As energy resilience becomes increasingly critical, new research from multinational law firm Pinsent Masons shows carbon capture and storage (CCS) remains the dominant focus of low‑carbon investment across the Middle East, while diversification into complementary technologies gains momentum. 

The study found 87 per cent of venture capital investors and technology developers active in the Middle East invested in a CCS project somewhere in the world over the past year, with 80 per cent planning to do so again in the year ahead.

While the findings mirror strong global momentum behind CCS, they also reveal a market beginning to broaden portfolios to support long‑term system resilience. 

The research forms part of Inside the Energy Transition, a global study drawing on insights from nearly 1,000 VC investors and low‑carbon technology developers worldwide, examining sentiment, priorities and perceived risks shaping the energy transition over the next 12 months. 

Alongside CCS dominance, the data suggests that meaningful diversification across Middle Eastern low-carbon markets is already underway and tracking ahead of global engagement. 

E‑fuels (27 per cent), advanced nuclear fission (40 per cent) and geothermal (18 per cent) all featured prominently in respondents’ current portfolios, well ahead of the global bases of 18 per cent, 31 per cent and 6 per cent respectively.

Looking ahead, tidal and ocean power set for a major uptick in interest, rising from negligible current activity to 26 per cent planning investment in the next 12 months.  

Commenting on the findings, Gurmeet Kaur, energy partner, said: “Across the UAE, Saudi Arabia and Qatar we have seen regulatory activity that is directly encouraging investor confidence in low-carbon projects. With a number of national carbon‑capture strategies now formalised, such as the Kingdom of Saudi Arabia’s Jubail CCUS Hub, it is clear that CCS remains a key technology for the region, but the pipeline of hydrogen, e‑fuels and next‑generation nuclear projects signals a market rapidly diversifying and maturing.”

He added: “Our data shows that the region is ahead of the curve in terms of investors and developers already engaging with geothermal and e-fuel projects compared to the global respondent base. The region’s pace, supported by rapid regulatory evolution, positions the Middle East as one of the key low‑carbon markets globally. As recognition of the importance of energy resilience in the region, we can expect these diversified portfolios to increasingly become the norm for investors and developers alike.” 

In terms of investment flows, 14 per cent of global respondents said they planned to expand either investment or development activity in the UAE, followed by11 per cent citing Saudi Arabia and 10 per cent reporting Qatar, reflecting a number of measures introduced in the last twelve years to boost activity support net-zero trajectories across the region.  

In the UAE, the launch of the updated National Energy Strategy and COP28‑aligned targets has increased visibility for CCS, hydrogen and synthetic fuels, while new federal frameworks around green finance have encouraged uptake of tools such as reduced tax rates, preferential interest rates and capital cost rebates, used by 46 per cent, 42 per cent and 44 per cent of respondents in the Middle East respectively. 

Twelve percent of global respondents reported using incentives in Saudia Arabia or the UAE.  

Overall, global respondents showed exceptionally high confidence in the region’s policy environment, with 80 per cent agreeing that Middle East offers a supportive regulatory landscape for low‑carbon investment. 

In the Middle East, appetite for carbon‑credit‑aligned technologies remains exceptionally high, with 96 per cent of investors and 95 per cent of developers saying they prioritise or actively build eligibility into their technologies.

This comes despite concerns about regulatory divergence (64 per cent), complex verification processes (71 per cent), and the difficulty of keeping pace with fast‑moving carbon‑credit regulation (70 per cent). 

Middle East respondents also demonstrated strong engagement in energy optimisation technologies which have proven critical for grid stability as renewable penetration grows. The most favoured technologies include: grid optimisation (57 per cent), long‑duration and short‑duration energy storage (both 55 per cent) and demand optimisation (53 per cent).  -OGN/TradeArabia News Service