Euro Mechanical CEO Jon Rawding on UAE’s Pragmatic Transition to Renewables

Jon Rawding

The United Arab Emirates is set to host the United Nationsupcoming COP28 Climate Change Conference, where the UAE is determined to make a name for themselves in the alternative energy marketplace and evolve beyond their global reputation as being all-in” on oil and gasoline. VerdeXchange News recently interviewed Jon Rawding, the CEO of Euro Mechanical - an Emirati company that for more than four decades has supported the growth of Abu Dhabis energy sector - to better understand the continuing evolution of UAEs energy goals and investments. Rawding confirms not only continued investment by UAE in oil and gas growth, but also their conscious evolution to investment in renewables: from oil and gas, to LNG (liquefied natural gas), to renewables, nuclear and, now, to green hydrogen. Rawding explains the aforementioned is all taking place in the UAE through ADNOC, the Abu Dhabi National Oil Company, as the result of the sovereigns leadership commitment to generational pragmatism in a time of worldwide climate existentialism.

VerdeXchange News: Let’s begin with your leadership role at Euro Mechanical and approach to branding the companys market operations in the United Arab Emirates.

Jon Rawding: I'm the CEO of Euro Mechanical and have been since 2018. When I joined, the previous general manager had been here for 33 years, the previous financial controller had been here 42 years and the previous COO for about 28 years, when he retired in 2022. So, it was on a trajectory, maybe not the right trajectory, but it was on a trajectory, and it had a different leadership style.

The current board that we have, consisting of members of the family that also own the company, re-engaged in 2016 and decided that a change needed to take place. After they engaged with one of the leading executive search agencies, I was introduced to Euro Mechanical, and it's been an incredible journey since then. 

When I first got here, I said, why do we exist? Nobody could answer me other than, Well, we're here to make money.” I brought everybody together for the first meeting, which started with, Oh, we've never had a meeting before. Who are you?” Theyd never met each other. Even some of the business unit leaders had never met each other. There was no business plan, there was no brand, and the website was falling apart. I realized, a little bit of work needs to be done here.

We engaged a leading branding agency from Dubai and started the rebranding journey. We asked why we exist and went on a whole journey involving the board, the employees and our clients. What we discovered was that we had a very strong brand in the market here. Whatever they'd been doing, they'd been doing it right. The problem was theyd not been telling anybody about it.

The company has existed since 1976 and has been wholly owned by an Abu Dhabi family since 1983. When the current board returned from their individual journeys in 2016, they wanted to continue to contribute to Abu Dhabi and the UAE. So, the purpose of Euro Mechanical, why we exist, is to give back and support the growth of Abu Dhabi and beyond. This is why the journey we're on is so incredible because we contribute more and more through what we do each day. We're very focused on the energy sector, today, predominantly with ADNOC, which is the Abu Dhabi National Oil Company.

Expand on Euro Mechanical’s valued expertise and specialty services to UAE’s energy operations in Abu Dhabi, as well as Euro Mechanical’s role in advising on UAE’s transition to alternatives – including investing in new energy efficiency, green hydrogen, and storage opportunities globally.

What we do now has two parts to it. 

First, we engage with international companies to bring the latest technology into the UAE, with us acting as the conduit to the UAE. Part of that is surface equipment, downhole equipment, monitoring fiber optics, subsurface equipment; anything regarding the energy sector. We actually represent AI companies, as well. Anything that isn't available here in the UAE and will bring value to the UAE, we look to be the conduit because the UAE can appear quite daunting from the outside. It's not really connected to the VerdeXchange crowd”. 

The other part of the business is what we do in the UAE ourselves. We supply manpower to locations, we do energy field construction work, and we've got various specialty services that we provide. We also have a 23,000 square-mile manufacturing facility here in Abu Dhabi.

When we're talking about the next phase of our evolution, this is where we're looking at alternative energy. We're in an energy transition, what they refer to as the fifth wave, if you listen to the latest talk in the UAE. The first wave was oil and gas, the second wave LNG (liquefied natural gas), the third wave renewables, the fourth wave nuclear and, now, the fifth wave is green hydrogen. 

It's not just at home. The UAE is also investing in other parts of the world to support that growth. In fact, in the paper today, I see a 4.5 billion dollar investment in Africa, supporting the development of alternative energy in these countries. It's an amazing journey, really, when you think about the landscape 50 years ago.

