Good morning, friends. It’s a fairly quiet morning as we inch closer to the weekend, but we have some significant news emerging from the UAE that impacts the future of electric vehicles and green aviation in the region.

OVER IN COPLAND-

Past and future hosts join forces to raise emission pledges:The UAE, Azerbaijan, and Brazil — the hosts of COP28, COP29, and COP30 — have launched an initiative to drive countries to make more ambitious climate pledges, according to a statement. Dubbed the COP Presidencies Troika, the trio will work on a ‘Roadmap to Mission 1.5°C’, a plan to significantly increase the goals and implementation of the nationally determined contributions (NDCs) of all countries under the Paris Agreement. It will also focus on driving political action and directing resources towards climate finance, especially for developing countries.

WATCH THIS SPACE-

#1- Is Masdar eyeing Iberdrola’s US assets? UAE state-owned renewables developer Masdar is reportedly exploring an acquisition of Iberdrola’s onshore renewable energy assets in the US, Bloomberg reports, citing people with knowledge of the matter. Last year Masdar acquired a 49% stake in Iberdrola’s EUR 1.6 bn Baltic Eagle offshore wind farm off the coast of Germany. Masdar also signed a strategic partnership agreement with the Spanish utility firm last December to co-invest up to EUR 15 bn in exploring development projects in the offshore wind and green hydrogen in key markets including Germany, the UK, and the US.

#2- Iraq is planning an 800 ton green hydrogen plant: The Iraqi government and Iraq’s South Refineries Company will build a green hydrogen production plant with an 800 ton per annum electrolysis capacity under a build, own, operate contract, according to a statement. The oil firm will also develop the 130 MW solar energy farm that will power the green fuels facility, Iraqi Oil Minister Hayan Abdul Ghanito said in the statement. The financials and targeted launch date of the project were not disclosed.

A new renewables strategy + law is in the works:The country’s Electricity Ministry presented its renewable energy draft law to the Ministerial Council for Energy and has already sent it to the House of Representatives for approval, the oil minister said, adding that the country is also working on an energy transition strategy in parallel.

ALSO- Iraq floats its first CCUS tender: The country has issued its first carbon, capture, usage and storage (CCUS) tenders, noting the projects would be funded by carbon credits generated from a natural gas field in Baghdad with a 12 mn cubic foot capacity, the Iraqi News Agency reported.

#3- KSA’s Aramco has decided to shelve plans for oil capacity expansion on the back of an increasing emphasis on cleaner energy, Reuters reported earlier this week, citing statements by Saudi Energy Minister Prince Abdulaziz bin Salman during the International Petroleum Technology Conference in Dhahran. “I think we postponed this investment simply because.. . we’re transitioning,” he said. The state oil giant is flexible when it comes to investing in growth and can comfortably shift emphasis between oil, natural gas, petrochemicals and renewables, he said.

ICYMI- Aramco made a surprise announcement last month that it was putting on hold its expansion plan and will target a “maximum sustained production capacity” of 12 mn barrels of oil per day. That’s about 1 mn bpd below the target of 13 mn bpd by 2027 that it had set back in 2020.

#4- The global carbon market rose 2% y-o-y to hit a record USD 949 bn in 2023, Reuters reports, citing data published by the London Stock Exchange Group (LSEG). The launch and expansion of emission trading systems (ETS) across different countries drove the market growth for CO2 permits, incentivizing companies to invest in low-carbon technology to achieve their climate goals, the newswire explained. The US and EU accounted for most of the growth, with the EU alone reaching around EUR 770 bn — or 87% of the total market value.

#5- Germany sinks EUR 3.8 bn in hydrogen initiative: The German government isextending a EUR 3.5 bn (USD 3.8 bn) grant to Hintco, the company running H2 Global ’s green hydrogen purchasing program for incentivising the production and import of green hydrogen and its derivatives from abroad, according to a statement. The funding — in addition to the EUR 900 mn collected from the first round — will allow the company to go forward with their double-sided tenders, of which the first round is almost complete, the company added.

What are they doing exactly? HintCo acts as both buyer and seller in the auctions. It acquires green hydrogen or its derivatives through ten-year contracts and then redistributes these products to end-users via one-year agreements. The price discrepancy between the two contracts is compensated from HintCo’s financial reserves, Hydrogeninsight explains.

The region could be interested: A consortium comprising Adnoc, Germany’s LOHC, Jera and Uniper (which is exploring a UAE-Europe hydrogen supply chain agreement), were considering tapping into H2 Global’s green hydrogen subsidy scheme to secure capital for the project.

DANGER ZONE-

Middle East and Central Asia (MECA)-based banks are at risk of making USD 11 bn in loan losses by 2030, if swift action is not taken to step up climate action efforts, according to an IMF report (pdf) released earlier this week. The report assesses regional banking groups’ insurance capacity in mitigating climate-induced damages and losses, and forecasts approximately USD 50 bn (based on 2021 prices) in potential future credit losses across the 30 countries it surveyed in the region by 2050.

Credit ties to heavy-emitting sectors are the culprit: Banks in MECA have credit exposures due to their ties to carbon-intensive sectors including Big Oil, manufacturing, and agricultural industries, with IMF assessments indicating that future mitigation and decarbonization measures (proxied by a one-time increase in the carbon price) could result in bank capital losses ranging from USD 70 bn to USD 140 bn by 2050.

The IMF triples the region’s climate financing needs to USD 3 tn: The IMF is tripling MECA’s climate adaptation and mitigation capital requirements from previous estimates of USD 1 tn toUSD 3.1 tn, with Egypt, Iran, Iraq, Morocco, and the UAE accounting for most of the total expressed financial needs in MENA.

Recommendations for governments + banks:On a national level the IMF urges governments to prioritize adequate carbon pricing policies, and slash fossil-fuel linked energy subsidies which amounted to USD 336 bn in 2022 in MENA alone. Banking groups across the region need to enhance capacity building on climate mitigation, create instruments and buffers to anticipate risks through policy making, and work to strengthen the role of the ins. sector to mitigate such risk if climate issues are not addressed.

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CIRCLE YOUR CALENDAR-

Egypt will host the Egypt Energy Show from Monday, 19 February to Wednesday, 21 February in Cairo. The event will gather 35k energy industry professionals and host over 80 conferences on energy transition and sustainable production.

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.