitsubishi Power carried out the design, engineering, supply and installation of the equipment and control systems to rehabilitate and upgrade a 100-ton-per-hour main boiler, converting it from heavy fuel oil and natural gas to a 100% hydrogen fuel. The project also contributed to the utilisation of 14,000 tons per year of hydrogen-rich gases available in the production units, reducing natural gas consumption by around 24,000 tons and contributing to a reduction of carbon emissions by approximately 65,000 tons per year.

This project marks a significant step forward in Egypt's energy transition and decarbonisation goals, as well as its aim to become a leader in the global hydrogen economy, while highlighting the potential of hydrogen as a clean energy source in Egypt’s industrial sector.

Mitsubishi Power's expertise in providing cutting-edge hydrogen technology solutions, combined with ANRPC's operational leadership, contributed to the project's success, in a model that it is hoped can be replicated to drive forward further hydrogen adoption across Egypt and the MENA region.

Sayed Al-Rawi, chairman and managing director of ANRPC, said, "We are proud to be part of Egypt's journey towards a clean energy future and to contribute to achieving Egypt Vision 2030 with this pioneering milestone to using hydrogen as a fuel. This project represents an unprecedented achievement for ANRPC, Egypt, and the entire region. By integrating hydrogen into refining processes, we are contributing to reduce Egypt's carbon footprint and set a new standard for the country's industrial sector.”

Javier Cavada, president and CEO, Europe, Middle East and Africa at Mitsubishi Power, added, "The success of this first-of-a-kind hydrogen conversion project marks a milestone in Egypt's transition to clean energy and reflects Mitsubishi Power's global leadership in developing advanced, low-carbon power generation technologies. This project will lay down the foundation to a commercial path for decarbonizing Egypt's industrial facilities with minimal downtime, in addition to demonstrating the tangible and positive impact of hydrogen in reducing emissions and developing sustainable energy solutions."