Good morning, friends. It’s another busy day as the news cycle shows no signs of slowing down, with updates pouring in from Saudi Arabia and the UAE. We also have an update on the regional carbon markets playing field, but first, a quick health check on the global EV market…

THE BIG CLIMATE STORY OUTSIDE THE REGION- Stellantis dampens forecast and causes USD 10 bn drop in European auto stocks: The world’s fourth largest automaker Stellantis cut its 2024 profit forecast yesterday on the back of weakening global demand and Chinese competition, decreasing its market value by USD 6.7 bn. The company said it foresees losses between USD 5 and 10 bn as it plans to slash output and offer up incentives for buyers in a bid to revive US business.

Stellantis isn’t the only company feeling the heat: Volkswagen and Aston Martin issued similar concerns with the former cutting its annual outlook amidst trade union troubles and factor closures, Reuters reports. Aston Martin cut its production volume forecast due to supply chain issues and expects lower annual core profit. Mercedes-Benz and BMW made similar moves earlier this month.

Stocks tumbled as a result: After issuing its revised profit forecast, European auto stocks dropped almost 4% losing USD 10 bn in market value. Stellantis’ listings in Paris and Milan lost 14%. The company’s operating profit margin is now expected to fall from double digits to between 5.5% and 7% after already falling 40% this year. Volkswagen and Aston Martin’s shares decreased 2.6% and 20% respectively.

The story grabbed widespread headlines in the int’l press: Reuters | Associated Press | The New York Times | Financial Times | The Wall Street Journal | Bloomberg | CNBC | CNN | BBC

HAPPENING TODAY-

Cairo Sustainable Energy Weekkicks off today and will run until 3 October at the Nile Ritz-Carlton in Cairo. Under the theme Building a World that Sustains, the event will gather ministers and private sector players from across the Arab world to discuss renewable energy, grid interconnection projects, sustainable development, and everything in between.

WATCH THIS SPACE-

#1- Taqa Arabia is looking to set up two new solar plants with investments ranging between USD 25-30 mn, the company’s head of sustainability Sherif Mubarak told Al Borsa. In July, chairman Khaled Abu Bakr said that the company is negotiating with clients in the tourism, industrial and agricultural sectors about proposed projects to produce 150 MW of solar energy in Egypt.

#2- IHC to boost its investment in South African mining assets: Abu Dhabi-based International Resources Holding (IRH), a subsidiary of the UAE’s International Holding Company, partnered with South Africa’s Public Investment Corporation (PIC) to invest in green energy, rail infrastructure, and mining in South Africa, according to a statement. PIC is Africa’s largest asset manager, holding some USD 169 bn in assets across the mining, agriculture, manufacturing, real estate, and financial services sectors.

The partnership will focus on:

• Bringing undeveloped mining assets to full production capacity;
• Offsetting the energy production capacity of coal-fired thermal plants scheduled to be decommissioned in a bid to reduce greenhouse gas emissions;
• Boosting the country's export capacity by ironing out bottlenecks across key mining corridors leading to the Richards Bay, Saldanha, and Durban ports;
• Establishing an AI geoscience venture to conduct geological surveys and research to identify new mining prospects.

REMEMBER- IHC is ramping up efforts to secure critical metal supplies from Africa, acquiring a 51% stake in Zambia’s Mopani Copper Mines for USD 1.1 bn in April. Though it withdrew a bid for Vedanta's 51% stake in Zambia's Konkola Copper Mines, the company is eyeing EMR Capital’s 80% stake in Zambia’s Lubambe Copper Mine and is in advanced talks to mine nickel in Burundi, along with metals in Tanzania and Kenya. IHC is also focusing on renewable energy in mining, planning to use solar power at iron ore sites in Angola, with USD 1 bn in mining acquisitions expected this year.

#3- Regional carbon markets are heating up: Casablanca Finance City (CFC) and Caisse de Depot et de Gestion (CDG) have signed an MoU to establish a regional voluntary carbon market, according to a statement. The project is aligned with global emissions reduction goals and aims to boost Morocco’s sustainable development and finance efforts.

