Adnoc to snap up 35% of Exxon’s Texas hydrogen project

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WHAT WE’RE TRACKING TODAY

TODAY: It’s an M&A heavy day + A new air-to-water facility lands in the UAE

Good morning, nice people. We have a lot of M&A ground to cover this morning with big news from Adnoc and Taqa, along with an interesting update on an Emirati water tech outfit making drinking water from the air. But first, a quick look into Europe's struggle to revive its domestic EV market…

THE BIG CLIMATE STORY OUTSIDE THE REGION- Germany throws Volkswagen a lifeline: Shortly after Volkswagen said it would close down factories amidst a sector slowdown, Germany’s cabinet has approved additional tax breaks worth EUR 465 mn per annum until 2028 for company fleets of electric cars. Companies will be eligible for depreciating write-offs, starting at 40% during the first year. Only days ago, Volkswagen CFO Arno Antlitz signaled a grave warning that the company only had “a year, maybe two years, to turn things around,” due to slowing demand. The company also announced layoffs earlier this week, predicting a 500k drop in European sales per year.

Volvo is also in the headlines for abandoning its plan to only sell EVs. The Swedish carmaker is backtracking on its 2021 pledge to only sell electric vehicles by 2030, citing the sector’s slump as the reason for their decision. The company is now aiming for 90-100% fully electric or plug-in hybrid sales by 2030 with up to 10% allowed for mild hybrids. “The transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption,” CEO Jim Rowan warned.

WATCH THIS SPACE-

Turkey eyes Chinese EV partnership: Turkish Energy Minister Alparslan Bayraktar is set to visit China in October for talks on a potential partnership on EVs and batteries, Bloomberg reports, citing people with knowledge of the matter. Turkey is aiming to attract Chinese EV makers to produce batteries in the country, especially after the country discovered reserves of rare earth elements near Anatolia which raised its interest in refining the elements locally. “The country wants to be active across the supply chain from raw materials to finished EVs and batteries,” Turkey’s Industry and Technology Minister Fatih Kacir said.

Some work is already underway: Turkey already held talks with Cherry, Saic, and others for EV partnerships, Bloomberg writes. Chinese manufacturers are looking to bypass EU tariffs on their EVs through similar agreements with countries like Turkey which has a customs agreement with the EU. Turkey already partnered with EV maker BYD for a USD 1 bn EV and hybrid production plant last July.

WORTH READING-

Morocco’s desalination sector is setting an example: The renewables-powered desalination plant in Morocco’s Agadir, run by Spanish company Coxabengoa, is setting an example for addressing water scarcity without high costs, The Wall Street Journal reports. The plant uses wind and solar power and produces 275k cubic meters of water daily, supporting both drinking water and irrigation needs.

The synergy between desalination and renewable is crucial: Desalination is an energy-intensive process, but the combination of renewable power and desalination is proving effective, especially in regions like North Africa and the Middle East. Desalination costs have dropped by 60% in the last decade to around 37 cents per cbm while renewable energy costs have also decreased by two-thirds in parallel, WSJ adds, citing GWI data. This decline in costs, along with increased plant capacity, has resulted in a significant reduction in the cost of desalinated water. Plants with a capacity of 1 mn cbm are currently being built, compared to 600k cubic meters just five years ago.

But more needs to be done: Coxabengoa predicts that USD 60 bn will be required for desalination investments over the next five years due to a projected 10% annual increase in demand for this technology.

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CIRCLE YOUR CALENDAR-

The UAE will host the World Utilities Congress from Monday, 16 September to Wednesday, 18 September in Abu Dhabi. The event will gather global energy leaders, policymakers, and other industry professionals from the power and water utilities value chain to discuss industry trends and challenges.

Saudi Arabia will host the EV Auto Show from Tuesday, 17 September to Thursday, 19 September in Riyadh. The show offers a platform for participants to learn about the latest EV technologies and services.

