Strategic Vision
An environment with sustainable components: safe and well-preserved environment, with effective and balanced ecosystems and renewable resources.
Priorities under this pillar:
- Environment and Natural Resources
Overview
The Sustainable Environment pillar contains a single priority — Environment and Natural Resources — but its scope is vast. This is the pillar that defines Oman’s relationship with its hydrocarbon legacy, its climate commitments, and the natural assets — frankincense forests, turtle beaches, mountain ecosystems, coral reefs — that give Oman its character and much of its tourism potential.
Oman’s Environmental Context
Oman faces acute environmental challenges that Vision 2040 must address:
Water scarcity: Oman is among the most water-scarce countries in the world. Per capita renewable freshwater availability is critically low. Agriculture accounts for the majority of water consumption. Climate change is intensifying drought patterns.
Cyclone vulnerability: Tropical cyclones (Gonu 2007, Phet 2010, Shaheen 2021) have caused significant damage. The Arabian Sea is warming, potentially increasing cyclone frequency and intensity.
Heat stress: Summer temperatures in interior Oman regularly exceed 45°C. Climate change projections suggest temperatures will rise further, with severe implications for outdoor workers and agricultural productivity.
Biodiversity: Oman hosts unique ecosystems — the Dhofar monsoon forest (the only such ecosystem in the Arabian Peninsula), turtle nesting beaches at Ras Al Jinz, Arabian leopard habitat in Jebel Samhan, and extensive coral reefs.
Carbon Neutrality 2050
In 2021, Oman announced a commitment to achieve net-zero carbon emissions by 2050 — one of the first Gulf states to make a concrete net-zero commitment. The Oman Net Zero Centre was established to coordinate this transition.
The target requires a fundamental transformation of Oman’s energy system, which currently depends on natural gas for electricity generation and oil for export revenues.
Pathway:
- 60% renewable energy in electricity generation by 2030
- Green hydrogen export industry development
- Energy efficiency improvements across industry
- Carbon capture for residual emissions from oil and gas operations
Renewable Energy: Behind Target
Progress on renewable energy has been slower than planned. Installed capacity of approximately 1.2 GW in 2024 compares unfavourably with the 2030 target of 6.5 GW — requiring roughly 5x acceleration in the remaining five years.
The Manah 1 and 2 solar power plants represent meaningful progress, but the scale of additional investment required is substantial. IPP (Independent Power Producer) structures, like those used in UAE and Saudi Arabia, are being deployed to attract private capital.
Green Hydrogen: The Big Bet
Oman’s most ambitious environmental-economic initiative is its green hydrogen programme. With vast solar and wind resources, coastal access for export, and proximity to Asian markets (Japan, South Korea, India, Europe), Oman has legitimate competitive advantages in green hydrogen production.
The investment pipeline exceeds $30 billion:
- ACME Group (India): Targeting 2.5 million tonnes per annum of green ammonia at Duqm SEZ
- Hyport Duqm (OQ + ENGIE): Joint venture targeting export-scale green ammonia
- Multiple additional projects in various stages of development
Two new green hydrogen agreements were signed in 2024/2025. The government targets production of 1 million tonnes annually by 2030.
Assessment: Green hydrogen is a credible opportunity, but the economics remain challenging — green hydrogen is currently more expensive than fossil-fuel alternatives, and the global market is nascent. Oman is positioning early, which is the right strategy, but delivery timelines and commercial viability remain uncertain.
Environmental Performance Index: A Concern
The Environmental Performance Index (EPI) shows Oman at approximately 42.5 in 2022 — significantly below the 2040 target of 74.69 (top 20 countries). This gap reflects challenges in air quality, ecosystem services, and resource management that require sustained policy attention alongside the renewable energy transition.