VCMs are picking up regionally: Egypt’s voluntary carbon market (VCM) — Africa’s first VCM — was officially launched in July after the EGX developed a comprehensive framework for carbon certificate trading, settlement, and transparency. The PIF-backed Regional Voluntary Carbon Market Company (RVCMC) also plans to launch its carbon trading exchange in the 2H 2024, before which the company aims to make available exchange and advisory services to buyers and suppliers.

#4- US approaches deadline to unveil first of two solar tariff decisions: The US Department of Commerce is due to submit the first of two preliminary decisions on imposing tariffs on solar panels from four Southeast Asian countries today, Reuters reports. The American Alliance for Solar Manufacturing Trade Committee is accusing 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.

What’s next? The Department of Commerce will consider cross-border subsidies for the first time to make its decision. If the case is successful, higher prices might be imposed on companies importing solar panels to use on rooftops or for large-scale solar projects within months.

Not everyone’s on board: Some US solar manufacturers do not support the imposition of tariffs in fear of rising solar panel costs in the US where solar panels are already the most expensive in the world. "Imposing tariffs on solar cell imports – when there's currently no solar cell manufacturing in the US – will only enhance the profits of incumbent manufacturers, and will stifle America's ability to onshore the solar supply chain and meet the fast-growing demand for clean, affordable and reliable power supply," President of Invenergy Jim Murphy says.

IN OTHER TARIFF NEWS- EU continues EV tariff talks with China: The EU will continue negotiations with China over adding tariffs on Chinese electric vehicle imports even after voting is conducted on Friday, a source close to the matter told Reuters. The European Commission will vote on its proposal for final tariffs that arose from its anti-subsidy investigation to be imposed for five years. A final decision will have to be made by 30 October and may require a second round of voting to get there. If imposed, provisional duties going back to July will have to be paid but companies can cover those with a bank guarantee until the investigation ends.

#5- Is an India-US minerals agreement in the works? India and the US are reportedly gearing up to sign an initial agreement on critical minerals cooperation during Indian Trade Minister Piyush Goyal's visit to Washington this week, Reuters reports, citing two Indian government sources. The agreement will aim to strengthen supply chains, exchange technical expertise, and foster collaboration between Indian and American businesses in the critical minerals sector.

India is aiming for more: India has also proposed a separate critical minerals trade agreement with the US to eliminate tariffs between the two countries, the newswire adds. This agreement would be modelled after a similar pact with Japanese automakers to access EV tax credits.

DANGER ZONE-

Scientists slam UN FAO for livestock emissions report errors: Over 20 scientists have criticized the UN's Food and Agriculture Organization (FAO) for failing to correct "multiple and egregious errors” in a livestock emissions report, The Guardian reports. Two of the report’s cited academics, Paul Behrens and Matthew Hayek, claim the report downplays the potential of dietary changes to reduce agricultural emissions – which make up about a quarter of total emissions – and includes double-counting and outdated data. These errors have led to an underestimation of emissions savings by a factor of six to 40.

No response from the FAO: Despite raising these issues, the FAO has not adequately addressed them, responding only through a brief webinar. A joint letter, signed by 78 environmental groups, calls for the FAO to adopt higher scientific standards, but the organization has yet to formally address the criticisms.

THE SCORECARD-

Nearly USD 2 tn has been allocated globally for clean energy investments since 2020, with China, the EU, and the US leading the way, according to a new report (pdf) by the International Energy Agency. Key areas of investment include low-emissions vehicles, hydrogen, and batteries. Policies including the US Inflation Reduction Act and India’s Production-Linked Incentive played an important role in the surge in funding almost triple the amount committed after the 2007-08 financial crisis.

Policies are also seeing a surge: The report also notes an increase in trade policies and domestic manufacturing incentives to boost clean energy supply chains. Nearly 200 new trade measures have been introduced since 2020, compared to less than 40 in the previous five years. Energy performance standards have also seen growth, with 35 countries passing new regulations in 2023 alone. Despite some rollbacks in regulations, the overall trend indicates a strong global commitment to clean energy.

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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.

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