Good morning, friends. After a fairly meaty issue yesterday, we have a brisk read this morning with some regional expansions and M&A updates. But first…

THE BIG CLIMATE STORY OUTSIDE THE REGION- Singapore will mandate the use of 1% sustainable aviation fuel (SAF) on all departing flights starting 2026, with a gradual increase to 3-5% of jet fuel mixes by 2030. The targeted increase would be dependent on global developments and the wider availability and adoption of SAF. To offset the projected high cost of SAF incorporation, a levy on tickets will be introduced based on the SAF target and projections on the cost of SAF at the travel time.

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

HAPPENING TODAY-

The Beyond COP28 roundtable discussions will take place today in Paris, France, marking the first major public engagement with the energy and climate communities since COP28 came to a close in December. The event will discuss how countries can deliver on the key energy and climate commitments through concrete actions and will feature a keynote by COP28 President Sultan Al Jaber and a roundtable discussion hosted by the International Energy Agency (IEA) Executive Director Fatih Birol. Global policymakers and energy industry leaders will also be in attendance, including US Special Presidential Climate Envoy John Kerry. The opening segment of the roundtable will be livestreamed on IEA’s website.

WATCH THIS SPACE-

#1- Saudi National Bank (SNB) is planning to issue an unspecified amount of USD-denominated sukuk, it said in a disclosure to Tadawul yesterday. There’s still no publicly available information about the size and terms of the potential transaction, but the sukuk will reportedly be a five-year fixed-rate sustainable senior unsecured sukuk, Reuters reports, citing a document it has seen.

What we know: The issuance will be made available for subscription to eligible investors locally and internationally through a special purpose vehicle with proceeds earmarked to support the bank’s financial and strategic objectives.

ADVISORS- SNB hired Emirates NBD, Dubai Islamic Bank (DIB), Goldman Sachs International, HSBC Bank, Mizuho International, SNB Capital and Standard Chartered Bank as joint lead managers and bookrunners on the transaction.

ICYMI- The UAE and Saudi Arabia are on track to remain the largest issuers of sovereign green bonds in the region in 2024. This will be driven by both government bodies and state-owned companies looking to meet net zero targets. Sustainable sukuk issuances are also expected to grow amid increased investor demand and efforts by Islamic finance countries to reduce carbon footprints.

#2- UK-based renewables developer Xlinks will begin construction on its interconnection project with Morocco by April, according to a document seen by Attaqa. The project will comprise a 3.8k km high-voltage direct current (HVDC) subsea cable to eventually transport 3.6 GW of renewable energy — nearly 8% of the UK’s current requirements — from a 10.5 GW solar and wind farm in Morocco’s Guelmim-Oued Noun region to Britain’s power grid in Devon. It will also include a 20 MW battery storage system.

REMEMBER- The project has regional and international backing: The Abu Dhabi National Energy Company (Taqa) invested GBP 25 mn in the Xlinks interconnection project in December, while TotalEnergies acquired a minority stake worth USD 25 mn in the project a month before.

#3- Does Egypt have an ambitious new renewables target? Egypt is now aiming to have renewables make up 60% of its energy mix by 2030, according to an Oil Ministry statement published yesterday citing Oil Minister Tarek El Molla. The news has already been picked up in the local press.

Why we’re skeptical: Last July, Egypt’s Electricity Minister Mohamed Shaker said the country was aiming to increase renewables to cover 60% of the country’s energy needs by 2040 — a whole decade later than the date given in yesterday’s statement and a target 18 percentage points above existing goals for 2030 unveiled in 2021.

#4- Chinese solar giant warns West against restricting Chinese suppliers: World’s largest solar panel maker China’s Longi Green Energy Technology — which holds a 20% share of the global market for PV modules — has cautioned that Europe and the US will risk missing their climate goals if they decide to limit Chinese imports in their renewable energy markets, the company’s vice-president Dennis She told The Financial Times. According to Dennis, cutting back on Chinese solar imports would increase the cost and slow down the deployment of solar power in the West, arguing that only players with sufficient scale like Longi were likely to survive the pitfalls of the industry.

China still maintains supply chain dominance: China dominates global solar manufacturing, accounting for more than 80% of production, FT writes. However, Western countries have voiced concerns about unfair trade practices and security risks from overdependence on China’s solar sector. Longi has set up factories in Vietnam, Malaysia, and India, and is planning to enter Saudi Arabia through a local partner.

ALSO– US to revise down EV sales targets due to high costs: The Biden administration is expected to announce a revised plan to lower previous 2030 EV sales targets and reduce the proposed yearly requirements for cutting tailpipe emission, Reuters reported citing two sources familiar with the plan. The revised plan — which could be announced next month — will address concerns raised by automakers and the United Auto Workers, who argued against the initial proposal which set a target to have EVs constitute 60% of US automarker’s new vehicle production by the end of the decade. Automakers said that EVs are still too costly for US customers — especially compared to their much cheaper Chinese alternatives — and that charging infrastructure is still nascent. EVs accounted for about 8% of sales in 2023.

DANGER ZONE-

Global interest in mining the ocean floor has peaked to levels unseen since the 1970s making it “inevitable,” Secretary General of the UN’s International Seabed Authority (ISA) Michael Lodge told CNBC ahead of the ISA’s upcoming conference. The practice is gaining traction as companies look to shore up supplies of rare earths critical to the green energy transition at price points equivalent or lower to onshore mining. The ISA conference will seek to hammer out a global accord on the practice.

Biodiversity concerns: Scientists say oceanic mining comes at the expense of a substantial impact on the environment including the destruction of natural habitats and the USD 5.5 bn tuna industry, in addition to creating sediment plumes that disrupt aquatic life and the ocean’s ability to capture and sequester CO2.

REMEMBER- Global regulations for deep-sea mining are in the works: ISA said it would begin accepting permit applications from corporations looking to launch deep-sea mining projects last July, following two weeks of negotiations on standards and requirements of the new practice. A notable sticking point in the decision is the lack of a standard mining code that would guide the ISA in its application reviewing process. The UK and 23 other countries announced support for a moratorium on deep sea mining until the environmental impact of the practice is better understood. Norway’s parliament passed the world’s first bill to allow commercial-scale deep sea mining activities last month despite environmental concerns.

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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 the Arabian 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.

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