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Akbar Novruz

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Once synonymous with Azerbaijan's oil and gas wealth, the State Oil Company of Azerbaijan (SOCAR) is now making waves on the global stage as it embarks on a transformative journey into the green energy sector. With an ambitious strategy unveiled at COP29, SOCAR aims to position itself not merely as an energy company but as a pioneering leader in the global transition to sustainability.

From fossil fuels to renewable ambitions

For decades, SOCAR symbolized the backbone of Azerbaijan’s hydrocarbon-driven economy. Now, its transition to renewable energy signals a seismic shift. The establishment of SOCAR Green LLC in late 2023 was a definitive first step. Designed to spearhead the company’s low-carbon initiatives, SOCAR Green embodies the broader vision of reshaping SOCAR's legacy into one defined by renewable energy, decarbonization, and innovative solutions like green hydrogen and carbon capture.

This transformation is not a superficial rebranding; it’s a calculated, multifaceted strategy. SOCAR Green's partnerships with global giants such as Siemens Energy, Masdar, and ACWA Power underscore a commitment to international collaboration. These alliances pave the way for projects like Azerbaijan’s first offshore wind farms in the Caspian Sea and rooftop solar power plants in Fuzuli and Jabrayil.

Transformational Roadmap

SOCAR’s roadmap involves bold investments across the value chain:

• Renewable Energy Mega-Projects: From the 240 MW Shafag solar power plant to ambitious offshore wind power projects totalling 3.5 GW, SOCAR’s portfolio is expanding rapidly.
• Green Financing: SOCAR’s plans to issue green bonds in the local financial market and adopt Environmental, Social, and Governance (ESG) standards reflect a serious commitment to financing its green agenda.
• Global Reach: SOCAR has expanded beyond Azerbaijan, implementing renewable energy projects in Türkiye, Georgia, Romania, and Switzerland, where it is experimenting with hydrogen technology.

Bold steps, tangible results

During COP29, SOCAR Vice President Afgan Isayev provided an intriguing glimpse into the company’s evolving priorities. From ending associated gas flaring by 2026 at the Baku Oil Refinery to advancing geothermal energy solutions with Baker Hughes, SOCAR is diversifying its portfolio while addressing global environmental concerns.

President Rovshan Najaf echoed this sentiment, emphasizing SOCAR's pledge to achieve net zero emissions by 2050. “We remain committed with the support of our partners, shareholders, and stakeholders,” he said. Najaf also underlined the importance of innovation, stating, “We believe in science and innovation not only within SOCAR but also through our partnerships.”

Challenges ahead

SOCAR's shift from hydrocarbons to renewables is not without challenges. Transitioning into an international green energy company requires overcoming technological, financial, and operational hurdles. Some skeptics might argue that the costs of decarbonization are prohibitive. However, SOCAR’s leadership insists that innovation and shared knowledge within the industry will enable success.

Moreover, the geopolitical importance of SOCAR’s renewable energy projects cannot be overlooked. As Azerbaijan seeks to bolster its energy security and establish itself as a key player in global energy markets, SOCAR’s transition aligns perfectly with these national goals.

Why this matters?

SOCAR's journey is a microcosm of the broader energy transition—a balancing act between legacy energy systems and future-oriented green solutions. It’s not just about reducing emissions; it’s about redefining what it means to be an energy company in a world increasingly driven by sustainability. SOCAR is decisively advancing its commitment to sustainability and emissions reduction through the implementation of the LDAR (Leak Detection and Repair) project at Oil Rocks. This initiative leverages a carbon credit mechanism to effectively identify and eliminate leaks, significantly reducing harmful emissions. The comprehensive approach includes meticulous leak detection, precise volume measurement, the elimination of leak sources, and certification of reduced emission volumes. Utilizing cutting-edge measuring equipment like infrared cameras, we have identified 171 leak sources in the project area. With the backing of an international validation company specializing in this field, we are actively repairing these leak sources. The emissions reductions achieved through this project will be certified and sold in the European market

By leading the charge in renewable energy innovation and decarbonization, SOCAR could become a model for others in the region and beyond. Whether it’s through harnessing Azerbaijan’s abundant solar and wind resources or forging strategic alliances with global energy leaders, SOCAR is charting a bold new course—one that may redefine the energy landscape in the years to come.

Is SOCAR’s transformation the harbinger of a new era for energy companies? The answer, it seems, will shape not only Azerbaijan’s future but also global energy trends.