Good morning, folks. We have a packed issue this morning with plenty of green finance updates from the UAE and Qatar, but first let’s take a look at what’s shaping the conversation abroad…

THE BIG CLIMATE STORY OUTSIDE THE REGION- A couple of stories are grabbing headlines worldwide, the first being a landmark ruling in the small island states climate case. The International Tribunal for the Law of the Sea (ITLOS) – in its first climate-related ruling – declared that GHG emissions absorbed by the ocean qualify as marine pollution, marking a significant victory for a coalition of small island states. The court mandated countries must take more stringent actions to protect marine environments than those stipulated in the Paris climate agreement. This decision supports island states in their fight against the impacts of rising sea levels.

Who was involved? The case was brought forth by nine island nations, including Antigua and Barbuda and the Bahamas. Tuvalu, Palau, Niue, Vanuatu, St. Lucia, St. Vincent and Grenadines and St. Kitts and Nevis were also part of the coalition.

How will this decision help? This ruling will bolster legal and diplomatic efforts against climate inaction as it guides climate-related policies and can be used as a legal precedent. “The ITLOS opinion will inform our future legal and diplomatic work in putting an end to inaction that has brought us to the brink of an irreversible disaster,” Antigua and Barbuda's Prime Minister Gaston Browne said.

China isn’t happy: The world's largest carbon emitter contested the tribunal's authority to issue this opinion, arguing it could lead to fragmentation of international law.

The story made headlines in the international press: Reuters | The Washington Post | The New York Times | AP

ALSO- Fossil fuel giant Shell’s shareholders approved a new energy transition plan with weaker carbon-emissions targets with nearly 80% voting in favor. A resolution urging stricter climate measures, proposed by activist shareholder group Follow This and supported by major investors like French asset management company Amundi, received only 19% of the vote. Shell's updated strategy aims for a 15-20% reduction in net carbon intensity by 2030, down from a previous 20% target, and has abandoned a 45% reduction goal by 2035. The story was picked up by Reuters, Bloomberg, and The Financial Times.

WATCH THIS SPACE-

#1- Saudi mining giant Ma’aden has extracted lithium from seawater — though not at a commercially viable rate, CEO Robert Wilt told Reuters. “We are actually producing lithium from seawater now,” Wilt, who is also vice chairman of Manara Minerals — a JV between Ma’aden and the PIF — said. He did not provide further details on the extraction process, but highlighted efforts by Aramco to extract lithium from brine in its oilfields. “We are both working parallel paths. Ma’aden on extracting lithium from seawater. Aramco from brines where lithium has higher concentration,” he said, adding that Ma’aden was currently in talks with Aramco on “how we can join forces.”

REMEMBER- Industry and Mineral Resources Minister Bandar Al Khorayef said last month that Saudi will continue to source lithium from abroad as part of its plans for the nascent EV sector as securing domestic supplies were still at an early stage. “Lithium is a very important mineral that happens to be part of a very important part of the supply chain, especially for batteries,” he told Reuters at the time. “There are some signs which are encouraging, but we need to do more,” he said on producing lithium locally.

Why does it matter? Lithium is a critical component of both modern consumer electronics and the green transition, factoring into everything from rechargeable batteries for phones and computers to electric vehicles and grid storage.

SPEAKING OF LITHIUM- UMPC plans to kick off lithium production in Argentina next year: Dubai-based United Mining Projects plans to kick off lithium production for batteries in Argentina next year, targeting an output of 5k tons by 2027 with plans to double it by 2028, CEO Bradley Pielsticker said in an interview with CNBC Arabia. The company is currently mulling extraction methods, including direct extraction and evaporation ponds, he said.

REMEMBER- UMPC is investing USD 550 mn in a lithium project in Argentina ’s Catamarca province through its subsidiary, Marhen Lithium. The project also aims to develop the lithium into value-added products, with the funds set to be disbursed over a four-year period.

#2- We have details on the UAE’s first state-owned EV charging network: UAEV — the firststate-ownedEV charging network in the UAE — is targeting to install up to 100 160 KW fast-charging units by the year’s end, and some 1k units by 2030, UAEV Chairman Sharif Al Olama told Khaleej Times. The charging units will be available at no cost this year and will be accessible in public spaces, workplaces, shopping centers, and residential areas. There are also plans to later install chargers in malls, supermarkets, and government buildings.

#3- Egypt will reveal trading and settling rules for its soon-to-be-established voluntary carbon credits market within “the next few weeks,” Chairman of the Financial Regulatory Authority (FRA) Mohamed Farid said in a press release. Once launched, the market will be the first voluntary carbon market to trade carbon emissions reduction certificates in Africa.

