Good morning, friends. We have a lot of bits and pieces to unpack this morning as we head into the weekend, with a lot of tariff stories developing at home and abroad. The big news of the day is speculation emerging on a sizable Acwa investment in Turkey’s green energy sector. Shall we get the ball rolling?

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single story dominating the headlines, but China’s outbound investment reaching record levels despite the global FDI slowdown is grabbing some ink. China’s outbound investment has reached record levels since last year as the country continues to set up offshore renewable energy component manufacturing facilities to evade Western tariffs, according to a new report (pdf). Chinese companies have allocated USD 109.2 bn in outbound FDI across 130 clean technology transactions since 2023. The country is shifting focus to advanced manufacturing in a bid to help its slowing economy gain momentum by moving away from property and infrastructure investment.

It’s clear which investments took the lead: China’s 40 biggest cleantech transactions were largely in EVs and EV batteries, hydropower, solar and wind energy, and electricity transmissions, the report added. The country’s investments created new manufacturing hubs in countries including Thailand, Indonesia, Brazil, Hungary, and Morocco. Inbound investment has slowed down as the trade disputes with the US and EU continue. The story got ink in Reuters, Bloomberg, and the Financial Times.

WATCH THIS SPACE-

#1- Jordan looking to match Turkey solar tariffs: Jordanian solar makers want to match Turkey’s recently imposed tariff of USD 25 per sqm on Jordanian solar PV panel imports, according to a statement. The industry is heavily reliant on exports and the fee will harm its competitiveness, head of the Amman and Jordan Chambers of Industry Fathi Al-Jaghbir said, adding he was surprised by Turkey's move given that trade balance is “largely in [its] favor.”

What will be taxed? It is unclear from the statement what goods Al-Jaghbir is proposing to tax, but Jordanian trade figures show the kingdom imported goods worth JOD 320 min from Turkey during the first seven months of 2024.

REMEMBER- Turkey implemented the USD 25 tariff on all solar PV panels being imported from Vietnam, Malaysia, Thailand, Croatia, and Jordan. The country will use the taxes to protect over 60 local solar panel manufacturers as part of an anti-dumping investigation into Asian solar panel imports and will return them to manufacturers if no anti-dumping practices are found.

#2- Dutco mulls green fuel production: Dubai-based engineering firm Dutco is exploring the production of sustainable fuel from biodegradable waste, including aviation fuel (SAF), CEO Sami Kamel told CNBC Arabia (watch, runtime, 3:53). Giving the green light to the project, which is based out of Dubai, would depend on demand levels and production costs, Sami said.

Background: Dutco formed the Oman Sustainable Cars and Aviation Refuelling (Oscar) consortium with Oman’s energy firm OQ, Sumitomo, Lamborghini, and Airbus in June 2023 to study the production of e-gasoline and e-SAF in Oman.

#3- IFC + HSBC launch sustainability fund for emerging markets: The International Finance Corporation (IFC) will put an initial USD 100mn anchor investment into a new fund launched in cooperation with HSBC Asset Management to channel investments towards emerging markets, according to a press release.

Where’s the money going? The fund will invest in publicly listed bonds from corporate and financial institutions in these markets, aligning with HSBC’s Global Emerging Market Corporate Sustainable Bond Strategy. This partnership seeks to address the financing gap in emerging economies, which make up over 80% of the global population but receive a smaller share of global financing. The fund will focus on sustainable technologies, ESG initiatives, and social impact, contributing to the UN Sustainable Development Goals.

#4- US imposes tariffs on Southeast Asian solar panels: The US Commerce Department has announced preliminary tariffs on solar imports from Southeast Asia on the claim that the panels are benefiting from illegal foreign subsidies to supply products at prices lower than their cost, Bloomberg reports. The US Commerce Department expects to complete the investigation in November.

