Adnoc’s first international equity investment in carbon management

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WHAT WE’RE TRACKING TODAY

TODAY: Adnoc’s first international equity investment in carbon management

Good morning, ladies and gents. The news cycle is beginning to pick up and we have some green financing and acquisitions updates emerging from the UAE and Bahrain. Let’s jump in.

THE BIG CLIMATE STORY- UAE’s Adnoc has acquired a 10.1% stake in Storegga, a UK-based company that develops carbon capture and storage projects around the world.

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

HAPPENING TODAY- The Future Minerals Forum kicks off today in Riyadh, Saudi Arabia and runs through to Thursday, 11 January. The event will focus on resource-rich regions of Africa, Western Asia, and Central Asia and will include a ministerial roundtable with over 60 countries being represented. A parallel exhibition will have some 150 exhibitors and industry sponsors on site.

THE BIG CLIMATE STORY OUTSIDE THE REGION- EU approves EUR 900 mn in state aid for Northvolt’s planned German EV battery plant: The Europe Commission has greenlit EUR 902 mn in German state aid — made up of a EUR 700 mn grant and a EUR 202 mn guarantee — for Swedish electric battery maker Northvolt’s planned EV battery gigafactory, according to a statement. Northvolt is targeting a 60 GWh annual capacity once the factory is fully operational by 2029, providing enough battery cells for between 800k to 1 mn EVs.

Part of EU’s initiatives to compete with the US in green investments: The funds allocated to Northvolt aims to incentivise the Swedish company to build its factory within the bloc, the Commission said, noting that without it Northvolt would have opted to set up shop in the US to benefit from tax breaks implemented under Biden’s USD 369 bn Inflation Reduction Act.

REMEMBER- Northvolt has an ambitious expansion underway: The battery maker raised USD 1.2 bn from international investors in August to fuel its planned expansions in the EU and North America, with rumors circulating it is close clinching a multi bn USD agreement for a Canada-based battery factory. Northvolt has partnered with Norwegian aluminum giant Norsk Hydro to build a recycling plant for EV batteries. The company also revealed its patented sodium-ion battery technology, which aims to minimize reliance on scarce battery minerals like lithium, nickel, cobalt, and graphite.

WATCH THIS SPACE-

#1- Egypt receives partial loan for Dabaa construction: Egypt has reportedly received over USD 1 bn of the USD 25 bn loan from Russia to finance the construction of the El Dabaa Nuclear Power Plant, Al-Arabiya Business reports, citing comments by a government official. The funds were disbursed among the companies implementing the various works at the Dabaa station. The loan — which will cover 85% of the project’s expenses — will be repaid at 3% interest starting October 2029.

REMEMBER- The project is already underway: The Egyptian Nuclear and Radiological Regulatory Authority (ENRRA) granted permission in September for the construction of the fourth and final 1.2 GW reactor at the 4.8 GW Dabaa nuclear power plant.

#2-China’s EV brand Zeekr eyes MENA expansion: Luxury EV maker Zeekr — the electric car arm of China’s Geely — is planning to double its sales volumes in 2024 to 230k units and is looking to expand its foothold into new markets including the Middle East, Europe, and Asia, Reuters reports. The company reported a 65% y-o-y sales increase to 118.8k EVs last year, but missed its target of 140k units sales for 2023 on the back of a price war started by rival EV giant Tesla. Zeekr began delivery of its fourth EV model, the Zeekr 007, last month.

We knew a MENA expansion was in the works: The company’s vice-president Chen-Yu said back in October Zeekr would launch operations in Saudi Arabia, the UAE, Qatar, and Bahrain, with plans to deliver 10k units to the four new markets by 2025.

#3- IFC and Iberdrola partner to boost renewables in emerging markets: The International Finance Corporation (IFC) will extend a sustainability-linked loan to Iberdrola to finance renewable energy projects in emerging markets heavily reliant on coal, including Morocco, according to a statement. Other countries set to receive the loans include Poland and Vietnam. IFC and Iberdrola will also explore collaborations in offshore wind and green hydrogen projects.