Recent reporting out of the Gulf finds that the UAE recorded the largest increase in renewable energy capacity worldwide for the last decade. Put in perspective for our readers the UAE governments net zero ambitions .

What I feel is happening is that there are very few obstacles in the way of progress in the UAE. If the leaders decide that they're going to set targets, they'll do everything in their capacity to get where they're going, with the support of the nation. This is where the UAE has got the differentiator, because they sometimes understand we need to let go of the past to create a new future. When they want to expand into building one of the biggest solar farms in the world, they execute on the commitment.

Abu Dhabi is one of the biggest sovereign wealth funds on the planet, at around $850 billion, and it is wisely invested for the next generations to come.

Give us your perspective, as a truly experienced oil and gas man, on this aforementioned energy transition to a “fifth wave.” And what, from the perspective of the UAE, are the present market incentives and disincentives to realizing the promise of the fifth wave?

The UAE traditionally has a more oil and gas perspective. ADNOC have to be very pragmatic. Its important to note that the UAE looks at the long term, 2050 and beyond. They're looking at how to create a long term sustainable economy and environment for the future generations.

The UAE continues to increase oil and gas production, there's no secret about that. They understand that the world is going to need energy. There is estimated to be, by 2050, about 9.8 billion people on the planet. It's simple, we havent got enough energy. At his opening address at ADIPEC 2022, Dr Sultan Al Jarb called for “Maximum Energy, Minimum Emissions,” saying:

“The world needs all the solutions it can get. It is not oil and gas, or solar, not wind or nuclear, or hydrogen. It is oil and gas and solar, and wind and nuclear, and hydrogen. It is all of the above, plus the clean energies yet to be discovered, commercialized and deployed.”

We're going to need oil. We're going to need gas. Even coal is still in the mix at the moment. Amazingly, China is making some of the biggest imports of coal today because the hydroelectric plants are not doing what they should be doing.

As I was saying, it's a pragmatic approach. They understand that they need to continue to fund what they have today, but also build for the future. The way I see it is there are opportunities on both sides; I see the opportunity to continue to support the oil and gas sector. But the energy companies can't afford to stand still in the UAE; they've got to adapt to survive. To quote Darwin, it’s not the strongest, most intelligent, that survive. It's those who adapt to change.

The reporting in the US is that companies like Shell and Exxon are now backing off of the promises they’ve previously made in regards to environmental and climate goals. What’s your take on that reporting? 

My take on that reporting is that the IOCs (International Oil Companies) have to operate differently to the NOCs (National Oil Companies). These international companies are funded by shareholders and they've got to react because they're playing in, arguably, a different space. NOCs, your ADNOC, your Saudi Aramco, are the assets of the nation. They belong to the nation. They have more autonomy in how they deal with that. They don't have outside legislators telling them what to do. They don't have government taxes or windfall taxes. They don't have people protesting. They are part of the country’s eco-system and work together with the other entities for one shared vision.

In Abu Dhabi they understand that oil and gas is the countrys powerhouse. If you ever hear people in the UAE talk, they trust what the leaders are doing. They believe they have the intention to do the right thing.

Is the pace of adapting to change that National Oil Companies presently have more or less rapid than the International Oil Companies?

It's more rapid, I would say, because they never slowed down on producing oil and gas. They appreciated that it needed to continue to happen. They were not distracted by all the noise that was going on in the market. We know we need oil and gas. While all these IOCs are backing off, NOC’s are ramping up, as they understand the planet’s energy requirements.

They appreciate that there is an adaptation that needs to take place and when theyre trying to do new things, they just get on and do it. They align very quickly. Thats the difference between reading a newspaper in the UAE and reading a newspaper in England; it’s a more balanced view including inspirational stories of progress.

On the subject of adaptation,” elaborate on UAE’s Clean Energy showcase, Masdar.

There's a company called Masdar in the UAE that was created to lead the transition, funded by Mubadala Investment Company, which is a private investment firm. ADNOC has just joined with Mubadala and TAQA, an energy company here, to invest in Masdar. 

Masdar is, if you like, the vehicle that they are using to make these transitions. They built a smart city on the outskirts of Abu Dhabi. In fact, we're going to visit Masdar next week, to listen to their journey because, to be fair, Euro Mechanical is only starting our journey, but we are committed. 

