To what extent can international CCS policy instruments be applied in Saudi Arabia, given the country’s state-led decarbonization model?

Abstract

This study aims to assess the transferability of five international carbon capture and storage (CCS) policy instruments in the Saudi Arabian context, taking into account the Kingdom’s Vision 2030 objectives, net- zero target, and state-led decarbonization model. Meanwhile, global CCS policy frameworks, such as performance-based subsidies (45Q), Carbon Contracts for Difference (CCfDs), CCS clusters, state-owned enterprise (SOE)-led models, and carbon crediting mechanisms like the Emissions Trading System (ETS), have accelerated deployment. However, their direct applicability to a hydrocarbon-dependent, centrally governed economy remains under-explored. The dissertation employs a qualitative comparative policy analysis structured through a framework that evaluates five key dimensions: Institutional Compatibility, Market Structure Fit, Economic Feasibility, Technical Readiness, and Proven Effectiveness. The derived insights were based on both secondary data (academic and grey literature) and primary data collected through five expert interviews with stakeholders from government, state-owned enterprises, research institutions, and international organizations. For the Interview data, thematic analysis was used, which identified converging and diverging perspectives on the feasibility of each policy instrument in the Saudi context. The findings of the dissertation indicate that SOE-led models and CCS clusters exhibit the strongest institutional and market alignment with Saudi Arabia’s governance structure and industrial landscape, and provide immediate pathways for CCS scale-up. In contrast, performance-based subsidies and CCfDs exhibit partial adaptability but would require fiscal and regulatory reforms. Whereas crediting mechanisms, such as emissions trading systems and the Greenhouse Gas Crediting and Offsetting Mechanism, remain institutionally premature. The study argues that a phased approach, anchored in SOE- led clusters, followed by targeted incentive mechanisms and eventually market-based tools, can provide the most viable sequencing for CCS deployment in Saudi Arabia. By situating CCS policy within the Kingdom’s broader circular carbon economy and net-zero strategy, this study contributes to the literature on policy transfer in resource-dependent states. It demonstrates how institutional context conditions the adaptation of international climate policy and provides lessons for other hydrocarbon economies pursuing industrial decarbonization.