The UAE will host the Green Steel Summit from Wednesday, 25 September to Thursday, 26 September in Dubai. The event will bring together steel industry professionals and decision makers to discuss market intelligence and the latest technological developments in sustainable steelmaking.

Egypt will host the Portfolio Egypt conference on Monday, 30 September in Cairo. The event aims to enhance cooperation among Arab stock exchanges and will cover crucial topics including market integration, product diversification, carbon markets, and regional debt markets. It will aim to outline recommendations to strengthen regional financial markets.

Egypt will host Cairo Sustainable Energy Week from Tuesday, 1 October to Thursday, 3 October in Cairo. The event will bring together policymakers, companies, and experts to discuss collaboration on the renewable energy transition across 17 Arab countries.

The UAE will host the World Green Economy Summit from Wednesday, 2 October to Thursday, 3 October in Dubai. The summit will promote the push for a green economy and will offer a platform for international entities to collaborate on sustainable development, financing, and policymaking.

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

Adnoc to snap up 35% of Exxon’s Texas hydrogen project

Abu Dhabi National Oil Company (Adnoc) is set to acquire a 35% stake in US energy giant Exxon Mobil’s low-carbon hydrogen project in Texas under a strategic partnership agreement inked between the two outfits yesterday, according to a statement.

Initially slated to be operational by 2028, the project’s launch has been pushed to 2029 due to a dispute with the Biden administration over whether the plant qualifies for tax credits under the Inflation Reduction Act, Bloomberg reports, citing Exxon President of Low Carbon Solutions Dan Ammann.

Value of the stake? While the financial terms of the acquisition have not been disclosed, Adnoc is talking up its economics. The Texas facility is set to be “among the lower-cost blue hydrogen proposals,” Michele Fiorentino, Adnoc’s executive vice president for low-carbon solutions and business development, told the business information service.

About the project: Exxon plans to make a final investment decision in 2025. The Texas plant is expected to be the largest of its kind in the world with a daily production capacity of 1 bn cubic feet of hydrogen and over 1 mn tons of ammonia.

Adnoc’s strategy: The Emirati oil giant is looking to expand its blue hydrogen portfolio in the “cost competitive regions to do so,” namely the Gulf and the US, Fiorentino said. The project will supply hydrogen for local refineries and users, while ammonia will be exported.

Exxon is already lining up offtake agreements and construction partners: Japan’s biggest power producer, Jera, inked a non-binding agreement in March to purchase 500k tons of low-carbon ammonia annually from the plant. France’s Air Liquide agreed to build and operate four large modular air separation units to supply some 9k metric tons of oxygen and 6.5k metric tons of nitrogen to the facility.

The story also got ink from Reuters and the Financial Times.

Taqa fully acquires SWS Holding

Taqa completes AED 1.7 bn acquisition of SWS Holding: Abu Dhabi National Energy Company (TAQA) finalized its AED 1.7 bn acquisition of Sustainable Water Solutions Holding Company (SWS Holding), according to a press release (pdf).

What we know so far: The transaction will fully integrate Abu Dhabi Sustainable Water Solutions Company (ADSWS), a subsidiary of SWS Holding, into Taqa's portfolio, adding to its portfolio of wastewater collection, treatment, and recycled water production in Abu Dhabi.

A significant move: Established in 2005, ADSWS is the currently the only company licensed for wastewater collection, treatment, and recycled water production in Abu Dhabi.

What they said: “By bringing the treated water business into Taqa, alongside our other water activities of production and transmission and distribution, we will be able to optimize the way we produce, use and reuse water,” Taqa CEO and Managing Director Jasim Husain Thabet said in the statement.

SWS has been expanding internationally: SWS, alongside Japan’s Marubeni Corporation and French-based utility company Suez, inked a joint development agreement with Uzbekistan’s Investment, Industry, and Trade Ministry and Uzsuvtaminot to develop a USD 1 bn wastewater treatment plant in Tashkent last month.

