Good morning, friends. It’s a relatively quiet morning on the regional climate industry front, but there are some developments emerging from the mining sector in Saudi Arabia and a spot of good news on MENA’s green hydrogen export plans. But first…

A quick programming note: Enterprise Climate will be taking a publication holiday tomorrow and will be back in your inboxes at the usual time on Monday morning.

THE BIG CLIMATE STORY OUTSIDE THE REGION- China hits back at the US to protect its EV industry: China has begun a dispute settlement against the US at the World Trade Organization (WTO) citing “discriminatory subsidies” that exclude their EVs from the market. Under the Inflation Reduction Act, subsidies are provided for consumers to purchase more EVs and companies to produce more renewables, which China has argued is exclusionary to non-American goods and pursued legal action to “safeguard [their] legitimate interests … and maintain a fair level playing field of competition.” The proceedings will take at least 6 months but the US will be able to appeal into a legal void should the WTO rule against them.

The story made headlines in the international press:Reuters | AP | Bloomberg | Wall Street Journal | The Independent

WATCH THIS SPACE-

#1- One step closer for a sustainable aviation fuel plant in Egypt: US multinational conglomerate Honeywell in partnership with the European Bank for Reconstruction and Development will complete a feasibility study within the next few months for a proposed sustainable aviation fuel production facility in Egypt, a delegation from the firm said during a meeting with the Oil Ministry. Egypt said the SAF studies had begun earlier this month to implement Egypt’s first SAF project using used cooking oil.

ICYMI- Honeywell has been considering building a sustainable aviation fuel production facility in Alexandria under a public-private partnership with state-run Egyptian Petrochemicals Holding Company and local private companies, the Oil Ministry said last October.

#2- Turkey imposes tariffs on solar panel imports: Turkey will implement a tariff of USD 25 per sqm on all solar PV panels being imported from Vietnam, Malaysia, Thailand, Croatia, and Jordan, according to a statement from the Ministry of Trade. Turkey previously introduced import tariffs of USD 20 per square meter for all solar modules from China, following initial restrictions placed in 2020.

Why is this important? Turkey is using the taxes to protect over 60 local solar panel manufacturers as part of an anti-dumping investigation into Asian solar panel imports, according to Hurriyet. The tariffs will be returned to manufacturers if no anti-dumping practices are found, the statement notes.

#3- The US is mulling a proposal by the EU and the UK to cut off most export credit financing for fossil fuel projects, The Financial Times reports, citing people with knowledge of the matter. Under the proposal — discussed at ongoing talks between the Organisation for Economic Cooperation and Development’s member countries in Paris — export credit agencies, the biggest source of financing for the sector, would be allowed to finance oil, gas, and coal projects only if the country can determine that they align with climate goals. The EU is also proposing a transparency requirement for all fossil fuel projects.

The EU and UK need the US on board: For the proposal to move forward, a consensus is needed from the OECD’s 38 member countries, including the US, the EU, the UK, Canada, as well as big fossil fuel backers that have not yet agreed to align their public finance with the Paris agreement, such as Japan and South Korea. The proposal comes at a time when the OECD countries are set to reconvene in June and November to continue discussions.

A necessary move? Fossil fuel projects received 7x more support from G20 export credit agencies compared to their counterparts on the renewable energy front between 2019 and 2021, the FT writes, citing data from Oil Change International. USD 33.5 bn in financing annually went towards projects in the oil and gas sector compared with USD 4.7 bn for renewable energy development. US credit export agency Exim recently extended USD 500 mn in financing for an oil and gas project in Bahrain, despite protests from US lawmakers saying it hindered climate action.

#4- Electricity generated from clean energy sources in Europe surged to 60% in the first two months of 2024, Reuters reports, citing research by think tank Ember. Total electricity generated from clean energy sources — including hydro, solar, wind, and nuclear power — reached a record 516.5 TWh, up 12% y-o-y. Nuclear power remained Europe’s primary source of clean energy at 172.5 TWh of electricity, up 4.1% from last year, the newswire writes. Hydro dams followed with 153 TWh of electricity, accounting for 17.6% of Europe’s total electricity generation. Wind farms went up 14% y-o-y at a record 137.5 TWh, and solar power also rose nearly 19% y-o-y to reach a new peak of 24.4 TWh. At the same time, coal and natural gas fell by 15% and 4% y-o-y respectively.

