TODAY: Masdar reaches financial close on Baltic Eagle acquisition

Good morning, nice people. It’s a busy morning on the regional climate industry landscape with lots to dive into from green finance updates to key M&A moves and a sprinkling of solar energy developments from Algeria. Shall we?

BEFORE WE DIVE IN- Don’t miss Enterprise UAE’s chat with Steve Lutes, vice president of Middle East affairs at the US Chamber of Commerce this morning. Lutes covered a lot of ground including the UAE’s potential, especially in the energy transition and energy security sectors, in terms of investment and trade in a post-COP28 era.

HAPPENING TODAY-

The S&P Global’s CERAWeek is kicking off across the pond in Houston, Texas today and will run through to Friday. Expect an appearance from Adnoc CEO, Industry and Advanced Technology Minister, and UAE Special Envoy for Climate Change Sultan Ahmed Al Jaber along with the chiefs of ExxonMobil and BP and the who’s who of senior US and international policymakers, global energy and services executives, leaders of national oil companies.

Why is this important to us? This year’s big themes include the outlook for energy markets, policy and geopolitics, net-zero supply chains, the green transition in power markets, paying for the transition to greener energy, and climate and sustainability. Check out the full agenda here and the live stream here.

COP WATCH-

COP29 host Azerbaijan plans to increase its current emissions reduction target but will miss the net zero by 2050 benchmark, Reuters reported on Thursday, citing comments made by COP29’s incoming president Mukhtar Babayev to The Financial Times in an interview. The oil and gas producer has set its target to reduce greenhouse gas emissions to 35% by 2030 and 40% by 2050 compared to its 1990 levels — far from the global net zero by 2050 standard. Babayev’s comment comes after head of the UN’s climate arm Simon Stiell urged countries to strengthen their emissions reduction targets and increase climate finance commitments.

“Every COP from now on is a finance COP,” COP26 high-level champion Nigel Topping told The Financial Times Climate Capital Live audience on Thursday. Despite criticism about business leaders joining the talks, the consensus amongst experts is that COP29 will have to prioritize funding as a means to address climate change, Marshall Islands climate envoy Tina Stege told the audience, adding that there is no other way for developing country to realistically meet their nationally determined contributions (NDCs). “NDCs are nice, but you can’t invest in an NDC,” Topping reiterated.

WATCH THIS SPACE-

#1- One step closer to IMEC: India’s cabinet has approved an Inter-Governmental Framework Agreement (IGFA) inked with the UAE in February to enable the India-Middle East Europe Economic Corridor (IMEC) — a planned trade route described as the “green and digital bridge across continents and civilisations,” Wam reported last week. “The IGFA includes areas of cooperation between the two countries with the objective of exploring further potential of future joint investment and collaboration in respect of development of the IMEC,” India’s cabinet said in a statement following its approval. The US-led IMEC initiative was unveiled at the G20 talks in New Delhi in September by signatories including Saudi Arabia, the UAE, the EU, India, and the US, as part of the latter’s plan to counter China’s Belt and Road project.

Lots of gains for the global green sector: The corridor — which will include railway and subsea pipeline infrastructure — will facilitate trade of green fuels and renewable energy to and from the GCC with an east corridor connecting India to the GCC and a northern corridor linking the Gulf with Europe. The participating countries will also lay cables for power and data lines along the railway route, as well as pipelines for moving clean hydrogen. France appointed former CEO of Engie Gérard Mestrallet — who was commissioned by France’s Ecology, Sustainable Development Ministry to chair an advisory committee on the EU’s carbon pricing market — as the country’s special envoy last month.

#2- Morocco anticipates a 5% GDP increase and the creation of 400k new jobs as a result of the newly launched Morocco Offer, a six-stage framework geared towards attracting green hydrogen investments to the kingdom, Morocco World News reported last week, citing comments by Morocco’s Minister of Energy Transition Leila Benali. The nation’s head of government Aziz Akhannouch has expressed optimism about the updated energy policy which could bring in some USD 10 bn in investments.

REFRESHER- About the Moroccan Offer: The framework aims to guide investors on how to fund a range of projects in the green energy sector including renewables, green hydrogen and ammonia, and green fuels such as green methanol and synthetic fuels, both for local use and export purposes. The framework outlines the necessary procedures for the application process, land allocation procedures, infrastructure details and requirements as well as the incentives available for investors, the selection process and contractual obligations, and governance details for the green hydrogen sector.

#3- Iran is set to construct two nuclear plants within seven years, Tehran Times reported last week, citing comments by Mohammad Eslami, the head of Iran’s Atomic Energy Organization (AEOI). Neither the size of the plants nor their cost have been revealed.

Iran is going all in on nuclear power: The nation broke ground on four nuclear power plants in the southern part of the country with a combined capacity of 5 GW last month. The plants, located in the east coast port town of Sirik, are expected to cost about USD 20 bn and will require 35 tons of nuclear fuel annually. The AEOI also kicked off construction on the second reactor of its EUR 1.8 bn Bushehr nuclear power plant in October.