Taqa has also been adding more water projects to its portfolio: The company is part of a consortium comprising Saudi’s Vision International Investment Company (Vision Invest) and the Gulf Investment Corporation (GIC), which reached financial close on the AED 1.5 bn Juranah Independent Strategic Water Reservoir in Makkah in June.

UAE’s A1rwater’s new facility will be fully operational in 4Q 2024

Emirati cleantech startup A1rwater has unveiled its new air-to-water facility in Dubai Industrial City, according to a statement. The new plant, set to be fully operational by 4Q 2024, will produce over 100k liters of pure water daily from air humidity. The facility will use 50 of its A1R3000 type units to generate 3k liters of water daily.

About the A1R3000 model: The A1R3000 is A1rwater’s air-to-water system designed specifically for industrial and high-volume water production, its website explains. The model is also compatible with having renewables, hydrogen fuel cells, and electricity as its source of energy, according to Airwater’s specs document (pdf). The device can work in temperatures ranging from 15°C to 48°C, as well as humidity levels from 25% relative humidity (RH), to 100% RH. The tech uses UV light to treat the water after the air is filtered and condensed.

This has been in the works: The company raised an undisclosed amount of funding from Abu Dhabi-based venture capital firm Tau Capital in May to scale manufacturing, infrastructure, and distribution, focusing on large commercial and industrial atmospheric water generation facilities.

About A1rwater: Founded in 2018, the water technology company offers other water management and conservation tech such as filtration, multistage UV purification, recirculation, and mineralisation.

Other Emirati firms are exploring the tech: UAE-based green tech company Baynunah Laboratories launched Ma Hawa, a company that extracts potable water directly from the atmosphere last year. Ma Hawa made its water-from-air bottles available for purchase in select Adnoc and Union Coop stores across the country this month and plans to expand its product offering to an additional 90 Adnoc locations at a later stage.

Electric vehicles and decarbonization updates from the UAE

ELECTRIC VEHICLES-

Al Tayer roll out Deepal EVs in UAE: UAE’s Al Tayer Motors signed a distribution agreement with Chinese EV maker Deepal to sell the company’s EVs in the country, according to a statement. Al Tayer will set up a number of showrooms and service facilities in Dubai with the first showroom set to open in 1Q 2025. It will also expand Deepal’s online presence using its digital platforms.

About Deepal: Deepal is a subsidiary of Chinese automaker Changan Automobile focusing only on EVs, The company currently has 3 models including the L07, S07, and G318.

The specs: The L07 has a 300 km range, a maximum output of 190 kW, and 320 newton meters of peak torque. The S07 comes in several models including the EREV — with maximum powers of 175 kW and 190 kW and ranges from 125 km to 285 km — and the BEV model which has a maximum power of 60 kW and 190 kW and ranges of 520 km to 628 km. The G318 has two-wheel drive and four-wheel drive models with a peak power of 185 kW and 131 kW, respectively. The models all have a battery range of 100 kms.

DECARBONIZATION-

EGA adopts digital emissions tracking system to boost decarbonization efforts: Emirates Global Aluminium (EGA) has adopted a digital greenhouse gas emissions tracking system to improve transparency and thus push its decarbonisation efforts forward, according to a press release. The system — the first of its kind in the UAE — automates the tracking, documentation, and validation of Scope 1 and 2 emissions data, and aligns with the UAE’s National MRV Transparency System which supports the country’s climate action plan and air quality goals.