Iberdrola has big green goals: The loan will help Iberdrola reduce its direct and indirect greenhouse gas emissions by more than 60% by 2030 from a 2020 baseline while doubling its renewable energy capacity in the same period.

REMEMBER- IFC has more plans for emerging markets: The IFC and several major charity organizations launched the Allied Climate Partners (ACP) at COP28 which aims to raise USD 11 bn for green projects in developing countries. It will also partner with ACP, the Monetary Authority of Singapore, and Temasek to establish a green investments partnership to address climate finance gaps and increase the bankability of green and sustainable projects.

DANGER ZONE-

#1- Scientists predict 2024 will bring record-breaking temperatures: 2024 is likely to be the hottest year in recorded history, with temperatures predicted to rise by 1.3°C-1.6°C compared to pre-industrial era, Bloomberg writes. Last year saw the average global temperature increase reach 1.4°C for the first time in history. The outcomes of the recently concluded COP agreements had pledged to accelerate the energy transition to keep the temperature rise within 1.5°C, a goal which many scientists have now deemed highly unlikely.

Climate change + El Nino = amplified climate crisis: The unprecedented hike is attributed to the combined effects of climate change and the El Niño phenomenon, which brings even warmer weather in the second year of its cycle, compared to the first, Bloomberg said. The impacts of the 2024 heat could be devastating for both the environment and human society, especially for vulnerable populations already facing extreme food insecurity, water scarcity and health risks, the news outlet added.

#2- COP29 host Azerbaijan plans to hike gas production by a third by 2033: COP29 host Azerbaijan plans to expand its natural gas output by a third, to reach 49 bn cubic meters (cbm) a year within 9 years, according to research by Global Witness. The Central Asian country’s goal to ramp up exploration and production of the highly polluting fuel is expected to cost fossil fuel companies some USD 41. 4 bn. Last month, the country’s President Ilham Aliyev said Azerbaijan was “confidently moving toward the goal” of doubling its gas exports to Europe by 2027, Bloomberg reported.

Azerbaijan’s economy is highly dependent on its oil and gas sector: Some 90% of Azerbaijan’s export revenues, and between 30-50% of its GDP come from its oil and gas sector, according to the International Energy Agency. The country’s forecasted production levels would add some 781 mn tonnes of greenhouse gas output to the atmosphere, which is twice the annual emissions of the UK.

The country’s interest in fossil fuels is drawing concern: Over the weekend, the country named ex-oil executive and Azerbaijan’s Ecology and Natural Resources Minister Mukhtar Babayev as the president of 2024’s COP29 climate summit in Baku, sparking concerns from climate activists over Babayev’s former ties to the state’s oil company Socar, and how they will shape the COP29 Presidency’s priorities. BP and other oil giants have also been investing in the country, transferring some USD 35 bn worth of oil and gas production to Azerbaijan since 2020, according to Global Witness.

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CIRCLE YOUR CALENDAR-

Libya will host the Libya Energy and Economic Summit on Saturday, 13 January to Sunday, 14 January in Tripoli. The forum will bring together key stakeholders in the energy sector, including government officials, industry leaders, investors, and experts to discuss opportunities in Libya’s energy industry, including in renewables.

The UAE will host the Management and Sustainability of Water Resources Conference from Monday, 26 February to Wednesday 28 February in Dubai. Water availability in arid and semiarid regions, global water issues, and future water and environmental challenges are all on the agenda.

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

Adnoc makes first international investment in carbon management

Adnoc invests in UK carbon capture company Storegga: State-owned Abu Dhabi National Oil Company (Adnoc) has acquired a 10.1% stake in Storegga, a UK-based company that develops carbon capture and storage (CCS) projects around the world, according to a statement. The acquisitionmarks Adnoc's first international equity investment in carbon management and the first time Storegga receives funding from the Mena region. The financial details of the transaction were not disclosed.

