A Cluster-Based Strategy for Industrial Decarbonization in the GCC 
This initiative examines the central role of industrial clusters in shaping the GCC’s decarbonization pathway, recognizing them as both the largest source of industrial energy demand and CO₂ emissions and the most powerful leverage point for structural transition. Across the GCC, industrial activity accounts for roughly 39% of total energy consumption and 38% of CO₂ emissions, concentrated in more than 70 industrial clusters spanning cement, steel, chemicals, refineries, aluminum, fertilizers, and petrochemicals. 

The analysis demonstrates that without targeted intervention, industrial energy demand is projected to nearly double by 2050, reaching approximately 8.6 EJ, with industrial CO₂ emissions potentially rising by 64%. This trajectory poses significant economic, fiscal, and competitiveness risks for producer economies facing long-term global fossil fuel demand erosion. 

Using a techno-economic, scenario-based framework, the study evaluates two transition pathways—Orderly Transition and Accelerated Transition—across more than 136 industrial facilities, 30+ products, and 52 industrial processes. The findings show that industrial clusters can become anchors of decarbonization if supported by coordinated deployment of process electrification, low-carbon hydrogen, CCUS, and energy-efficiency measures, rather than isolated project-by-project interventions. 

Hydrogen emerges as a critical industrial feedstock and energy carrier, with demand potentially reaching 20–25 Mt by 2050, particularly in high-temperature and hard-to-abate sectors. However, hydrogen competitiveness depends heavily on cluster-based demand aggregation, shared infrastructure, and proximity to renewable energy and CO₂ transport and storage networks. Similarly, CCUS is identified as indispensable for addressing industrial process emissions—especially in cement and chemicals—where abatement options remain limited. 

Crucially, the initiative reframes industrial decarbonization not as a climate-only agenda, but as a strategic economic transition tool. Well-designed cluster strategies can enhance industrial resilience, energy security, cost optimization, and long-term competitiveness, while mitigating exposure to declining fossil fuel markets. The report underscores that policy coordination, infrastructure planning, and investment sequencing—rather than technology availability—will determine the pace and success of industrial decarbonization in the GCC. 

Overall, the study concludes that industrial clusters are the backbone of the GCC’s net-zero ambition. A cluster-centric approach enables scale, reduces transition costs, unlocks hydrogen and CCUS viability, and transforms decarbonization from a risk into a strategic industrial renewal opportunity for producer economies.