We've talked about getting into alternative energy for so long, but there was a lot of stabilization to be done first. Nevertheless, last year, we put five pillars together: data integrity, project delivery, ESG (Environmental, Social, and Governance), alternative energy and beyond energy, as we move to continue growing our support for ADNOC, while contributing in more ways to Abu Dhabi and the UAE. When we think about commitment, Euro Mechanical thinks on the long term, as well. It's more about building out a sustainable and highly respected company than it is about the noise and the money. The company will be handed on to the next generation and then the generation after that; we are playing the infinite game.

What are the UAEs plans for hosting the United Nationsupcoming COP28?

Its being hosted in Dubai from November to December. Let's go back to the history of the UAE a bit because it gives you a bit of flavor with respect to how they're approaching COP28. To survive in the UAE in the past, everybody had to work together. You're living in the desert. If you've got water, you share it. The point being, you have to collaborate to exist. The planets got a problem, if we're going to be able to sort it out, we have to sort it out together.

This is the backbone of how the UAE has evolved. They're trying to get that cross-nation collaboration. This is the approach that I see from my perspective of having lived in the UAE for so long now. You need to understand the whole mentality, that they're thinking long term, they're not thinking short term. From my perspective that is what I see.

Working professionally today in the United States, one certainly would be bombarded with climate event reporting by the media- floods, hurricanes, water shortages, etc. The central message of this climate reporting is that were all at the end-of-the-line in terms of what we can be done to save our planet. Globally, we have an existential crisis. Your above responses do not evidence an existential concern. Correct? 

There's no secret as to what drives the media. If there are a lot of car accidents reported every single day in the newspaper, its going to be in my mind every time I'm driving on the roads. It can be hard. Whatever you're bombarded by as a human, you absorb. You think the planet is going to fall apart because youre being told that every single day, every time you pick up your phone, every time you pick up a newspaper. 

There is a little bit more of a pragmatic approach here. They recognize there are challenges ahead, if you listen to the way that they're approaching COP28, but it's not constantly on you. Let's look at the science, all of the science, not a bit of the science. Yes, we recognize there is a problem and that things need to be changed, but running around, throwing our arms in the air and panicking isn't going to help anybody.  A long-term pragmatic approach as we adapt to the reality of the impact we are have on the planet, is different from short-term fixes.

Referencing again the United States, ESG reporting is most often linked to the impacts of such reporting on company market value - as a metric to measure the opportunities and risks of investors. Is ESG reporting viewed differently in the UAE?

ESG, in its original format, was highly driven by the markets. Let's not sell tobacco, for example, because that's a risk to the investor. The company's pumping out a lot of pollutants, that's a risk for the investors because it's going to destroy the reputation of the company. The investors are worried so they built metrics to protect their money. That's it. That's where ESG came from. The drive from this side is to be doing the right thing. Its about protecting the nation for future generations. It's a different mindset. 

It's not only driven by the financial marketplace. It's driven by the leaders wanting to do the right thing. It goes back to this long-term sustainable evolution of the country. 

You personally earned a diploma in ESG. Share how you apply that education to your Euro Mechanical governance and leadership responsibilities.

I previously worked for leading international companies; therefore, I was well versed in corporate governance and brought it with me to Euro Mechanical. So, the corporate governance side of ESG was always there. But, we were behind on the E” and the S” side of it. My opinion is that its not about the individual parts, but all of them together. As we lay out our ESG strategy, we look to balance the sum of the parts and do the right thing.

Before concluding, share your POV on Californias prioritization of green hydrogen. In your opinion, are California’s evolving energy policies misguided or smart? 

When I think of California, I think of creativity, but there is a balance between blue sky thinking, thinking we're not going to produce any oil ever again and we're going turn off the taps tomorrow, and realistic thinking, that we still need the energy. It's a great dream to end fossil fuel production today, until nobody can afford to heat their homes. When I think of California, I think that in many ways it can be an example of thought leadership, but also it potentially needs to balance that with a more pragmatic approach sometimes. The UAE leaders are visionary and thought leaders in their space, but also realize that it's a generational journey. In my view it is a more linear path and it is a privilege to be in a position to contribute to that journey in Abu Dhabi and the UAE.

“…Energy companies can’t afford to stand still in the UAE; they’ve got to adapt to survive. To quote Darwin, it’s not the strongest, most intelligent that survive. It’s those who adapt to change.” - Jon Rawding, CEO Euro Mechanical