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Environmental Industries Profile
[1]
- Saudi Arabia
July 2012
Produced by the Canadian Trade Commissioner Service
Sector overview
The environmental industry in Saudi Arabia is in its developing stages, but is expected to grow rapidly due to
strong political impetus. Political and economic stability during the next five years is likely to attract
considerable investments in infrastructure and other development projects, which, in turn, could generate
opportunities for the environmental industry. A liberal foreign investment policy will also strengthen the
environmental industry. Meanwhile, Saudi Arabias economy has weathered the economic downturn well, thanks
to its significant oil reserves. Budgetary allocations indicate a diversification into the non-oil sector, which is
likely to strengthen the demand for pollution abatement equipment in industries such as construction.
Simultaneously, initiatives such as technology parks and national science and technology policies will boost the
technology sector in Saudi Arabia. As the region is heavily dependent on desalination, the water segment of the
environmental industry is especially primed for growth. Conducive demographic factors such as an expanding
population base will also increase the demand for air pollution monitoring stations and services such as
recycling. Improvements in environment-friendly and treatment technologies will contribute to the development
of an advanced environmental industry.
The Presidency of Meteorology and Environment - the governmental environmental regulating agency - plans to
outsource most of its tasks to the private sector as a direct result of lacking qualified staff and technical
expertise on a large scale.
The Saudi Presidency of Meteorology & Environment (PME) now has a new environmental law, and the
Implementation Procedures of this law are endorsed by the Government. New environmental standards have
also been re-written, and the PME is now strictly ensuring implementation of the law and standards.
Environmental Inspectors have been recruited by the PME and a Green Police is about to be created. These new
legislation, standards and enforcement procedures have now become drivers for improved environmental
performance and business in the country. The Government has allocated CAD 300 million for environmental
protection and pollution control in the 2012 budget. In addition, an additional amount of the CAD 3 billion was
budgeted for the Ministry of Municipality & Housing has been set aside for the handling, processing, managing
and disposal of solid waste.
King Abdullah City for Atomic and Renewable Energy (KA-CARE) was established by a Royal Decree in 2010.
KA-CARE determines priorities and national policies in the field of atomic and renewable energy. It aims to build
a scientific technical base in the field of generating power and producing desalinated water and in the medical,
industrial, agricultural and mining fields. The head of KA-CARE holds a ministerial level position and reports
directly to the King. KA-KARE supervises and controls all works related to the use of atomic energy and the
resultant radioactive waste.
Market Opportunities and Sector Challenges (Strengths and
Weaknesses)
The following areas offer potential business opportunities in the sector:
Nuclear, Solar and Renewable
KA-CARE is planning to build 16 nuclear reactors for power generation purposes. Through KA-CARE, the
Kingdom plans to produce 41 GW of electricity by 2032 through solar energy. Deputy President of King Abdullah
City for Solar Energy (KACSE) Khalid Sulaiman said solar energy would provide more than 20 percent of the
Kingdom's power needs by 2032 whereas other alternative sources, such as wind and nuclear reactors, will
provide 60 percent of such needs.
Water and wastewater
It is predicted that Saudi Arabia will not be able to meet its water supply needs by 2025. Only 45 per cent of
the urban population has access to a sewerage system. The reuse of treated effluent only amounts to about 6%
of the amount of potable water supplied. In all it is estimated that the investment needed in sewerage systems
and wastewater treatment over the next 20 years will amount to over CAD 12 billion.
Saudi Arabias water sector is therefore undergoing reform. The Ministry of Water & Electricity is in the process
of privatising the provision of wastewater treatment services. With this in mind many local consultants and
contractors are seeking to work with international companies who can provide contractual, legal and other
services. Providers of technologies and products are also being sought for significant refurbishment and
extension projects as well as new projects that will be implemented.
There is severe lack of expertise in the field of wastewater treatment, which has led to a marked increase in
water pollution in the Kingdom. Wastewater collection and treatment systems exist in only 22 out of 106
Municipal areas, and some major towns and cities have no piped collection systems as yet. It is estimated that
of all the wastewater collected; only one third is to the tertiary standards required by regulation for reuse. Many
of the existing plants are obsolete and need rehabilitation. A major construction programme of wastewater
treatment plants is needed to increase capacity. A study by the Ministry of Water & Electricity estimates that
Saudi Arabia will need to invest about CAD 20 Billion for building new sewer networks and about US$17Billion
on new waste treatment plants over the next 20 years.
Environmental Impact Assessment (EIA)
All new major industrial projects in the Kingdom now require an Environmental Impact Assessment at the
planning and feasibility study stage, without which a license will not be issued.
Waste disposal
Studies show that the average weight of domestic/home solid waste per individual in Saudi Arabia is expected
to rise to more than 1.2Kg/day by 2013. There is a desperate need in the Kingdom for new technologies and
techniques for handling this waste. Little or no recycling currently takes place. There is also a major
requirement for latest incineration technologies. Domestic, industrial, chemical and hazardous waste is on the
increase in Saudi Arabia, thanks to the countrys industrialization and urban growth. Organic waste represents
the highest percentage of domestic municipal waste collected (40%), followed by paper and cartons (20%),
plastic (15%), metal (7%), glass (5%), clothes (4%), and other waste (9%). Saudi Arabia generates also about
25,000 tons of medical hazardous waste per year.
