Good morning, nice people. We have a packed and meaty issue this morning with updates from around the region across all parts of the climate industry. Let’s jump right in.

THE BIG CLIMATE STORY- The Abu Dhabi National Oil Company (Adnoc) has signed a binding agreement with Sawiris-backed, Netherlands-headquartered chemicals company OCI Global to acquire the latter’s 50% +1 stake in their joint venture Fertiglobe for AED 13.28 bn (c.USD 3.62 bn).

^^ We have the details on this story and much more in the news well, below.

HAPPENING TODAY- The Smart Grid Conference will kick off today and run through to Wednesday, 11 January in Riyadh, KSA. The event will see 2.5k participants to promote products, services, and ideas on smart grid technology, renewable energy and grid integrations, AI and blockchain studies on smart grids, and cyber security applications among others.

THE BIG CLIMATE STORY OUTSIDE THE REGION OVER THE WEEKEND- Biden backs ethanol industry tax credits: The Biden administration announced on Friday it is backing a methodology backed by the ethanol industry to claim tax credits for the production of sustainable aviation fuel (SAF). Ethanol groups lobbied the administration to recognize the GREET model for IRA credits. “Key to this was the Treasury recognizing and appreciating the importance of the GREET platform for providing a pathway for corn-based ethanol and [other] biobased fuels to qualify for significant tax credits that were included in the IRA,” said Agriculture Secretary Tom Vilsack. The methodology will be updated in March to incorporate new data and modeling on emissions sources like land use change and livestock activity and strategies to reduce emissions, including CCS, renewable natural gas, and climate-friendly farming practices.

The story made headlines in the international press:Reuters | The Washington Post | AP News

OVER IN (POST) COPLAND-Carbon offset prices plummet to 14-month low after “weak” COP28 agreement: Carbon prices dropped to a 14-month low on the world’s largest CO2 offsets trading market as news of COP28’s “weak” Global Stocktake agreement left brokers skeptical about meaningful government action on climate, The Financial Times reported on Thursday. Futures contracts tracking the EU’s emissions trading scheme (ETS) saw carbon prices fall 4% from pre-COP levels of GBP 71 to GBP 66 per ton of emissions in London. The Global Stocktake’s “weak” language on a fossil fuel phase down and failure to lay out carbon trading mechanisms between states contributed to the fall in carbon prices, lead carbon analyst at the London Stock Exchange Group Yan Qin told FT.

But some say other factors are driving the fall: The EU’s gas storage capacity, mild weather, and weak economic growth are more likely candidates for the drop in the ETS carbon price, head of Future Energy Analytics at S&P Global Commodity Insights Roman Kramarchuk told the news outlet, adding that COP28-driven policies were “inherently a long-term story.” The real value for offsetting a ton of carbon should be around USD 100 to encourage decarbonization, according to a 2021 Reuters poll.

AL JABER SWITCHES TRACKS- Despite COP28’s adopted text calling for a “transition away” from fossil fuels, the UAE’s Abu Dhabi National Oil Company — headed by COP28 President Designate Sultan Al Jaber — said he is moving forward with plans to invest USD 150 bn in oil and gas production by 2030, The Guardian reported on Friday. Al Jaber says the expansion is aligned with the Paris-agreed 1.5C warming limit, citing findings by the Intergovernmental Panel on Climate Change that fossil fuels will be needed beyond 2050 under a net-zero pathway, The Guardian notes. Adnoc’s planned investment comes after discovery of oil and gas wells with up to a 57 bn cbm capacity, which the Climate Action Tracker says will dwarf the impact of the Emirates’ planned USD 54 bn investment to triple renewables production by 2030.

GRETA’S NOT IMPRESSED- Swedish environmental activist Greta Thunberg said COP28’s failure to rally more support for a full fossil fuel phaseout will jeopardize the future of the world’s most vulnerable countries. “This text [Global Stocktake Agreement] is toothless and it is nowhere even close to being sufficient to keep us within the 1.5C degree limit. It is a stab in the back for those most vulnerable,” Thunberg told Reuters on Friday.

AND ELON DEFENDS BIG OIL- B’naire founder of EV giant Tesla Elon Musk says the climate action movement has gone too far and is stoking fears for the future, Reuters reported on Saturday. Hard-to-abate sectors need to offset bns of tons of carbon emissions in the long run and the oil and gas sector “should not be demonized in the medium term,” Musk said.

WATCH THIS SPACE #1- Jordan is still teasing its green hydrogen strategy release: Jordan is said to be “finalizing” its national green hydrogen strategy after saying it would be revealed last quarter, General of Jordan’s Energy and Mineral Resources Ministry Amani Azzam told Ad-dustour. The strategy will set in motion the 13 recently signed green hydrogen and ammonia MoUs paving the way for the kingdom to realize its goal of becoming a global hub for green hydrogen exports.

The pipeline: 5 of the 13 MoUs mentioned by Azzam were signed during COP28.The ministry also signed four MoUs in November with Jordan’s Kawar Energy, Philadelphia Solar, Amarenco, and the German renewables firm Enertrag to carry out feasibility studies for potential green hydrogen projects. In the same month, Jordan signed agreements with Irish-based renewables developer Amarenco and Zurich-based green hydrogen company H2 Global Energy for the development of a EUR 9 bn green ammonia project, and with Amman-based Mass Holding Group to establish a green ammonia plant with a 180k ton annual production capacity.