IN OTHER EU NEWS-EU is working on upgrading its regulations for green bonds: The EU’s securities watchdog ESMA has proposed rules aimed at fostering competition among external reviewers of green bonds, Reuters reports. ESMA’s proposals address potential conflicts of interest between external reviewers and the company whose green bond they are checking, and aims to standardize registration requirements to lower entry costs for applicants and provide a level playing field. The measures proposed also ensure that the proceeds are invested in projects aligned with the EU’s taxonomy for sustainable investments. The public consultation process will precede the watchdog’s final recommendations to the European Commission, with the new green bond rules expected to be implemented in December.

DANGER ZONE-

#1- Over 80% of sustainability-linked bonds (SLB) issued between 2018 and November 2023 were not in line with the rules set out in the Paris Agreements, a Climate Bonds Initiative (CBI) report (pdf) found. SLBs provide incentives for sustainability targets with the threat of a higher interest rate if not met and, unlike green bonds, their investment returns are open for general use without being restricted to specific projects. CBI however saw some improvement in 2023 with 33% of SLBs aligning with climate goals.

REMEMBER- SLBs have long been scrutinized: Companies in the market faced greenwashing allegations and investors steered away causing a market downturn after almost a tenfold increase in sales between 2020 and 2021. Between the start of 2023 and May, sales of SLB were down by 28% y-o-y. SLBs are “riddled with exit clauses, toothless terms and conditions, vague timelines and opaque targets — all designed to protect issuers,” said Maia Godemer, a sustainable finance analyst at BNEF, “but correcting course could unlock tns of USD of investment, shepherding decarbonization in ways no other financial instrument can.”

CBI blames structural flaws and loopholes: CBI argues that the decline in investments is a result of structural flaws, weak reporting, and insufficient decarbonization targets which investors don’t have the resources to weed out of the market. The non-profit pointed out two loopholes with one exempting issuers from paying a penalty for missing targets if there were rule or policy changes, and another allowing the excluding post-issuance acquisitions from performance evaluations.

#2- Turkey and Egypt are mired with oil spills: Egypt and Turkey are among the worst hotspots for oil slicks — spills of liquid petroleum hydrocarbons into the marine ecosystem — by ships despite their strategic maritime locations and reliance on tourism, The Financial Times reports. Through the use of satellite imagery and AI, researchers have identified over 2.7k oil slicks globally as a result of cheap fuel filtering and improper waste disposal, mostly located in Southeast Asia, the FT explains. Countries like Egypt and Turkey, need to monitor and report these violations more effectively, FT suggests. Experts are also calling for stringent enforcement of maritime laws to curb the pollution.

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CIRCLE YOUR CALENDAR-

The UAE will host the World Future Energy Summit from Tuesday, 16 April to Thursday, 18 April in Abu Dhabi. The summit will address solutions for development in the transformation of future energy systems. The summit will also feature discussions on recycling, waste-to-energy, and air-to-water trends and progressions.

The UAE will host the Connecting Green Hydrogen MENA event from Tuesday, 23 April to Thursday, 25 April in Dubai. The event will explore green hydrogen partnerships, policies, and practices in the region, in parallel to a showcasing of the latest in the clean fuel’s technology.

Oman will host the Oman Sustainability Week from Sunday, 28 April to Thursday, 2 May in Muscat. The event will focus on exploring investment opportunities and implementing best practices in sustainability within the energy, water, and environmental sectors.

The UAE will host The Electric Vehicle Innovation Summit from Monday, 20 May to Wednesday, 22 May in Abu Dhabi. The event will see industry leaders come together to discuss sustainable mobility and tapping into groundbreaking advancements in electric vehicles while engaging with key decision-makers.

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