BACKGROUND- Abu Dhabi rolled out a decree in April requiring businesses licensed by Abu Dhabi’s Environment Agency to report their environmental data — including power usage and emissions — every year.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

UAE sees EVs surge 250%: UAE’s EVs and hybrid vehicles saw a 250% jump between 2019 and 2024. Around 79% of UAE customers are also considering EVs for their next car purchase. (AutoData)
Saudi launches heat recovery initiative: Saudi Arabia’s Energy Ministry is launching an initiative with the Local Content and Government Procurement Authority to localize the heat recovery systems industry. (Statement)
Emirates NBD co-chairs Mena unit of global carbon accounting initiative: Emirates NBD has become co-chair of the Mena Chapter of the Partnership for Carbon Accounting Financials (PCAF). The bank will facilitate collaboration among financial institutions to measure and disclose greenhouse gas emissions from loans and investments. Emirates NBD’s Chief Sustainability Officer and Head of ESG Vijay Bains will represent the bank as co-chair. (Statement)

The world’s first zinc megafactory is officially open

Sweden’s Enerpoly has begun commissioning in the world’s first large-scale zinc-ion factory in Stockholm with production set to kick off in 2025, according to a press release. The facility’s full production capacity of 100 MWh is expected to be reached in 2026.

What we know about the factory: The Enerpoly Production Innovation Center will use dry electrode manufacturing equipment to run an end-to-end battery production line for use in large scale storage and backup power.

Why is this significant? Zinc-ion is touted as a better battery storage option than lithium-ion due to its non-flammable properties which reduce fire hazards, according to New Atlas. Zinc is also less expensive, more abundant and has a larger temperature threshold making its batteries easier to maintain, while causing less environmental damage. Zinc-ion batteries last much longer than lithium-ion at reaching 20 years life expectancy, compared to lithium’s 12 years. While zinc-ion batteries are promising they still fall short on energy density in comparison to lithium-ion batteries.

Hygreen allocates USD 2.2 bn for Spanish green hydrogen: Chinese electrolyzer producer Hygreen is set to invest EUR 2 bn (USD 2.21 bn) in green Hydrogen projects in Andalusia, Reuters reports. The money will go towards building an electrolyzer plant with a capacity of up to 5 GW depending on demand to manufacture 5 MW electrolyzers, and green hydrogen production plants. Andalusia is a burgeoning green hydrogen leader in Europe, with its wind and solar power potential offering an advantage to power the projects.

Controversial SRM tech might be needed to meet climate goals

SRM is back in the headlines: The world might have to turn to Solar Radiation Modification (SRM) — an experimental form of geoengineering that can induce atmospheric cooling — to fight climate change as we remain off track to keep warming below 1.5 °C, Chair of the Climate Overshoot Commission and former director of the WTO Pascal Lamy writes in the Financial Times. SRM has garnered much controversy in climate discussions due to the risks associated with it, including messing with weather patterns, damaging the ozone layer, and causing acid rain.

SOUND SMART- What is SRM? SRM — likened to chemotherapy for global warming — involves reflecting sun rays back into space by releasing aerosols like sulfur dioxide in the upper atmosphere to reduce the effects of climate change. The result would be increased cooling in the atmosphere in a similar way to the effect that happens after big volcanic eruptions, FT added. It’s unclear how or whether solar shields would affect solar energy assets.

The tech is controversial for a reason: Some argue that SRM does not address the route cause of emissions or prioritize restoring ecosystems, even if it could induce temporary cooling. Additionally, if the technology was suddenly stopped, the world would experience a rapid surge of warming that could have detrimental effects to people and the environment.

But it might be necessary: The world is not in a position to be picky, Lamy argues, and should seriously consider all the options available, even if controversial. To move forward, thorough research, regulation, and monitoring is needed before the tech is implemented. Establishing transparency and building global approval will also be required, Lamy said, adding that these steps can be explored in time between governments, civil society, and other stakeholders by COP30.

We caught wind of SRM last year: Nonprofit research organization The Degrees Initiative with the United Nations’ The World Academy of Sciences funded research by 81 scientists in the Global South to study SRM last year. The research aims to explore the potential of using moondust to create a shield in Earth’s orbit, creating a sun shield and potentially blocking a large amount of sunlight without significant mass.

