- Saudi Aramco said it’s investing tens of millions of US dollars a year to help carmakers develop engines that are less prone to carbon emissions
- The move is aimed at ensuring sustainable demand for Aramco’s mainstay petroleum products
Saudi Aramco, the world's largest and most cost competitive oil producer, is investing "tens of millions of US dollars" a year to facilitate carmakers' development of vehicles that are more efficient and less prone to carbon emissions, according to a senior research executive.
The move is aimed at ensuring sustainable short to midterm demand for Aramco's mainstay petroleum products, which is key to the financial viability of the oil-dependent state-owned behemoth and its owner, the government of Saudi Arabia.
"Our business is (mainly) in liquid hydrocarbon fuel, (so) we aim to make sure its environmental impact is reduced to a point where it remains competitive for internal combustion engines," Amer Ahmad Amer, chief technologist at Aramco's research and development centre, said during a recent visit to its facilities in Dharan, Saudi Arabia, ahead of its impending initial public offering (IPO).
"There is an opportunity to look at the engine and the fuel as one system that can be optimised in a synergistic fashion, so that emission can be reduced from the oil wells to car wheels."
Aramco is doubling down on the internal combustion engine, at a time when the global automobile market is rushing to embrace electric vehicles, and hybrid petroleum-electric engines. Volkswagen, the worlds largest carmaker, has unveiled a plan to invest US$52 billion in electrification as it targets production of at least 2 million electric vehicles a year by 2025.
Aramco is researching into technology and engine design that would reduce internal combustion engines' carbon footprint and emission of particulates and nitrogen oxides that cause air pollution.
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Its "gasoline compression ignition" technology has been accepted by Japanese carmaker Mazda Motor, which is integrating it into its "spark controlled compression ignition" engine platform for a passenger car model to be launched by early next year, Amer said.
The GCI technology could cut carbon emission by a quarter compared to conventional spark-ignition engines by enhancing the efficiency of the gasoline engine and reducing fuel consumption.
In China, the world's largest car market, Aramco has been working with Beijing's Tsinghua University, state-owned vehicles giant FAW Group's unit FAW Jiefang Automotive Wuxi Diesel Works and oil refiner Shandong Chambroad Petrochemicals to introduce the GCI technology into a prototype fleet of FAW heavy-duty vehicles.
The oil behemoth was planning an IPO, estimated at US$20 billion, which would make it the world's biggest fundraising, in its domestic stock market. Global exchanges from New York to Hong Kong are racing to host a secondary listing.
Aramco is also researching into a "octane-on-demand" technology that seeks to lower consumption of high-octane fuel used mostly during acceleration, which could cut carbon emission by 13 per cent besides reducing fuel costs.
Technology that captures carbon dioxide for reuse in industrial applications such as oil production is also being piloted on Ford Motors' F-250 trucks, with a target for a pilot to successfully capture 40 per cent of carbon emission by the end of this year.
Some 52 per cent of the world's crude oil is consumed in the transport sector, of which 44 per cent is used by light vehicles, 33 per cent by heavy-duty ones and 23 per cent by aircraft and vessels, according to the International Energy Agency.
The global transport industry will need to contribute 17 per cent towards the need to halve the world's carbon gases reduction by 2040, to cap global warming to two degrees Centigrade over pre-industrial levels, the IEA estimated.
"For heavy-duty applications, where electricification is not feasible because of the size and weight of the batteries, internal combustion engines will continue to play a role," Amer said. "The biggest bang for us in the short to midterm until around 2040 is from improvements on the internal combustion engines until mass adoption of (sustainable pure electric) transport."
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