In numbers: The general rates will be 8.25% for Cambodia, 9.13% for Malaysia, 23.06% for Thailand, and 2.85% for Vietnam while company specific rates will be 14.72% on Hanwha Q Cells Malaysia imports, 3.47% on imports from JinkoSolar Malaysian entities, 0.14% for Trina Solar, and 2.85% for some JA Solar Technology operations in Vietnam. First Solar is expected to take a hit while Trina and JA’s tariffs were deemed, “so low as to be meaningless,” by KeyBank Capital Markets.

ICYMI- This is the first of two decisions on preliminary solar tariffs: The US Department of Commerce submitted the first of two preliminary decisions on imposing tariffs on solar panels from four Southeast Asian countries on the back of accusations raised by American Alliance for Solar Manufacturing Trade Committee against Chinese companies using factories in Malaysia, Cambodia, Vietnam and Thailand of flooding the US market with underpriced panels and causing a price drop of over 50%. The committee also accused manufacturers of receiving subsidies from China on raw materials and components with added support from the Belt and Road Initiative.

ON A RELATED NOTE- China has requested the World Trade Organization (WTO) to rule on Canada’s recent tariffs on Chinese EVs, steel, and aluminum, Reuters reports, citing a statement from China's commerce ministry. The move follows Canada’s imposition of a 100% tariff on Chinese EVs and a 25% tariff on steel and aluminum, which began earlier this week on Tuesday. China strongly opposes these tariffs, calling them “unilateral” and “trade protectionist.” The ministry warned that the measures would disrupt global industrial and supply chains and announced it will conduct anti-discriminatory investigations into Canada's actions.

REMEMBER- China is being hit by tariffs from all sides: The European Union is set to vote on imposing tariffs as high as 45% on EVs imported from China on Friday. The vote is expected to proceed despite last-minute negotiations with Beijing to avoid these levies. If approved, the new tariffs would be implemented from November and last for five years, unless opposed by a qualified majority of EU member states. The US has also recently confirmed 100% tariffs on Chinese EVs and exclusion of Chinese-made components from EV subsidies.

THE SCORECARD-

Hydrogen installations stall even as investments double, IEA finds: Final investment decisions for hydrogen projects have doubled in the past year, largely driven by China, but the sector is still lagging in demand and installed capacity, according to a new report (pdf) by the International Energy Agency (IEA). Despite the five times increase in projected low-emission hydrogen production by 2030, the IEA warns that demand remains low, with only a quarter of production projects linked to firm demand targets.

China is dominating the hydrogen sector: China leads with more than 40% of investment decisions in the last 12 months, a surge that could surpass even the rapid growth of solar energy.

There are still obstacles in the way: Most projects worldwide are in early stages, and the industry faces challenges including unclear demand signals, financing difficulties, hydrogen price hikes, and regulatory uncertainty. There are also technological hurdles, with the cost of electrolyzers increasing due to tight supply chains, further complicating efforts to scale up low-emission hydrogen production.

Policy changes are necessary to ramp up demand: “For these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector” IEA Executive Director Fatih Birol said.

REMEMBER- Hydrogen is booming in the region: The Middle East region’s planned hydrogen capacity recently doubled y-o-y, with final investment decisions reached in a handful of large projects that are expected to lead the “race to start exports by 2030,” Currently, there are 83 renewable hydrogen or ammonia projects in the region that collectively produce 9 mn MT of hydrogen each year.

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CIRCLE YOUR CALENDAR-

The UAE will host the first EU-GCC Green Transition Forum on Wednesday, 9 October in Abu Dhabi. The forum will gather industry leaders, policymakers, and experts to explore netzero emission strategies and host discussions on sustainability across the region. Interested parties can register here.

Egypt will host the EVs Electrify Egypt Summit from Thursday, 10 October to Saturday, 12 October in Cairo. This event will bring together industry players, engineers, and over 300 exhibitors for interactive showcases and EV test drives.

Egypt will host Cairo Water Week from Sunday, 13 October to Thursday, 17 October in Cairo. The event will explore various themes relating to water and climate and enhancing resilience in communities.

Egypt will host the World Urban Forum from Monday, 4 November to Friday, 8 November in Cairo. The forum, established by the UN, will center around the effect of rapid urbanization on communities, economies, climate change, and policies.

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