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Saudi Aramco shrugs off electric car threat

Saudi Aramco is investing in new technologies to improve fuel efficiency and reduce emissions © Getty

Improving the efficiency of traditional vehicle engines is a more effective way of tackling climate change than waiting for electric cars to gain significant market share, Saudi Aramco’s technology chief said on the eve of the Detroit auto show.

“The internal combustion engine is here to stay,” Ahmad Al Khowaiter said on a tour of the world’s largest oil group’s research plant near Detroit, where it is investing in new technologies to improve fuel efficiency and reduce emissions.

While investors increasingly focus on the long-term threat that electric vehicles pose to the oil industry — and especially to Saudi Aramco ahead of its plans for a record-breaking stock market listing this year — Mr Al Khowaiter said his company was investing in improving internal combustion engines, which power 99 per cent of the world’s vehicles.

He said it was generally viewed that by mid-century about 90 per cent of transport would still be powered by the internal combustion engine, meaning the “greatest opportunity” to cut greenhouse gas emissions was by improving the engine.

He added that this would have a “dramatic effect on emissions from the sector immediately, whereas we have to wait for the growth of the alternatives to really have an impact”.

Saudi Arabia believes there will be future demand for its oil, as emerging economies in Asia and Africa grow. But as a global shift towards greener fuels takes place, the kingdom has sought to develop new industries and technologies — from chemicals to cleaner car engines — to prolong the life of Saudi oil.

Despite a push by the powerful Crown Prince Mohammed bin Salman to move the country’s economy beyond oil, Saudi Arabia — one of the lowest-cost producers in the world — still relies on its resource riches to generate the bulk of the kingdom’s revenues.

Mr Al Khowaiter’s comments come as several governments around the world threaten to ban traditional engines in future decades, leading global automakers to invest heavily in looking for alternative ways to power the vehicles of the future.

This week’s Detroit auto show takes place against a backdrop of unprecedented turmoil in the global auto industry, which is scrambling to prepare itself for a future in which cars increasingly are shared, drive themselves, and are powered by fuels other than petrol or diesel.

But traditional automakers are also investing heavily in improving the internal combustion engine at the same time, and Saudi Aramco is working closely with them to do so, Mr Al Khowaiter said.

Aramco’s Detroit research centre is working on technologies such as gasoline compression ignition (GCI) which delivers diesel-like fuel efficiency from petrol, with much lower emissions as well as on mobile carbon capture, a technology that allows vehicles to capture their own CO2 emissions and store them on board, to be offloaded later. But Mr Al Khowaiter said that technology was likely to be some years away from commercialisation.

Additional reporting by Anjli Raval in London

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