About the funding round: Adnoc’s investment came during Storegga’s fourth round of funding, which saw further investment from existing shareholders including Singapore’s GIC and Australia’s Macquarie, according to a separate statement by Storegga. “The funds raised will be used for delivery of ongoing projects and business development activities across the company,” the statement added.

About Storegga: The company has a portfolio of CCS projects in the UK, US and Norway, including the Acorn CCS project in Scotland, which is expected to store up to 10 mn tons of CO2 per year by 2030. Storegga is also working on green and blue hydrogen projects in Scotland. The partnership between Adnoc and Storegga will leverage their expertise and resources to accelerate the deployment of CCS and carbon removal technologies.

This came as no surprise: Adnoc had allocated USD 15 bn last year to low-carbon solutions and decarbonization technologies and aims to capture 10 mn tons of CO2 annually by 2030.

Adnoc has other plans in the works: Adnoc revised its net zero plan in August, targeting net zero in 2045 instead of 2050. Adnoc also announced in September a final investment decision to set up one of the MENA region’s largest carbon capture projects. The Habshan project will have the capacity to capture and permanently store 1.5 mn tons annually of CO2 within geological formations underground.

Bahrain Steel secures USD 450 mn green loan to build world’s largest solar-powered stockyard shed with solar panels

Bahrain Steel secures USD 450 mn green loan: Iron ore pellet producer Bahrain Steel has secured a USD 450 mn ESG-linked credit line from a consortium of banks — coordinated by UAE’s Mashreq Bank — to develop what it says will be the the world’s largest solar-powered stockyard shed in Bahrain, the company said. Bahrain Steel did not disclose information on the stockyard shed’s targeted capacity or the project’s timeline.

The loan will be used to implement other sustainable practices: Aside from the solar project, the loan will be used to meet the company’s working capital requirements, and will be tracked against a set of relevant key performance indicators and sustainable performance targets throughout the period, Zawya notes. The company says the loan’s framework incentivises it to go beyond mandatory corporate greenhouse gas emission reduction targets, financing the company’s transition toward lower carbon operations.

Partners: While Mashreq served as the facility and sustainability coordinator on the loan, Bank ABC acted as the facility and security agent and account bank, and Ahli United Bank served as the Murabaha investment agent. Bank ABC, Emirates NBD, and Mashreq acted as mandated lead arrangers, while Arab Bank, Ahli United Bank, Gulf Bank, Kuwait Finance House, and Khaleeji Bank served as joint lead arrangers.

REMEMBER- Bahrain Steel has been ramping up decarbonization investments: The company said last month it was launching three projects worth USD 250 mn to expand its local operations in the kingdom, including developing a solar energy plant to power its factories. The company is also teaming up with Essar Group to supply the latter’s USD 4.5 bn green steel project in Saudi Arabia with 4 mn tons of iron ore pellets annually, and is also partnering with Bahrain's Electricity and Water Authority on a 100 MW solar plant in the kingdom.

Slaven Klarin-Smiljanic appointed as Group Managing Director for Stellantis Middle East

Dutch automaker Stellantis has appointed Slaven Klarin-Smiljanic as Group Managing Director for Stellantis Middle East, according to a press release. Klarin-Smiljanic previously served as the company’s CFO for the Middle East will head the company’s Dare Forward 2030 strategy to become a market leader. Stellantis is aiming to increase regional production autonomy from 25% to over 70% and have 25% of its portfolio be composed of EVs by 2030. The company has also appointed Thomas Odier as the new Managing Director of European Brands, which “signals an increased emphasis on growing presence and sales for European brands in the Middle East,” the statement added.

Stellantis’ activities in the region: Global automaker Stellantis announced it will manufacture a new battery-powered Fiat 600 compact SUV in Morocco last July. Stellantis was amongst the three companies that expressed interest in investing a total of USD 145 mn in Egypt’s auto industry over the next three years to produce a total of 60k-70k EVs and combustion engine vehicles every year.

