Good morning, nice people. We have a brisk issue this morning with lots of regional EV updates emerging from the UAE and Egypt.

THE BIG CLIMATE STORY- American green transport firm HummingbirdEV is partnering with IBMC Groupto open a microfactory facility in the UAE to produce zero-emission commercial vehicles.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- Exxon Mobil suesinvestors backing climate proposals: In an attempt to prevent a shareholder vote on tighter climate target proposals, Exxon Mobil has filed a lawsuit against activist investors. The lawsuit — the first for the oil giant — was made in a Texas court following demands made by Dutch activist group Follow This and US-based investment firm Arjuna Capital to set scope-3 emissions targets. As of now, the company has only announced scope 1 and 2 targets, and is one of five oil companies in the West who have failed to establish scope 3 targets, according to Reuters.

Follow This is working hard to pressure Big Oil firms: The activist group has pushed for major companies to align their 2030 investment strategies with the Paris-agreed 1.5 °C warming threshold, including Europe’s largest asset manager Amundi, which joined a group of Dutch oil giant Shell’s shareholders demanding more ambitious green strategies. France’s TotalEnergies, BP, ExxonMobil, and Chevron have also faced pressure to accelerate their emissions cuts by 2030.

The story made headlines in the international press:Reuters | Bloomberg | The Guardian | BBC | The Wall Street Journal | The Financial Times | CNBC | The New York Times

WATCH THIS SPACE-

#1- Adnoc pledges more investments in decarbonization: State-owned Abu Dhabi National Oil Company (Adnoc) has raised its budget for investments in decarbonization and lower-carbon projects to USD 23 bn (AED 86.6 bn), up from its initial USD 15 bn (AED 55.1 bn) budget, according to a company statement. Adnoc made the announcement during its annual board meeting.

Where the funds will go: “The increased allocation will include investments to grow the company's domestic and international carbon management platforms,” the company said in the statement. Adnoc aims to decrease its carbon intensity by 25% by 2030 and achieve net-zero carbon emissions by 2045. The company is planning to double its carbon capture and storage capacity to 10 mn tonnes a year by the end of the decade, the statement said.

#2- Egypt’s Elsewedy Electric and Arab Contractors have activated the first of nine hydro turbines on their USD 2.9 bnJulius Nyerere Dam in Tanzania, according to a statement. Construction on the hydroelectric dam — spanning over 1 kilometer with a 34 bn cubic meter (cbm) storage capacity — has been completed, and the consortium’s adjoining hydropower station is expected to generate some 2.11 GW of hydropower from the project once fully operational. The Tanzanian government kicked off the first filling for the dam late in 2022, and after successful testing this week the consortium achieved a rotating speed of 150 rpm with a 50 hertz frequency from operations on the first turbine. 18 bn cbm of water have already been stored to date, and the project is expected to meet the power demands of some 17 mn households in the country once fully online.

#3- South Korea’s SK On says Europe over-dependent on Chinese EV batteries: Europe is at risk of becoming over-reliant on Chinese EV batteries, South Korean battery maker SK On’s CFO Min-suk Sung told the Financial Times. Chinese battery companies’ market share in the EU is expected to rise from 30% to 50% by 2027 as a result of a supply surplus in China that has made it cheaper for European carmakers to import batteries from the South Asian country.

This spells danger for Europe and South Korea: South Korean companies are predicted to see their market share fall from 60% to 40% between 2023 to 2027. Meanwhile, Europeans lack an effective strategy to increase domestic production and are relying on inexperienced newcomers such as Sweden’s Northvolt, Tim Bush, battery analyst at global investment bank UBS, told the FT. South Korea has been expanding its production in the US rather than locally due to the former’s green subsidy scheme under the Inflation Reduction Act, and China is looking to follow suit, FT said.

Not a surprise: Concerns over Europe’s dependence on China have been around for a while, with Reuters reporting last year that Europe was at risk of becoming as reliant on China for lithium-ion batteries and fuel cells as it was on Russia for energy prior to the war in Ukraine. China has also been trying to get around the Biden administration’s attempts to limit its presence in the EV supply chain by investing in Korean companies, Bloomberg reported in 2023.

KSA has a stake in SK On: Saudi’s SNB Capital acquired an undisclosed stake worth USD 100 mn in SK On last year through its EV Batteries fund.

DANGER ZONE-

#1- US sustainable funds recorded in 2023 their first year of annual outflows in over a decade, with global investors pulling a combined USD 13 bn from ESG-linked funds for the full year and USD 5 bn in 4Q alone, according to a report by Chicago-based financial services firm Morningstar. This comes amid rising political scrutiny, a lack of cross-border ESG investment regulations (which has exacerbated greenwashing concerns and driven market hesitancy), and rising interest rates, resulting in the liquidation of 16 ESG funds in the last quarter alone. The majority of the outflows recorded last year were from a single iShares ESG fund managed by BlackRock, the financial services firm found.

ESG fund returns are falling behind its conventional alternatives: The median return for ESG funds was 20.8% last year, trailing behind the 23.9% median gain for the overall category (encompassing both sustainable and conventional funds), as well as the 26.9% gain for the Morningstar US Large-Mid Cap Index, the firm notes. Returns peaked in 2021,

#2- Coal-fired electricity generation and thermal coal exports reached new highs in 2023 despite global efforts to reduce greenhouse gas emissions,Reuters reported last week, citing data by environmental think tank Ember. Electricity generated from coal reached 8.2k TWh through October, up 1% from the same period in 2022, the highest on record, Ember’s new study found. Thermal coal exports also surpassed 1 bn metric tons globally for the first time, up by 6.6% from 2022, the newswire adds, citing data ship-tracking data from analytics firm Kpler. Emissions from electricity generation powered by coal also hit new highs, topping 7.85 bn tons of CO2 and other polluting gasses. The growing use of coal was concentrated in Asia — specifically Indonesia, China, India, Vietnam, the Philippines, and Indonesia.

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CIRCLE YOUR CALENDAR-

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.

Saudi Arabia will host the International Conference on Sand and Dust Storms in theArabian Peninsula from Monday, 4 March to Wednesday, 6 March in Riyadh. The conference will address regional challenges caused by sand and dust storms and discuss monitoring systems, mitigation strategies, economic and infrastructural impacts, and more.

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