IN OTHER HYDROGEN NEWS- South Korea eyes Middle East’s green hydrogen: South Korea’s SK Ecoplant and South East Korea Energy have signed an MoU to partner on green hydrogen production in the UAE and Oman, Korean news agency Yonhap reported on Friday. The two companies will conduct feasibility studies to produce green hydrogen at the industrial park in the Abu Dhabi FreeEconomic Zone in the UAE and explore exporting the produced green hydrogen and green ammonia to South Korea. The project is targeting 50k tons of green hydrogen and 250k tons of green ammonia through solar-powered electrolysis.

ALSO– Saudi and Korea to partner on minerals: Saudi Arabia is open to partnering with South Korea on joint mining investments in third countries, Al Mal reported Thursday. Ma’aden and the Saudi sovereign wealth fund’s Manara Metals might also explore investment cooperation in offshore mines.

WATCH THIS SPACE #2- Russia is planning to organize a contact group on climate issues as part of its responsibilities as the Brics chair next year, Bloomberg reported on Thursday, citing Russian first deputy Economy Minister Ilya Torosov. Russia aims to combine efforts in the Eurasian and Brics spaces for the climate agenda. Russia will also set up its own climate monitoring service focused on the oceans, permafrost, desertification, and carbon absorption and intends to invest around USD 111.6 mn in scientific development. “We view decarbonization as a driver of economic growth,” Torosov added.

WATCH THIS SPACE #3- KSA’s Acwa Power is on track to close agreements on five to eight projects in China next year, Zawya Projects reported last week, citing comments by company CEO Marco Arcelli. Projects in the pipeline include 2-4 GW solar and wind farms, 300k metric tons per annum green hydrogen projects, and 300k cbm per day water projects.

A shortcut to its 2030 goals: Entering the Chinese market would help Acwa achieve its goal of tripling its asset base to USD 250 bn by 2030 through expanding to 10 countries instead of 40, Arcelli said. The company plans to concentrate its efforts on Saudi Arabia, the Middle East, Africa, Central Asia, Southeast Asia, and China.

Acwa has been making moves: Acwa Power signed an MoU with Jordan at COP28 to produce 100-150k tons of green ammonia annually, and the company inked an agreement with Indonesia’s PT Perusahaan Listrik Negara (PLN) to build the largest green hydrogen facility in Indonesia last week.

DANGER ZONE- Biofuels fraud calls for tighter import rules: Investigations found that a big share of used cooking oil imported by the EU for the production of biofuels may in reality be virgin palm oil that is falsely labeled, The Guardian reported on Thursday, citing the results of a European study by Brussels-based NGO Transport & Environment (T&E).

Why is this an issue? Crop-based biofuels — like virgin palm oil — contribute greatly to deforestation and raise emission levels. “Sustainable biofuel feedstocks are extremely limited. We need to stop seeing biofuels as a panacea for our climate problem,” biofuels expert at T&E Barbara Smailagic said. As demand for sustainable aviation fuels increases during the green transition, “we need greater transparency and a limit on imports to avoid used cooking oil simply becoming a backdoor for deforestation-driving palm oil” Smailagic adds.

T&E’s results: Despite EU imports of palm oil biodiesel dropping by almost 30%, derivatives of the oil labeled as “waste” — which is likely to include the unsustainable crop-based fuels — increased, the report found, which T&E said still had significant environmental impacts.

DATA POINT- Global coal use will peak in 2023 before declining in 2026: Global coal use is expected to reach an all time high in 2023, breaking last year’s record 8.42 bn tons by a projected 1.4%, the International Energy Agency said in its annual coal market report (pdf) last week. Demand is not expected to decline until 2026, when major renewable energy expansions come online and effectively reduce coal dependency by an estimated 2.3% from current levels.

What’s driving growth this year? Despite a significant push down in coal consumption in developed countries this year — 20% in the US and EU — countries including China, India, Indonesia, Vietnam, and the Philippines, which collectively make up 70% of global coal demand, will more than offset these decreases on a global level, the IEA notes. Demand is expected to surge in India and China by 8% and 5% respectively on the back of weak hydropower output and increasing power demands, the IEA notes.

China will have the last word: More than half of the global renewables expansion over the next three years is set to occur in China, which accounts for more than half of global demand, the IEA notes. The planned clean energy additions are expected to reduce coal demand in the country in 2024 before it plateaus through 2026. That said, the outlook for coal in China will be “significantly affected in the coming years by the pace of clean energy deployment, weather conditions, and structural shifts in the Chinese economy,” according to the IEA. While the first draft of COP28’s Global Stocktake included a clause limiting unabated coal production, the revised, adopted agreement did not mention a date to achieve this phasedown or specific targets as to how it would come about. It also failed to put a limit on new coal-power generation projects.

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CIRCLE YOUR CALENDAR-

Qatar will host TheInternational Conference on Smart Grid and Renewable Energy is kicking off Tuesday, 9 January through to Friday, 12 January in Doha. The conference will explore the importance of the smart grid and renewable energy resources and the viability of various related technologies. It will also host discussions on power electronics, controls, manufacturing, communications and computational intelligence.

Saudi Arabia will host theFuture Minerals Forum from Tuesday, 9 January through to Thursday, 11 January in Riyadh. The event will bring nations and private sectors together to enable the creation of resilient mineral value chains in the resource rich regions of Africa, Western Asia, and Central Asia. The forum will hold a ministerial roundtable with over 60 countries being represented., and delegates will discuss global critical mineral strategies as well as an international exhibition with over 150 exhibitors and industry sponsors.

TheUAE will host the Management and Sustainability of Water Resources Conference from Monday, 26 February to Wednesday 28 February in Dubai.The conference is set to address the importance of water resources availability in arid and semiarid regions and to discuss global water issues and address future water and environmental challenges.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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