Saudi Arabia

Saudi Arabia's green economy framework unfolds under the Saudi Green Initiative (SGI), which is directly tied to Vision 2030. This serves as the country's national green economy plan. The SGI is an up-to-date instrument representing with targets for 2030 on emissions reduction, large-scale tree planting and renewables. It is supported by massive state investment, with plans to spend over $187 billion on its initiatives. The government has issued supporting frameworks such as a Green Financing Framework (2024) that align investments with green/low-carbon projects. The 2060 net-zero target is high-level and non-binding or accompanied by a detailed emissions reduction pathway. The strategy relies on the controversial Circular Carbon Economy approach and Carbon Capture and Storage. Saudi Arabia’s Nationally Determined Contribution (NDC) is viewed as "Critically insufficient" by external analysts, and the target lacks a baseline projection. While Vision 2030 drives economic diversification, it lacks a credible plan to effectively diversify the economy away from fossil fuels.

Saudi Arabia's Vision 2030 aims to integrate gender inclusion and sustainability into its corporate framework. For gender representation, the Capital Market Authority's (CMA) Corporate Governance Regulations mandate that boards of listed companies must consider diversity when nominating members, and the current code requires a public company to have at least one female board member. However, there is no mandatory gender quota for boards. Regarding ESG and SDGs, the efforts are strategic but rely on voluntary reporting frameworks and market incentives. The Saudi Exchange has issued ESG Disclosure Guidelines, and the CMA has approved new non-binding guidelines for sustainable debt instruments. The 2025 Labor Law amendments have enhanced worker rights but they do not introduce mandatory employee representation on boards.

The main national tool is the Public Consultation Platform (Istitlaa), managed by the National Competitiveness Center, which enables citizens, companies, and institutions to comment on draft laws, regulations, and policies before adoption. Complementary initiatives such as the Digital Government Authority’s General Consultation Service and the national e-Participation Portal extend similar functions. Some major draft texts, such as the new Personal Data Protection Law (2025) and the draft Arbitration Law (2025) have been subject to public input. Public feedback channels primarily target the private sector and legal professionals. Consultations remain narrow in scope and discretionary, generally limited to secondary regulations rather than public policies. There is no legal requirement mandating that all ministries conduct public consultations or publish responses to received input, and there is no systematic social or gender impact assessments. Saudi Arabia also lacks a framework ensuring the participation of marginalized groups such as women. Political centralization and restrictions on civil society continue to constrain meaningful civic participation and public accountability.

The Quality of Life Program under Vision 2030 integrates well-being metrics (such as life expectancy, social capital, physical activity) and targets that look beyond financial GDP. The General Authority for Statistics (GASTAT) publishes regular data on health, education, employment, social participation, and digital access. The government, with support from the World Bank’s WAVES initiative, has continued technical work on Natural Capital Accounting.

The Ministry of Finance’s Green Financing Framework, the Public Investment Fund’s Green Finance Framework and the Saudi Central Bank’s Sustainable Finance Framework guide green lending, investment, and disclosure. Stress testing of banks is mandatory under the Saudi Central Bank’s rules. However, climate and environmental risks are not yet systematically integrated into these stress tests, and there are no binding requirements to penalize financing of high-polluting sectors. Current initiatives remain enabling and voluntary, focusing on aligning investment flows with ESG principles.

The Capital Market Authority (CMA), in collaboration with the Saudi Central Bank (SAMA), has approved Guidelines for Issuing Green, Social, Sustainable, and Sustainability-Linked Debt Instruments as of 2025. These guidelines are currently advisory. The kingdom issued its landmark €1.5 billion euro-denominated sovereign green bond, attracting investor demand exceeding €7 billion, a clear signal of its emerging role in sustainable sovereign financing.

The new Green Financing Framework (2024), developed by the National Debt Management Center (NDMC), now lays the foundation for allocating government bond proceeds to climate-aligned projects in energy efficiency, urban transport, and afforestation

On the fiscal side, the government has continued to reform its highly distortionary fossil fuel subsidies. According to the IMF, ongoing energy price adjustments have reduced fuel subsidies to 3.5% of GDP in 2024, down from 5.5% in 2022. However, the country's overall fiscal policy is not yet consistently guided by sustainability criteria. The 2025 budget, while emphasizing diversification, has a large deficit and continues to direct substantial spending toward large-scale infrastructure projects and a growing military and social development budget, without a clear, public, and comprehensive review of its environmental impact.