REMEMBER- The legislative and executive framework has already been completed: The FRA established carbon credit verification and certification standards for issuing voluntary carbon certificates in August 2023. Under the framework, the certification body must provide the regulatory authority with the objective of the project, the technologies used, and the estimated volume of emission reduction — all of which the certification body is responsible for confirming. Unregistered entities will not be permitted to carry out any verification or approval for carbon removal projects and cannot list or trade carbon certificates on the EGX.

#4- Algeria is finalizing its national energy strategy to boost renewables and green hydrogen production, according to a statement citing comments made by Algerian Minister of Energy Mohamed Arkab on the sidelines of a conference in Italy. The country aims to be a major hydrogen exporter and boost renewables capacity to 15 GW by 2035.

Here’s what we know so far: The country will implement three phases of its national strategy to boost production and competitiveness to become a global hub for green hydrogen by 2050. The three main phases include a “pilot” phase from 2023 to 2030, a “market creation” phase from 2030 to 2040, and a “competitive phase” from 2040 to 2050.

#5- Electricity costs throw Europe’s climate goals offtrack: European energy firms are cutting back on their energy transition targets due to high electricity costs and low prices, according to The Financial Times. The continent’s largest renewables producer Statkraft says its reassessing targets, Portugal’s EDP is scaling back its pledges, and the world’s largest offshore wind developer Ørsted has cut down 2030 goals by more than 10 GW after shutting down two US projects due to costs. Several other companies have followed suit, but overall, the sector is still seeing growth despite targets slowing down, FT writes.

Who’s to blame? High interest rates and slow regulatory approval are making it harder for companies to commit to energy transition targets, the news outlet explains. While some are still scaling up their plans, higher interest rates mean that finding investors has become more competitive, Emea energy transition at RBC Capital Markets Ralph Ibendahl said. With base rates at 5%, a 7-9% return is no longer attractive to investors, pushing them to invest elsewhere, he added.

#7- Let the best tech prevail: The protective measures implemented by the west will “come back to haunt” renewables’ development as it affects companies creating more advanced tech, Chinese solar manufacturer Arctech's global marketing exec Zhou Shijun told The Financial Times amid growing tensions between China, the US and Europe. Arctech, with a market cap of USD 1.9 bn, is diversifying its market focus towards the Middle East, Asia, and Latin America, steering clear of the US market.

BACKGROUND- The US bumped tariffs on Chinese goods to curb imports: The US government released a raft of tariff increases last week on USD 18 bn worth of Chinese imports that will each begin taking effect between 2024 and 2026. Solar cell tariffs doubled to 50% while EVs quadrupled to 100%, and lithium-ion EV batteries more than tripled to 25%.

DANGER ZONE-

Hydrogen production could make up over 50% of electricity demand by 2050 inefficiencies in the green fuel’s production could pose a major hurdle for producers, according to a report (pdf) published by Danfoss Impact. Efficiency in low-carbon hydrogen production will be crucial if producers are to successfully meet growing demands — which is already expected to increase by 45 GW by 2028 — given that green hydrogen currently loses 30% of its energy during its conversion process, the report says.

Danfoss comes in with recommendations: Companies could look into technology that can improve the yield such as recovering excess heat from electrolysis or switching more efficient converters for electrolyzers which could increase efficiency by 1% by 2050 — equivalent to London’s energy demands for almost four years. Cost efficiency in green hydrogen production will also be essential, especially for heavy industries which will need the most support to decarbonize at a fast pace, the Danfoss paper concludes.

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CIRCLE YOUR CALENDAR-

The UAE will host the Bonds, Loans & Sukuk Middle East event from Tuesday, 4 June to Wednesday, 5 June in Dubai. Billed as the Middle East's largest corporate and investment banking event, it serves as a key meeting point for those active in the region's capital markets. Over 1.4k governments, corporates, investors, banks, law firms, regulators and service providers as well as more than 75 expert speakers will be in attendance.

Turkey will host the International Conference on European Energy Market, from Monday, 10 June to Wednesday, 12 June in Istanbul. The three-day event will gather experts from scientific, industry, and policy sectors for discussions on various energy market-related topics. The conference covers themes including energy modeling, market design, regulatory policies, and climate change.

Morocco will host the Morocco Energy Week Summit, from Tuesday, 11 June to Thursday, 12 June in Marrakech. The event will gather Morocco's leading energy players, companies and developers alongside financiers and implementation experts to discuss the country’s green transition.

Spain will host the Connecting Green Hydrogen Europe conference, from Tuesday, 25 June to Thursday, 27 June in Madrid. The event will see around 5k attendees including industry leaders, energy ministers, and executives to explore solutions, new technologies, and transformative advancements to advance the hydrogen industry.

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