Strategic Direction
A Sustainable Natural Environment that Supports Green Economy Growth
Strategic Direction
A Sustainable Natural Environment that Supports Green Economy Growth.
The environment priority contains Vision 2040’s most globally significant commitment: carbon neutrality by 2050. This aligns Oman with the Paris Agreement temperature pathways while also reflecting the existential vulnerability of a predominantly desert state with acute water scarcity and rising temperatures.
Performance Indicators
| Indicator | Baseline | 2040 Target |
|---|---|---|
| Environmental Performance Index | ~49.2 (2018) | >74.69 / Top 20 |
| Renewable Energy Capacity | 0.3 GW (2020) | 10 GW |
Carbon Neutrality 2050
Oman’s net-zero by 2050 commitment is one of the Gulf’s most ambitious decarbonisation pledges. The Oman Net Zero Centre, established in 2021, serves as the coordination hub for this transition.
The roadmap requires:
- Electricity generation: Transition from natural gas (currently ~80% of generation) to renewables
- Industry: Decarbonisation of aluminium, chemicals, and downstream oil and gas
- Green hydrogen: Creating a new green export economy to replace fossil fuel revenues
- Carbon capture: For residual emissions from oil and gas production
Renewable Energy: Significant Gap
Installed renewable energy capacity of approximately 1.2 GW (2024) compares against the 2030 target of 6.5 GW — requiring approximately 5-6x acceleration in six years. This is a significant gap that requires urgent policy response and accelerated IPP procurement.
Manah 1 and 2: The operational Manah solar plants represent meaningful but insufficient progress. The government’s programme of additional utility-scale solar and wind projects must accelerate substantially.
Green Hydrogen: Strategic Opportunity
Oman’s renewable energy resources — solar irradiation averaging 2,200 kWh/m²/year, coastal wind, vast land availability — create genuine competitive advantages in green hydrogen and ammonia production.
The investment pipeline exceeds $30 billion, anchored by:
- ACME Group: 2.5 million tonnes per annum green ammonia, Duqm
- Hyport Duqm (OQ + ENGIE): Export-scale green ammonia
- Multiple additional projects at various stages
Two new green hydrogen agreements were signed in 2024/2025, reflecting continued international interest in Oman’s green hydrogen potential.
Commercial risk: Green hydrogen economics remain challenging. The levelised cost of green hydrogen exceeds that of fossil-fuel alternatives, and the global market is nascent. Oman’s early positioning is strategically correct, but commercial viability at scale requires continued cost reduction in electrolysis and renewable energy.
Water Security
Oman is among the most water-scarce countries globally. Per capita renewable freshwater availability is critically low. Agriculture consumes the majority of freshwater. Climate change is reducing rainfall and increasing evaporation.
Vision 2040 addresses this through: desalination expansion, treated wastewater reuse (Oman is a regional leader), agricultural water efficiency, and managed aquifer recharge. Water security is not separated from energy security — desalination is energy-intensive.
Key Institutions
Ministry of Energy and Minerals, Environment Authority, Oman Net Zero Centre, Oman Power and Water Procurement Company (OPWP), OQ Alternative Energy.