Saudi’s Energy Ministry + Neom team up in the energy sector. Omans Ibri III Solar is underway.

RENEWABLES-

Saudi's Energy Ministry + Neom partner on energy: Saudi Arabia's Energy Ministry has signed an MoU with Neom to team up in the energy sector, SPA reports. The agreement will see them develop technologies and provide technical and regulatory solutions for developing renewable energy technologies, hydrogen, and sustainability.

REMEMBER- Neom has massive hydrogen plans underway: Neom Green Hydrogen Company, a joint venture between Neom, Acwa Power, and US-based gas supplier Air Products, is constructing a USD 8.5 bn utility-scale green hydrogen facility with a capacity of 1.2 mn tons of green ammonia annually and powered by nearly 4 GW from renewable energy sources.

Oman begins procurement process for 500 MW solar plant: Oman’s Nama Power and Water Procurement (PWP) is set to submit a Request for Proposals (RFP) for the 500 MW Ibri III Solar Independent Power Project (IPP), Oman Observer reports. The solar plant is part of Oman’s plan to have 30% of its generation output from renewable energy sources by 2030 and to reach 39% by 2040 under the country’s 2050 net-zero target.

More details:Ibri III Solar will generate 1.5 TWh of renewable energy annually and reduce CO2 emission by 505k tons per annum at full capacity.

REMEMBER- Oman Electricity Transmission Company (OETC) successfully completed tests to remotely operate the project in November. The IPP is also the first solar plant in the Sultanate to be connected to the transmission grid, and operations are expected to begin in 4Q 2026.

ELECTRIC VEHICLES-

Jordan issues regulations for managing and trading used batteries: Jordan's Environment Ministry has issued a draft of regulations for managing and trading used batteries and their parts for 2023, AlMamlaka reports. The draft prohibits unlicensed scrap dealers from dealing in used batteries and requires the disposal of hybrid and electric vehicle batteries through licensed entities for export outside Jordan. It also obliges recycling facilities to dispose of the waste that cannot be recycled by exporting it or destroying it at a hazardous waste treatment center. The draft also bans any recycling or maintenance operations inside storage facilities.

Jordan is preparing its EV infrastructure: Egypt’s Pathfinder Energy Group is planning to set up 500 EV charging stations in Jordan at a total investment of USD 470 mn. Fitch Solutions said in June it expects appetite for passenger EVs in Jordan to remain high amid reduced import taxes on EVs. Jordan, Egypt, and the UAE are also getting EV assembly plants from UAE-based car manufacturer M Glory Holding with an investment ticket of USD 550 mn

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

Abu Dhabi expands recycled water use in agriculture: The Abu Dhabi Agriculture and Food Safety Authority (ADAFSA) says it has delivered recycled water to more than 1.6k farms in the UAE, as part of a plan to conserve groundwater resources and ensure the sustainability of agricultural production. (Wam)

Ship shortages slow Chinese EV exports to Europe

Trouble for Europe’s supply of Chinese EVs: The global shortage of car-moving ships has affected the exports of EVs from China to Europe, pushing up shipping prices to record levels and limiting the supply of Chinese EV brands in the European market, The Financial Times writes. Many older ships were scrapped during the pandemic and many replacement carriers are not expected to be ready for another three years. Chinese automakers — which increased exports due to overcapacity in their domestic factories — have been particularly affected by the shortage, as about one in four EVs sold in Europe comes from mainland China. The shipping shortages have also seen daily charter prices rise to USD 115k, which is 10% higher than in 2022, the report adds. Many Chinese companies plan to build local European factories, but these will not begin producing vehicles until later this decade.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