Lab-grown cotton can offer a more ethical alternative to traditional farming

Boston-based startup Galy is developing a new technology similar to cell-based meat to produce lab-grown cotton, Bloomberg reports. The new approach to cotton production offers a greener and more ethical alternative to traditional cotton farming, and could help the fashion industry reduce its level of emissions and environmental impact.

Why does this matter? Traditional cotton farming is resource-intensive, consuming vast amounts of water, pesticides, and fertilizers, the news outlet wrote. Growing the cotton for a single T-shirt requires 50x more water than the amount used to wash it over its lifetime. Cotton farming also occupies about 2.3% of global arable land and accounts for 16% of all insecticide sales, contributing to significant environmental degradation.

Enter Galy: Galy’s process of growing cotton in the lab can cut land use by 97% and water use by 99%. It can also reduce the impacts of chemical fertilizers by 91%.

How does it work? Galy scientists cultivate cotton plant cells in a nutrient-rich environment, then genetically engineer the cells to produce elongated, fibrous structures, Bloomberg explains. They activate specific genes responsible for fiber development while suppressing others. The process ultimately transforms the cells into the cotton fibers that are used to create fabrics.

The company has big backers: The company just closed its Series B funding round, raising around USD 33 mn from Breakthrough Energy Ventures, H&M Group, and Inditex. This brought the company’s total raised funds to USD 65 mn, according to Bloomberg.

What’s next? The company has only been able to produce a few kgs of its material but hopes to develop other lab-grown products such as cocoa and coffee. The company also secured a USD 50 mn with Suzuran Medical to supply it with medical cotton for 10 years once they scale up their operations.

CALENDAR

SEPTEMBER 2024

16-18 September (Monday-Wednesday): World Utilities Congress, Abu Dhabi, UAE.

17-19 September (Tuesday-Thursday): EV Auto Show, Riyadh, Saudi Arabia.

23-25 September (Monday-Wednesday): Powerlec Bahrain 2024, Manama, Bahrain.

24- 25 September (Tuesday - Wednesday): Mediterranean Carbon Reduction Forum, Tunisia.

25-26 September (Wednesday-Thursday): Green Steel Summit, Dubai, UAE.

30 September (Monday): Portfolio Egypt 2024, Cairo, Egypt.

OCTOBER 2024

1-3 October (Tuesday-Thursday): Water, Energy and Environment Technology Exhibition, Dubai, UAE.

1-3 October (Tuesday-Thursday): Cairo Sustainable Energy Week, Cairo, Egypt.

2-3 October (Wednesday-Thursday): World Green Economy Summit, Dubai, UAE.

10-12 October (Thursday-Saturday): The IEEE International Conference on Artificial Intelligence & Green Energy, Yasmine Hammamet, Tunisia.

10-12 October (Thursday-Saturday): EVs Electrify Egypt Summit 2024, Cairo, Egypt.

13-17 October (Sunday-Thursday): Cairo Water Week, Cairo, Egypt.

15-17 October (Tuesday-Thursday): EV Auto Show, Riyadh, Saudi Arabia.

15-16 October (Tuesday-Wednesday): Solar & Storage Live KSA, Riyadh, Saudi Arabia.

16-17 October (Wednesday-Thursday): Upscaling Investment on Small-Scale Renewable Energy in Rural Areas Forum, Tunis, Tunisia

17-19 October (Thursday-Saturday): Africa Solutions Week 2024, Rabat, Morocco.

NOVEMBER 2024

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

4-8 November (Monday-Friday): AfricanEnergy Week, Cape Town, South Africa.

6-7 November (Wednesday-Thursday): Renewable Energy Forum Africa, Tunis, Tunisia.

6-7 November (Wednesday-Thursday): Critical Mineral Africa Summit, Cape Town, South Africa.

11-22 November (Monday-Friday) United Nations Climate Change Conference or Conference of the Parties (COP29), Baku, Azerbaijan.

