From fossil fuels to green horizons: SOCAR’s energy transition pathway

By Akbar Novruz

The State Oil Company of Azerbaijan (SOCAR) is spearheading its energy transition strategy through proactive discussions with Yokogawa Europe B.V. SOCAR President Rovshan Najaf and Yokogawa Europe B.V. President Seita Hagihara have actively pursued opportunities for deeper cooperation in decarbonization and sustainable energy. Azerbaijan is dedicated to aligning its energy policies with global climate goals and using technological innovation to reduce environmental impact significantly.

SOCAR’s new initiative: Road to Energy Transition

A key focus of the meeting was the digitization of oil and gas production and processing operations. Digital technologies can enhance operational efficiency, minimize waste, and reduce carbon footprints—critical steps for SOCAR as it navigates the complex process of transitioning to cleaner energy. Both companies expressed a shared vision for integrating advanced solutions like automation, real-time monitoring, and sustainability-driven innovations. This aligns with SOCAR's broader ambitions to adopt environmentally responsible practices while maintaining energy security and economic growth. The meeting also reflected SOCAR’s evolving business strategy, emphasizing carbon reduction in line with international decarbonization targets. As COP29 draws near, Azerbaijan’s strategic energy pivot is a timely move that showcases the nation’s alignment with global efforts toward mitigating climate change. SOCAR is well-positioned to play a leading role in shaping regional and international energy markets, especially as countries focus on renewable energy cooperation and innovation at upcoming climate summits.

Energy Outlook: Embracing the solar energy for reduced emissions

The discussions come amid reports from the consulting firm Det Norske Veritas (DNV), which predict a peak in global CO2 emissions from the energy sector in 2024, followed by a decline. According to DNV's energy outlook report for 2024, rapid advancements in solar energy are key to this trend. The global market saw a surge of 400 GW in new solar capacity last year, resulting in falling prices for solar panels and batteries, making solar power more competitive than fossil fuels in many regions. With the potential for 24-hour solar energy supply through improved battery storage, thermal power plants reliant on coal and oil are expected to decline. Gas-powered plants—considered a cleaner but transitional energy source—will likely play an increasing role in the near term. This trend aligns with the energy strategies of major global players, with BP projecting peak energy-related CO2 emissions around 2030 and Shell estimating similar peaks within the next decade.

Particularly, SOCAR’s initiative can reflect the growing importance of energy transition efforts not just in Azerbaijan but across the Caspian region. The push for greener energy aligns with Azerbaijan’s broader goals, including its vision for developing a "green corridor" across the Caspian Sea with Kazakhstan and Uzbekistan, supported by the Asian Development Bank (ADB). This initiative, along with SOCAR's collaboration with Yokogawa, emphasizes Azerbaijan’s readiness to contribute to global energy sustainability while retaining its strategic importance in the energy supply chain.

As SOCAR is actively integrating digital solutions and aggressively pursuing decarbonization to align with sustainable energy practices, the energy sector rapidly evolving. As COP29 approaches, SOCAR's forward-looking initiatives are unequivocally positioning Azerbaijan at the forefront of regional energy transition efforts. Through strategic partnerships with international corporations like Yokogawa and an unwavering commitment to innovative solutions, SOCAR is decisively paving the way for a greener future while solidifying its position as a key energy player.