There's limited evidence of sustainable development priorities being standard in Saudi Arabia's trade and investment partnerships. Saudi Arabia's Public Investment Fund (PIF) and the Saudi Stock Exchange have announced a voluntary carbon trading platform for the Middle East and North Africa region, but it works more like a voluntary market for carbon offsets, which lacks the enforcement mechanisms of a true carbon pricing regime. The country has no national carbon tax or cap-and-trade system, nor it has established a comprehensive policy for liberalizing tariffs on environmental goods and services. Instead, its import tariff structure is primarily based on protecting domestic industries.

Saudi Arabia does not have a carbon tax or emissions trading regime. However, it does have a Voluntary Carbon Market Company established by the Public Investment Fund. This platform facilitates auctions of high-integrity carbon credits, largely sourced from global projects, allowing domestic companies like to offset their emissions. So the trading scheme is voluntary, crediting-based. There is no legally binding carbon budget. While its NDC provides a target, it is considered "Critically Insufficient", reflecting minimal to no action aligned with the Paris Agreement goal.

Recent strategic advances include the Saudi Green Initiative (SGI), launched in 2021, a long-term plan with over 85 initiatives and more than SAR 705 billion in investments, provides an overarching structure for environmental protection, energy transition, and sustainability across various sectors.

Renewable energy sector integration has gained traction through megaprojects: the Sudair Solar PV Project (1.5 GW capacity completed in 2023) is among the largest globally, and a $8.3 billion investment by ACWA Power and Aramco announced in 2025 encompasses the development of five solar and two wind projects totaling 15 GW, advancing the path to 50% renewables by 2030. Private corporations are increasingly integrating green practices driven by subsidy removals and cost incentives.

The NREP is the central coordinating initiative for renewable energy under Vision 2030—setting a clear target of 50% renewable electricity by 2030, defining key implementation mechanisms, and mobilizing private-sector investment

Saudi Arabia champions the Circular Carbon Economy (CCE) framework, which serves as a cross-sectoral guide to manage emissions through the "reduce, reuse, recycle, and remove" principles. This has led to progress in waste management and carbon capture, with projects like a major Carbon Capture and Storage (CCS) hub planned for operation in 2027.

Saudi Arabia embeds circular economy principles in its national strategy Vision 2030, especially around waste management, industrial waste and recycling. The overarching goal of Vision 2030 is to diversify the economy away from hydrocarbons and embed sustainability, and the circular economy serves as a key pathway to achieve this by optimizing resource use and economic diversification. Long-term targets are related to waste management and extend to 2035 and 2040, for example targets of 85% of hazardous industrial waste to be recycled or treated by 2035, and 81% recycling and treatment rate for municipal solid waste by 2035. While there isn't a single policy on circular public procurement, there have been significant investments in some new cities, and major projects like the Red Sea Project and Amaala are designed with circularity at their core. The National Center for Waste Management and the Saudi Investment Recycling Company are leading implementation of circular initiatives.

Saudi Arabia has committed to a target of 30% EV adoption by 2030 and is moving forward with infrastructure build-out. Public vehicle electrification is underway with electric buses entering service in major cities. However, these initiatives don't amount to a fully integrated national plan mandating electrification of public, private, and freight transport; and many of the standards or incentives are non-binding or are pilots.

The country's targets are now being backed by substantial financial commitments and concrete project announcements.Recent reports on installed capacity indicate a massive increase, with capacity expected to reach over 12 GW by the end of 2025. This is driven by several large-scale solar and wind projects. The National Renewable Energy Program (NREP), which is a core component of the Saudi Green Initiative, is now actively awarding and developing projects at an unprecedented pace. For example, the government has signed agreements for seven new projects, a total investment of $8.3 billion, to deliver a combined capacity of 15 GW of solar and wind energy by 2028. Furthermore, the Public Investment Fund (PIF) has been mandated to develop 70% of the country's renewable energy capacity by 2030, a clear signal of institutional commitment.

Saudi Arabia's main renewable energy target is to achieve 50% of its electricity generation from renewable sources by 2030. This goal is a key pillar of the country's Vision 2030 plan, which aims to diversify the economy away from a reliance on oil. The remaining 50% of its electricity generation will come from natural gas.

While the country's policy still includes significant investment in natural gas, the scale and speed of its renewable energy deployment is undeniable.

Saudi Arabia's approach to green jobs has gone from an indirect outcome of certain projects to a more intentional focus on employment creation within its major green initiatives.

The Saudi Green Initiative (SGI) now serves as a de facto national framework for green job creation, with numerous projects explicitly targeting employment. For example, the Green Riyadh project, a major afforestation effort, is projected to create up to 350,000 jobs. Similarly, a new initiative to plant 45 million agricultural trees in mountain terraces is expected to generate 5,000 job opportunities.