The Government approved the establishment of a joint stock company to treat hazardous waste in the country,
under the Ministry of Health. Destruction of toxic and isotropic waste produced by factories is problematic. The
Government is trying to tackle the negative impact of industrial waste, especially those containing lead and
radium. Random collection and burning of industrial waste is widespread and leads to emission of poisonous
gases and air pollutants. With over 1,200 factories in the country, and little environmental awareness, Saudi
Arabia offers enormous potential business to Canadian companies in this sector. A new Law announced in July
2005 makes it now mandatory for companies executing industrial and commercial projects to install surveillance
equipment to monitor pollution. The Law also envisages installing surveillance equipment in different parts of
the country to detect offenders.
Air Pollution
According to the Municipal and Rural Affairs Ministry, Saudi air pollution is on the increase. Saudi Aramco, the
Saudi oil giant, operates 10 Air Quality Monitoring and Meteorology Network (AMMNET) stations and 15
meteorology-only stations throughout the country. AMMNET stations ensure facilities meet national and
company air quality standards for limits of sulphur dioxide, inhalable particulates, ozone, nitrogen oxides,
carbon monoxide and hydrogen sulphide, among other pollutants. The PME also has a number of these stations
installed at the country's airports, the industrial cities of Jubail and Yanbu, and elsewhere. More will be installed
soon. Saudi annual imports of air pollution control and monitoring equipment at the moment stands at about
CAD 50 Million. Market experts expect an average annual growth of 7% in this sector brought about primarily
by new mega projects in the petrochemical field, oil and gas, power generation and water desalination
industries. Pollutants emitted by thermal power plants in Saudi Arabia cost the national economy about CAD 2
billion a year (according to a report by the UK Trade office).
Lack of Expert knowledge
Local companies lack the know-how in specialised areas of pollution control, such as:
Environmental monitoring
Environmental analytical services
Hazardous waste management
Site remediation and rehabilitation
Environmental engineering & consultancy
Marine Pollution
According to a recent independent study, the Arabian Gulf marine pollution constitutes about 30% of the
Worlds oil pollution. Oil tanker movement is the main cause.
Other opportunities
Opportunities also exist in ambient surveys, air quality surveys, and emission source testing for gases and
particulate. The country also has more than 11 large cement factories that emit large amounts of dust to the
atmosphere. New regulations require these factories to develop electrostatic precipitation techniques to reduce
air pollution. Remote controlled monitoring devices, environmental monitoring stations, oil spill cleaning works
and environmental laboratories are also in high demand.
Challenges
Saudi Arabias environment market is still young and will need further work on the legal framework. Canada can
be promoted as a model of what or what not to do given Canadas experience in oil and gas and other sectors
currently booming in Saudi Arabia.
Foreign firms face real challenges entering the Saudi Arabian market. Establishing a presence in the market
requires a significant investment of time and money. Business methods are complicated and the bureaucracy is
sometimes difficult to penetrate. To avoid misunderstandings or problems in contract implementation, including
delay or withholding of payments by clients, it is recommended that Canadian firms intending to establish a
presence in the Kingdom seek professional legal and tax advice prior to finalizing any business arrangement.
Canadian consulting companies are advised to form a joint venture with an established Saudi Consulting firm on
a project-by-project basis. Individual consultants or companies generally cannot practice without first obtaining
a license from the Ministry of Commerce.
Canadian companies interested in establishing a business in the Kingdom of Saudi Arabia should consult the
Saudi Arabian General Investment Authoritys Business Center Wizard tool that can be found on their website. It
outlines the required steps, explains the registration process, and provides a systematic approach towards the
investment process. Also, it details the essential actions and required documents for each step or stage. Saudi
Arabia uses a sponsorship system - called Kafala - to regulate the inflow and residency of foreign workers.
Key Local Players
King Abdullah City for Atomic and Renewable Energy
The Presidency of Meteorology and Environment
Saudi Aramco
Saudi Basic Industries Corporation (SABIC)
The Royal Commission for Jubail and Yanbu
Potential Local partners
Al Turki Group
Xenel Industries Limited
Tamimi Group of Companies
MASCO Group
Kindasa Water Services
Soroof Aqua Solutions
WEITCO - Water Treatment Solution Company
Canadian Contacts:
Canadian Embassy in Saudi Arabia
Diplomatic Quarter, PO Box 94321 Riyadh,
Saudi Arabia Contact: Ali El-Hadidi, Trade Commissioner
Tel.: (966-1) 488-2288 Fax: (966-1) 488-0137
Email: ryadh-td@international.gc.ca
Website: www.tradecommissioner.gc.ca/sa
Export Development Canada (EDC)
Embassy of Canada to the United Arab Emirates
Abu Dhabi Mall, West Tower,
9th Floor P.O. Box 6970 Abu Dhabi,
UAE Contact: Jean-Francois Croft, Chief Representative, Middle-East
Tel.: +971 2 694 0376 Fax: +971 2 694 0389
Email: jcroft@edc.ca
Website: www.edc.ca

[1] The Government of Canada has prepared this report based on primary and secondary sources of
information. Readers should take note that the Government of Canada does not guarantee the accuracy of any
of the information contained in this report, nor does it necessarily endorse the organizations listed herein.
Readers should independently verify the accuracy and reliability of the information.