France expands nuclear power: France intends to construct eight new nuclear reactors in addition to the six already planned. This comes ahead of a parliamentary debate on the country’s energy strategy, which includes extending the lifespan of existing reactors and increasing renewable energy capacity. (Reuters)
Norway to invest EUR 6 bn in hydro + wind power:Norway's state-owned renewables company Statkraft is set to invest EUR 6 bn to upgrade existing hydro and wind power facilities and construct new onshore wind farms. This initiative will double the company’s current wind farm output and enhance hydro power effectiveness, resulting in an additional 3 TWh of electricity output. (Reuters)
Qcells to supply Microsoft with 12 GW of US-made solar panels: Korean PVmanufacturer Qcells will provide Microsoft with 12 GW of panels by 2032, to-be manufactured at Qcells' new USD 2.5 bn factory in Georgia. Microsoft aims to become fully renewable-powered by 2025, while mitigating its supply chain risks. (Reuters)

A new study maps undisclosed industrial activity at sea on an unprecedented scale

New study reveals previously untracked industrial activity in the oceans: A team of researchers from Global Fishing Watch and other institutions has published a new study that uses satellite imagery and machine learning to map the previously unseen industrial use of the ocean. The study, published in the journal Nature, shows the extent and intensity of human activity at sea, such as fishing, shipping, and offshore infrastructure including offshore wind farms. "By combining space technology with state-of-the-art machine learning, we mapped undisclosed industrial activity at sea on a scale never done before," said co-lead author Fernando Paolo, senior machine learning engineer at Global Fishing Watch.

The findings: The researchers analyzed 2 mn gigabytes of satellite data from 2017 to 2021, covering coastal waters across six continents where more than three-quarters of industrial activity is concentrated. They were able to detect vessels and structures that failed to broadcast their positions, revealing numerous "dark fleets" and "dark infrastructure." The map also reveals that about 75% of the world's industrial fishing vessels are not publicly tracked.

Why is this important? The study highlights the potential of this new tech to tackle climate change, improve estimates of greenhouse gas emissions at sea, and inform sustainable ocean development. The open data and tech used can pave the way for governments, researchers, and civil society to monitor and protect the ocean.

And reveals historical changes: The study also reveals how ocean industrialization is changing over time. While fishing activity dropped globally by about 12% during the COVID-19 pandemic, transport and energy activity remained stable. Offshore wind energy also showed the most growth, with turbines increasing ninefold in China and surpassing oil platforms in number by 2021.

CALENDAR

JANUARY 2024

8-10 January (Monday-Wednesday): International Conference on Smart Grid and Renewable Energy, Doha, Qatar.

9-11 January (Tuesday-Thursday): Future Minerals Forum, Riyadh, Saudi Arabia.

13-14 January (Saturday-Sunday): Libya Energy and Economic Summit, Tripoli, Libya.

20-24 January (Saturday-Wednesday): ASHRAE Winter Conference, Illinois, USA.

FEBRUARY 2024

26-28 February (Monday-Wednesday): Management and Sustainability of Water Resources, Dubai, UAE.

MARCH 2024

4-6 March (Monday-Wednesday): International Conference on Sand and Dust Storms in the Arabian Peninsula, Riyadh, Saudi Arabia.

APRIL 2024

16-18 April (Tuesday-Thursday): World Future Energy Summit, Abu Dhabi, UAE.

16-18 April (Tuesday-Thursday): Middle East Energy, Dubai, UAE.

23-25 April (Tuesday-Thursday): Connecting Green Hydrogen MENA, Dubai, UAE.

30 April-2 May (Tuesday-Thursday): Autonomous E-Mobility Forum, Doha, Qatar.

MAY 2024

7-9 May (Tuesday-Thursday): Global Waste Forum, Algiers, Algeria.

19-21 May (Sunday-Tuesday): Saudi Energy Convention, Riyadh, KSA.

JUNE 2024

5 June (Wednesday): World Environment Day, Saudi Arabia.

OCTOBER 2024

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

DECEMBER 2024

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

EVENTS WITH NO SET DATE

2024

Early 2024: The 2023 US Algeria Energy Forum, Washington DC, USA.

12-14 February (Monday-Wednesday): Sustainable Aviation Futures MENA Congress, Dubai, UAE.

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.

2025

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

UAE to have over 1k EV charging stations installed.

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.

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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