As the global energy sector grapples with rising costs, shifting policies, and the challenge of deploying clean technologies at scale, industry leaders are re-evaluating their strategies.
At CERAWeek by S&P Global 2025, Dr.Emmanouil Kakaras, Executive Vice President of GX Solutions at Mitsubishi Heavy Industries (MHI), took the stage to discuss the complexities of the energy transition and the role of breakthrough technologies in driving decarbonisation.
In this conversation with ESG Mena, Kakaras shares his insights on regulatory challenges, carbon capture, and the Middle East’s growing influence in the sector.
- How do you foresee the impact of the Omnibus regulation on the energy transition and carbon capture efforts?
Emmanouil Kakaras: The Omnibus regulation is fundamentally about simplification. One key aspect is improving the Carbon Border Adjustment Mechanism (CBAM). CBAM must evolve into a real tool for promoting decarbonisation and enhancing the competitiveness of energy-intensive industries. If applied rationally, it will encourage investments in green technologies like green steel.
- What are your thoughts on the EU’s regulatory approach to the green transition?
Kakaras: Over-regulation is not necessarily damaging, but it does slow things down. European industries were the first to push for simplification. I mentioned in my panel last Monday that Europe would welcome more incentives rather than just regulation. The Green Industrial Competitiveness Package, introduced alongside Omnibus, aims to unlock funding for technological shifts linked to decarbonisation. Technologies such as green steel, low-carbon cement, and refinery upgrades will greatly benefit from this support.
- What role do you see the Middle East playing in the global energy transition?
Kakaras: The Middle East is one of the most promising regions for energy transition technologies. I have long been a strong advocate for the region, and we strategically focus on it for decarbonisation solutions. The UAE and Saudi Arabia are particularly aligned with European standards, making them key partners in the transition.
- Do you think a carbon tax is viable in the Middle East?
Kakaras: A broader carbon tax would be preferable to CBAM, aligning with WTO recommendations. If implemented thoughtfully, it would allow market forces to drive decarbonisation. However, while carbon pricing is gaining traction globally, in regions like Houston, it remains highly unpopular. Still, in the Middle East, I foresee the UAE introducing a form of carbon taxation within the next two years.
- Where do we currently stand with carbon capture, particularly in the steel industry?
Kakaras: There are significant advancements in carbon capture, particularly in steel production. While I cannot share details yet, I can confirm that MHI is involved in major developments with key partners, and an announcement will be made soon regarding green steel projects.
- What progress is being made in decarbonising cement production?
Kakaras: The UAE’s cement sector has high technological capabilities, and we are actively involved in energy recovery projects. A major breakthrough could come from our collaboration with Heidelberg in Canada, where we are working on a near-carbon-neutral cement plant. The real game-changer, however, will be integrating carbon capture with gas turbine combined cycles (GTCC), making the process carbon-neutral and competitive.
- What is MHI’s involvement in data centre sustainability?
Kakaras: Data centres are a major focus for us. We offer comprehensive solutions, including zero-carbon energy supply, energy recovery, heat pump integration, and air-conditioning optimisation. We are actively collaborating with major players in the Middle East, though I cannot disclose specifics at this time. The integration of carbon capture in data centres will be a crucial innovation in this space.
- What are your views on hydrogen’s role in the energy transition?
Kakaras: I have always been sceptical about the immediate viability of hydrogen, particularly in the Middle East. While it is competitive to produce hydrogen or blue fuels in the region, I believe the focus should initially be on blue fuels rather than pure hydrogen. This is a more realistic and commercially viable step in the short to medium term.
- How viable is carbon storage as part of the energy transition?
Kakaras: Carbon storage is progressing well, particularly in Saudi Arabia, where the Kingdom has launched a 44 million-tonne storage initiative by 2030. MHI was not selected for the first project, but we remain committed to future opportunities, particularly in supporting blue fuels and ammonia production.
- What is your final message on MHI’s role in the energy transition?
Kakaras: MHI is fully committed to the Middle East, both personally and professionally. Our technologies are designed to support the region’s ambitions in competitiveness and decarbonisation.
The Middle East has a unique opportunity to maintain its role as a global energy hub while leading in low-carbon solutions. We are eager to continue our partnerships and expand our contributions to the region’s energy future.