Good morning, nice people. It’s a busy morning in the region with a bit of everything including another mega project in Uzbekistan for Acwa Power, but first, an update on tensions brewing between the EU and China…

THE BIG CLIMATE STORY OUTSIDE THE REGION- The EU-China trade spat intensifies: The EU is preparing to launch a “trade war” with China over the import of cheap electric cars and cheap solar and wind technology, according to comments made by president of the European Commission Ursula von der after a meeting with the Chinese president Xi Jinping. “Europe will not waver from making tough decisions needed to protect its economy and security,” Leyen said in a statement.

China is not convinced: China’s cheaper green technologies are necessary to further the energy transition, Xi Jinping's Special Envoy for Climate Change Liu Zhenmin told Bloomberg on Thursday. Backlash from the US and EU results in a “delay in the substitution of fossil fuels by renewables globally,” Liu said, adding that energy transition costs would increase by up to USD 6 tn without China’s production. Liu urges countries to instead take advantage of China’s low cost products ahead of his upcoming meeting with American counterpart John Podesta.

Tensions have been brewing for a while between China and the West: Trade tensions have been sparked between China and the West over the oversupply of cheap solar panels and EVs from China, which has crowded American and European markets and threatened domestic production. The European Commission launched its investigation in September to consider imposing punitive tariffs on Chinese EV imports as a protection measure for local producers. The US and China seem to be “ on more stable footing,” however, since US Treasury Secretary Janet Yellen’s diplomatic visit last month.

The story made headlines in the international press: Reuters | AP | Bloomberg | The Financial Times | AFP | The Guardian

HAPPENING TODAY-

The Global Waste Forum is kicking off today in Algiers and running through to Thursday. The forum will focus on the latest waste management technologies and bring together industry leaders to explore cooperation on circular economy strategies, renewable energies, and digitization.

WATCH THIS SPACE-

#1- An agreement on Pakistan’s Reko Diq could be coming: A delegation of senior Saudi officials including executives from Manara Minerals are looking to continue talks on the acquisition of a stake in Barrick Gold’s Reko Diq copper and gold mining project in Pakistan, Reuters reports, citing a Pakistan government document it says it has seen.

BACKGROUND- Manara is a joint venture between the Public Investment Fund and mining giant Ma’aden. Manara was said to be close to a USD 1 bn investment in the mining project — one of the world's largest undeveloped copper-gold areas. A preliminary agreement could be made public in a matter of weeks, sources said last month.

#2- The UK is eyeing Egypt’s green hydrogen sector: An unnamed UK company is looking to invest in the country's green hydrogen sector, British Ambassador Gareth Bayley told AlArabiya on Sunday. The projects are set to be announced in the upcoming period, Bayley added, without providing any further details. British companies are also currently exploring further investments in renewable energy, sustainable infrastructure, sustainable cities, and transportation, he added.

UK is upping its regional presence in Egypt: The UK’s Globeleq acquired a 48.3% equity stake in the 25 MWp Winnergy solar PV plant in Egypt from Enerray last month. The plant is located next to Globeleq’s 66 MWp ARC solar plant at the Benban Solar complex.

Egypt updated its petrochemical industry framework plan earlier this year in April to include more biofuels and decarbonization efforts by 2040, according to a statement. The country is planning to develop a USD 120 mn plant for methanol derivatives with a capacity of 140k tons annually. It's also aiming for a bioethanol plant with an investment ticket of USD 120 mn and a capacity of 100k tons annually.

And more: Egypt will also construct solar and wind farms to produce green ammonia, offsetting some 120k tons of CO2 per year. Sustainable aviation fuel will also be produced with an investment ticket of USD 30 mn and 120k tons annual capacity, the statement notes. Egypt also plans to produce 205k sqm of low-carbon wood using rice straw. The EUR 351 mn project is expected to offset around 360k tons of CO2 annually.

#3- UN implements new rules for carbon credit market: The UN will now allow individuals who are negatively affected by green projects — through exploitation or loss of land — within the global carbon credit market to appeal decisions or file grievances against those projects, according to a press release on Friday. This move aims to empower vulnerable communities and ensure accountability as the UN aims to establish a high integrity international carbon market. Carbon credits have already been receiving its fair share of backlash over false claims of offset and greenwashing by major companies including Apple.

But filing fees may hinder complaints: Fees for filing an appeal or grievance are set at USD 30k, which is seen by supervisory board members as “too low for project developers, but too high for vulnerable groups,” according to Argus Media. However the fee can be waived for vulnerable groups including indigenous people and local communities.