#4- Shell decides to water down its emissions goals: Despite maintaining its net-zero by 2050 target,Dutch fossil fuel giant Shell is now aiming to reduce its scope 3 emissions — indirect emissions from the use of its products up and down the value chain representing 70% of a company’s carbon footprint — by 15-20% by the end of the decade, down from the previous 20%, according to the Shell Energy Transition Strategy 2024 (pdf) published on Thursday. The company also dropped its goal of a 45% reduction by 2035 citing “uncertainty in the pace of change in the energy transition.” The targets are measured against Shell’s baseline of emissions in 2016, the report says.

We knew this was coming: The strategy — which is updated every three years — was predicted to see the company allocate a greater portion of investments into oil and gas in order to give better returns to shareholders, a move which CEO Wael Sawan has been championing since he assumed the position early last year. Shell is following in British oil giant BP’s footsteps, which walked away from its target to reduce emissions by 35% by 2030 last year, and said it would pump more oil and gas and produce more CO2 emissions this decade than previously planned.

And it’s raising concerns: The strategy update has sparked concern among climate activists due to a significant 20-year gap in its net-zero emissions road map, Bloomberg wrote. Activists and shareholder groups are now questioning the feasibility of Shell’s long-term environmental strategy, emphasizing the need for clearer interim targets to ensure a sustainable and responsible energy transition. “For investors, not having that clarity of what that pathway looks like now from 2030 to 2050 should be raising quite a lot of concerns,” said the Australasian Centre for Corporate Responsibility strategy lead Nick Spooner

#5- IEA raises predicted oil demand for the fourth time: The International Energy Agency (IEA) has increased its forecast for 2024 oil demand growth up to 1.3 mn barrels per day (bpd) — up from 1.22 mn bpd — a few days after oil producing organization OPEC predicted a much higher growth in oil demand in the same period, Reuters reported on Friday. IEA cited disruptions to Red Sea shipping due to Houthi attacks as the reason for its adjustment, which still remains less optimistic than the world’s biggest oil producing organization OPEC, who kept its 2024 demand growth forecast at 2.25 mn bpd. The gap now stands at almost 1 mn bpd, equivalent to 1% of world demand.

REMEMBER- The gap between OPEC and IEA’s projected yearly oil demand are the largest on record:IEA predicted that demand will rise by 1.22 mn bpd in 2024, while in OPEC’s report they expected oil demand to increase by 2.25 mn bpd in the same period marking the biggest gap in forecasts between the two groups in the 16 years they have been publishing monthly reports.

#6- New EU rules on plastic packaging could penalize poorer countries exporting to the EU, increase the risk of legal challenges, and lead to trade retaliation, Bloomberg reported on Thursday, citing an emailed statement from EU’s trade chief Valdis Dombrovskis. While the rules — pending approval from the parliament and council — aim to reduce packaging waste and promote the use of recycled plastic, the need for careful consideration and proper impact assessment of such significant changes, Dombrovskis added.

REMEMBER- A provisional agreement for a new law banning single-use plastic and reducing packaging waste was reached earlier this month. The agreement will see packaging phased out with reduction targets set at 5% by 2030, 10% by 2035, and 15% by 2040. It will also mandate that nations in the bloc cut plastic packaging specifically. Packaging has become an escalating source of waste in the EU, increasing from 66 mn tons in 2009 to 84 mn tons in 2021.

DANGER ZONE-

#1- There are more chemicals in plastics than we previously thought: There are at least 3k more chemicals in plastics (used for everything from food packaging to toys) than previous studies estimated, according to a new report (pdf) by the Norwegian Research Council project PlastChem. The new research identified over 16k chemicals, a quarter of which are believed to be hazardous, compared to the 13k found in a report (pdf) by the United Nations Environment Programme (UNEP).

Chemicals in plastic pose a serious health risk: “We’re finding hundreds if not thousands of plastic chemicals in people now and some of them have been linked to adverse health outcomes,” co-author of the report and managing director of the Swiss nonprofit Food Packaging Forum Jane Muncke told Reuters. Plastic chemicals can leach into water and food and cause complications including fertility issues and cardiovascular disease.

Policymakers are working on tackling plastic pollution: While the plastics industry advocates for recycling and re-use, experts argue that addressing plastic waste alone isn’t sufficient to safeguard public health. Greater transparency is needed regarding the chemicals used in plastics (including recycled materials) given that a quarter of chemicals in plastic lack basic information about their chemical identity. Negotiations by the UN to establish the world’s first treaty aimed at reducing plastic pollution are still ongoing, with about 400 mn tons of plastic waste produced every year, Reuters writes.

#2- Over 230 of some 1k companies that joined the Business Ambition for 1.5 °Ccampaign have failed to submit sufficient climate targets and have been removed, The Financial Times reported on Friday.The campaign — launched by the standard-setting body Science Based Targets initiative (SBTi) in 2021 to provide a check on whether companies are in line with a global goal to limit warming to 1.5 °C above pre-industrial levels — gave companies two years to submit net zero emissions targets and has since removed around 500 companies from their approval process, including Microsoft, Unilever, Adani Green Energy, for not meeting standards.

The companies axed from the database are shifting the blame: The companies that did submit adequate targets argued that a lack of supporting policy frameworks make it difficult to meet emissions reductions targets as fast as planned, the news outlet said. Of the companies removed for not submitting a net zero target in the first place, 21% chalked it up to the difficulty of curbing scope 3 emissions which account for the largest portion of their carbon footprint. Meanwhile, other companies pointed their fingers at the SBTi for making their criteria “too abstract” and “too far in the future.”

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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.