11-14 November (Monday-Thursday): Abu Dhabi International Petroleum Exhibition & Conference, Abu Dhabi, UAE.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

19-22 November (Tuesday-Friday) Aquaculture Africa 2024, Hammamet, Tunisia.

26- 27 November: (Tuesday - Wednesday): World Food Security Summit, Abu Dhabi, UAE.

26-28 November (Tuesday-Thursday): Future Power Expo, Riyadh, Saudi Arabia.

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

27-28 November (Wednesday-Thursday): RAK Energy Summit, Ras Al Khaimah, UAE.

DECEMBER 2024

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nation Convention to Combat Desertification, Riyadh, Saudi Arabia.

3-4 December (Tuesday-Wednesday): MSGBC Oil, Gas & Power 2024 conference, Dakar, Senegal.

JANUARY 2025

12-15 January (Sunday-Wednesday): World Renewable Energy Congress, Manama, Bahrain.

14-16 January (Tuesday-Thursday): World Energy Summit, Abu Dhabi, UAE.

14-16 January (Tuesday-Thursday): Future Minerals Forum, Riyadh, Saudi Arabia.

28-29 January (Tuesday-Wednesday): Sustainability Forum Middle East, Riyadh, Saudi Arabia.

FEBRUARY 2025

23-25 February (Sunday- Tuesday): Global Water Energy and Climate Change Congress, Manama, Bahrain.

24-26 February (Monday-Wednesday): Connecting Hydrogen MENA, Dubai, UAE.

24-27 February (Monday-Thursday): Oman Climate Week, Muscat, Oman.

EVENTS WITH NO SET DATE

2024

End-2024: Emirati Masdar’s 500 MW wind farm in Uzbekistan to begin commercial operations.

QatarEnergy’s industrial cities solar power project will start electricity production.

November: Arab Forum for Renewable Energy and Energy Efficiency, Amman, Jordan.

2025

International Union for Conservation of Nature World Conservation Congress, Abu Dhabi, UAE.

UAE to have over 1k EV charging stations installed.

Middle East Electric Vehicle Show, Sharjah, UAE.

2026

26-29 October (Monday-Thursday): World Energy Congress, Riyadh, Saudi Arabia.

UITP Global Public Transport Summit, Dubai, UAE.

Annual Meetings of the World Bank and the International Monetary Fund, Bangkok, Thailand.

1Q 2026: QatarEnergy’s USD 1 bn blue ammonia plant to be completed.

End-2026: HSBC Bahrain to eliminate single-use PVC plastic cards.

2027

MENA’s district cooling market is expected to reach USD 15 bn.

World Water Forum, Riyadh, Saudi Arabia.

2030

UAE’s Abu Dhabi Commercial Bank (ADCB) wants to provide AED 35 bn in green financing.

UAE targets 14 GW in clean energy capacity.

Tunisia targets 30% of renewables in its energy mix.

Qatar wants to generate USD 17 bn from its circular economy, creating 9k-19k jobs.

Morocco’s Xlinks solar and wind energy project to generate 10.5 GW of energy.

2035

Qatar to capture up to 11 mn tons of CO2 annually.

2045

Qatar’s Public Works Authority’s (Ashghal) USD 1.5 bn sewage treatment facility to reach 600k cm/d capacity.

2050

Tunisia’s carbon neutrality target.

2060

Nigeria aims to achieve its net-zero emissions target.

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Adnoc to snap up 35% of Exxon’s Texas hydrogen project

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TODAY: It’s an M&A heavy day + A new air-to-water facility lands in the UAE

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Adnoc to snap up 35% of Exxon’s Texas hydrogen project

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Taqa fully acquires SWS Holding

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UAE’s A1rwater’s new facility will be fully operational in 4Q 2024

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Electric vehicles and decarbonization updates from the UAE

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The world’s first zinc megafactory is officially open

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Controversial SRM tech might be needed to meet climate goals

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Lab-grown cotton can offer a more ethical alternative to traditional farming

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