Closing the loop: how Aramco is progressing towards a circular economy

Every year, over 2 billion tons of municipal solid waste is generated around the world. Less than 20% of this waste is recycled, with most of it going to landfill sites, which if not adequately sanitized can also contaminate the local soil, water, and air. 

In the current global economy, often referred to as a ‘make, use and dispose of’ economy, raw materials are taken from the Earth to make products that are disposed after use. This process is linear. A circular economy, by contrast, ‘closes the loop’ by keeping products and materials in circulation (until they reach the end of their life-cycle) through processes like reusing, refurbishing, recycling, recovering, reducing, remanufacturing, repurposing, repairing, and rethinking. In practice, it involves reducing waste, conserving precious resources and reducing the generation of waste and greenhouse gas (GHG) emissions. 

First established in the 1970s, the concept of the circular economy has been rapidly gathering momentum globally. It is a model of production and consumption which involves using and reusing existing materials for as long as possible. 

The path to circularity 

Despite the heightened awareness and interest in circularity recycling rates have declined globally from 9.1% in 2018 to 7.2% in 2023. This means that out of 100 billion tons of material extracted from the planet, only 7.2 billion tons were cycled back into the world economy in one year. There is a need to shift patterns of consumption by creating policies and frameworks that incentivize the wider adoption of more sustainable and circular practices, as well as providing support and resources to assist the transition from a linear to circular economy.  

Although Aramco has fostered a culture of resource preservation for many years, the company began implementing the transition to a circular economy model as a stand-alone and structured program in 2020, with the Circular Economy Taskforce. After reviewing best practices from around the world, the Taskforce developed Aramco’s Circular Economy Framework, governed by seven circular economy principles. 

In 2021, Aramco commenced the roll-out of a corporate execution plan to apply these principles across the company’s value chain. Aramco introduced an operational excellence process to guide all departments on their journey to increase circularity. A pilot project across multiple departments successfully implemented more than 200 circular economy initiatives. 

Aramco has since executed a broader roll-out of the plan, introducing circularity principles to the capital project guidelines and engineering standards. 

Since 2024, the company has accelerated the adoption of circularity models across operations, from design and engineering to procurement, construction, and information technology. In just that year, Aramco implemented over 300 circular economy initiatives across various value chains, with the aim of improving circularity as well as operational efficiency, safety, economic performance, and social impact. Examples include the Drilling and Workover Circularity Program, the Procurement and Supply Chain Circular Economy Program, and the Excess Materials Management System. 

Reduce, reuse, recycle 

Preserving and extending resources and asset life-cycles enhances the utilization of equipment, and improves longevity by reusing, repairing, upgrading, and redeploying assets through recycling programs designed to recover valuable materials. 

Aramco is increasingly adopting the 3Rs — reduce, reuse, and recycle — across more parts of the value chain.  

Building a circular supply chain, involves closing material loops and reducing waste creation. This was reflected in procurement and supply chain operations by adopting circular procurement, rethinking the need for the purchase of new assets, reusing or refurbishing existing assets, and purchasing recycled products. 

To advance circular procurement, Aramco has carried out scrap recycling since 2019. The company also carries out regular repairs on equipment to reduce waste, deploying advanced repair technologies on rotating and stationery industrial machinery. 

Turning waste to value 

To track waste more efficiently, the company continues to enhance its Corporate Industrial Waste Manifesting System, a specialized database of all the industrial waste circularity efforts implemented by operating and service facilities. The company also aims to advance technologies for carbon storage, with plans to store up to 14 million tons of CO2 per year by 2035.  

In 2023 Aramco piloted a CO2 geological sequestration solution in partnership with the King Abdullah University of Science and Technology (KAUST), involving the injection of CO2 dissolved in water into reactive basalt formations to permanently store CO2 through carbon mineralization. 

Another potential solution to reduce CO2 emissions is direct air capture (DAC). DAC technology is designed to remove CO2 from the atmosphere, which can then be utilized in value-added products (including lower-carbon fuels) or stored in underground formations. Although the technology has not yet reached full commercial deployment, several pilot-scale DAC plants have been commissioned. In March 2025, in collaboration with Siemens Energy, Aramco launched the Kingdom’s first CO2 Direct Air Capture (DAC) test unit, in Dhahran, to capture up to 12 tons of CO2 per year. 

To help reduce environmental impact, Aramco invests in renewable energy sources — one of the company’s circular carbon economy principles — and aims to invest in up to 12 GW of solar and wind energy by 2030. 

Aramco is also exploring geothermal energy opportunities in Saudi Arabia, where geothermal energy resources are available, particularly along the Red Sea. Geothermal energy can be used for district heating and cooling, water desalination, and electricity generation. 

Innovation and circularity 

Transitioning to a circular economy requires a well-functioning innovation ecosystem. This is why creating and adopting innovative technologies is so important. Aramco’s focus on sustainability-related innovation has only increased over the past few years, with dedicated R&D investment in 2023, amounting to approximately $540 million, which was more than half of the company’s total R&D spend for that year. In partnership with Sabic, the global petrochemicals company, Aramco is developing technology to recycle plastic waste by converting it into circular polymers. This process allows the use of difficult-to-recycle used plastics, which would otherwise be destined for incineration or landfill. In 2023, Aramco achieved a milestone in the project by successfully converting oil derived from plastic waste to produce the MENA region’s first ISCC+ certified circular polymers, a substance that can benefit a wide range of industries.