While a single, nationwide Green Jobs Strategy doesn't exist, the multitude of initiatives under the SGI, with their specific job creation targets, represents a significant step.

The Saudi Green Initiative / Circular Carbon Economy frameworks claim inclusivity and job creation as co-benefits of environmental transitions, but they do not appear to include dedicated instruments or mechanisms to ensure that communities affected by structural shifts. There is no clear policy or mechanism, beyond the existing Citizens Account Programme (a general social safety net), that constitutes an integrated framework for re-skilling workers displaced by the energy transition or guaranteeing benefit-sharing for disadvantaged communities impacted by large-scale green projects. Saudi Arabia has embarked on energy subsidy reforms, and analysts note that compensatory social support mechanisms are often needed.

The country has launched the Saudi Green Initiative (SGI) and created the SR1 Billion ($266.6 million) Environmental Fund in 2025, providing grants and financing to entities including SMEs. The SME General Authority (Monsha'at) now explicitly includes sustainability in its reports and plans the introduction of sustainable financing framework guidelines and Sustainability Champions programmes to accelerate adoption of green technologies and circular economy principles by MSMEs. Sustainability training and support schemes are in place or in development. While Saudi Arabia lacks a separate legal recognition of social enterprises, the Monsha'at offers a Social Enterprise Accreditation Certification Service, indicating that the legal form for social enterprise is under development and discussion.

Saudi Arabia's social protection system is in a state of significant reform, driven by the Vision 2030. The Citizen's Account program, for instance, is a key fiscal innovation that aims to protect Saudi families from the effects of economic reforms by providing direct cash transfers, a more targeted approach than broad-based subsidies. The new Social Security Law, which came into effect on July 2025, represents a major legislative reform to the social security retirement system. The Ministry of Human Resources and Social Development has launched programs like Qurrah for childcare services and Wusool for transportation to support working women. While these reforms are innovative in a Saudi context, they primarily focus on economic and labor market goals. There is no evidence of specific, large-scale pilots or schemes that explicitly link social protection to the country's green transition.

An updated National Biodiversity Strategy and Action Plan (NBSAP) is not published, but the SGI and its associated National Greening Program and Marine and Coastal Protection Programs function as a implementation strategy with interim targets. Under the Saudi Green Initiative, the Kingdom has committed to protecting 30% of its terrestrial and marine areas by 2030, a target aligned with the Global Biodiversity FrameworkThe country also maintains a National Protected Area System Plan (as required under the Convention on Biological Diversity) which identifies gaps in the protected area network and sets a vision for expansion and management of protected areas. In 2025, Saudi Arabia launched a Protected Areas System Plan (under the National Center for Wildlife) as part of the IUCN regional conservation forum, designed to align with Vision 2030, the Saudi Green Initiative, and international standards. The National Center for Wildlife has signed in 2025 a Memorandum of Understanding with the UK’s National Oceanography Centre to enhance marine biodiversity monitoring, MPA design, and scientific cooperation.

Saudi Arabia has launched its Vision 2030 strategic roadmap and the Saudi Green Initiative (SGI). The establishment of the SGI is considered to be the initial steps towards developing natural capital accounts, since it's tracking progress on quantifiable targets for afforestation, land restoration and protected areas. These programems generate data useful to develop natural accounts. The Kingdom has also established high-level strategic committees and bodies to drive the SGI and the sustainability agenda, but still without any mandate on natural accounts. The government, with support from the World Bank’s WAVES initiative, has continued technical work on Natural Capital Accounting (NCA) for land and water assets under the Ministry of Environment, Water and Agriculture and GAMEP.

Saudi Arabia has introduced regulatory measures and frameworks related to healthier diets and food system sustainability. However, there is not yet a comprehensive national food systems strategy with cross-sectoral targets for ecological footprint, subsidies, waste, public procurement, etc.

The Green Financing Framework (2024) allows the issuance of green bonds/sukuk and explicitly permits use of proceeds to include tax expenditures and subsidies that support climate and environmental objectives. In 2025, Saudi launched a SR 1 billion green financing initiative aimed at incentivizing sustainable private sector projects, through the Environmental Fund in partnership with the banking sector. There is limited evidence so far of environment-specific tax reforms. Importantly, there is no evidence of fiscal reform to eliminate fossil fuel subsidies.

Saudi Arabia's economic stabilization and transition strategy, primarily driven by Vision 2030 and the Saudi Green Initiative (SGI), demonstrates a shift compared to the initial COVID-19 stimulus packages, which lacked green measures. The subsequent, large-scale national programs have integrated green investments into the Kingdom's economic future, but there is no green conditionality attached to general economic support packages, and limited outreach to just transition or vulnerable communities.