Carbon markets have a history of exploiting developing nations: Concerns have grown as projects aimed at reducing carbon emissions under the Paris climate agreement, such as renewable energy generation, often exploit or displace communities in the developing nations where they occur, AFP reported on Saturday. “It is a first step towards providing protections for indigenous peoples, but improvements will still be needed,” Gilles Dufrasne from think tank Carbon Market Watch, said.

This may bring up cases in the Western Sahara disputed territory: The European Union has said that it would not import energy from the Western Sahara due to the disputed status of the territory, which it recognizes as separate from Morocco under international law. Around 81% of the land allocated for Morocco's giant renewables plans are located in the Western Sahara — which is considered “non-self-governing territory,” by the UN. However, EU countries including Portugal, Spain, France, and Germany signed agreements with Morocco for future cooperation on renewable energy, including projects located in the disputed region. The region’s indigenous group the Sahrawi have been displaced to a part of the Saharan desert where the impacts of climate change will be felt more severely.

ON A RELATED NOTE- Shell accused of selling unearned carbon credits: Dutch fossil fuel giant Shell registered and sold 5.7 mn of “phantom” carbon credits between 2015 and 2021 tied to CO2 removal that never occurred, raising more doubts on the future of carbon capture, The Financial Times reported on Sunday. Canada’s Alberta provincial government allowed Shell to register carbon credits captured from its Quest carbon capture facility, however the credits were equivalent to twice the volume of CO2 actually captured by the plant. Shell sold the credits to top oil sands producers and its own subsidiaries, including Chevron, Canadian Natural Resources, ConocoPhillips, Imperial Oil, and Suncor Energy. The credit issuances were part of a subsidy scheme aimed at boosting the carbon trading industry before ending in 2022.

AND SPEAKING OF SHELL- The fossil fuel giant is pushing back against investor calls for better green targets: Proxy advisory firm Glass Lewis advised British oil giant Shell shareholders to vote against a resolution proposed by investors calling for the energy company to set stricter climate targets, including targets to reduce scope 3 emissions, Reuters reported last week. Shell's board also recommended voting against the resolution, which last year received 19.3% in-favor. Shell's existing greenhouse gas emission reduction goals and actions as sufficient, Glass Lewis argued, adding that there is no conclusive evidence that Shell is significantly behind its peers with regards to emissions goals. The resolution was filed by activist shareholder Follow This, and is supported by 27 investors who together hold around 5% in Shell. The resolution is set to be voted on at Shell's annual general meeting on May 23.

Shell watered down its emission goals: Shell lowered its emission goals and is now aiming to reduce its scope 3 emissions by 15-20% by the end of the decade, down from the previous 20%. The company also dropped its goal of a 45% reduction by 2035.

#4- France to issue offshore wind tenders: France is set to issue a series of tenders and incentives aimed at increasing offshore wind capacity sixfold by 2035, Bloomberg reported on Thursday. The plan includes the awarding of 16 GW of projects by October 2026, with a focus on reducing costs and supply-chain constraints. The government's strategy involves a provisional timetable for future auctions, to meet a fifth of the country's electricity demand through offshore wind by 2050.

Offshore wind is picking up: Australia recently approved feasibility studies for six offshore wind farm projects along its southern coast with six more pending approval last week. The projects will collectively have a 25 GW capacity. The US' Biden administration also kicked off a comprehensive plan to auction up to twelve offshore wind development rights auctions by 2028, with four slated for this year. This comes despite a slowing global offshore wind industry, which has faced challenges from inflation, interest rates, and supply chain issues in recent years.

KUDOS-

Over 50% of globally issued USD-denominated sustainable ESG sukuk have been listed on Nasdaq Dubai during 1Q 2024, signaling “the increasing attraction towards sustainable investments and [establishing] Nasdaq Dubai as a favored platform for such offerings,” Wam reported on Thursday, citing DFSA chief executive Ian Johnston.

OUR NEXT CONFERENCE IN CAIRO-

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and its competitive advantages are clear to many of them: It’s a massive consumer opportunity and a regional export hub of tomorrow.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that sees Saudi Arabia, Egypt, and the the UAE at the heart of a more vital Middle East economy — and provide an early, actionable roadmap for those who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks. It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Energy Convention from Sunday, 19 May to Tuesday, 21 May in Riyadh. The convention will see energy and utilities industry leaders advance collaborative decarbonization efforts and identify innovation areas. It will also host the Saudi Utilities Convention and Saudi Hydrogen Convention to address the role and challenges of rolling out hydrogen, water and utility projects that are in line with the global energy transition. Over 10k energy professionals and 200 industry speakers will be present at the event.

The UAE will host The Electric Vehicle Innovation Summit from Monday, 20 May to Wednesday, 22 May in Abu Dhabi. The event will see industry leaders come together to discuss sustainable mobility and tapping into groundbreaking advancements in electric vehicles while engaging with key decision-makers.

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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