Good morning, folks. We have a lot of ground to cover this morning with a bit of everything from M&A updates to wind energy to carbon markets. First, a quick update on the climate change-fueled hurricane still dominating headlines state-side…

THE BIG CLIMATE STORY OUTSIDE THE REGION- Hurricane Milton continues to dominate the headlines: Hurricane Milton’s heavy rains caused overflows at a Riverview plant owned by the US largest fertilizer producer Mosaic, with over 17.5k gallons of water containing toxic byproduct phosphogypsum possibly entering Tampa Bay. The company said it has since contained the issue, but floodwaters remain a significant hazard. Record rainfall also triggered sewage overflows across the state, including a 2 mn-gallon spill at a water treatment plant in Leesburg. Health officials warn of bacteria-laden floodwaters, which can cause gastrointestinal illness and severe skin infections

“Ticking time bombs”: The state of Florida is home to one bn tons of radioactive phosphogypsum waste stored in 25 locations throughout the state, including several spots near the coast and sources of clean water, which raises the alarm on potential long-term health impacts. “These are ticking time bombs … placing vulnerable sites so close on major waterways that are at risk of damage from storms is a recipe for disaster,” attorney Ragan Whitlock from the Center for Biological Diversity told AP.

Long-term health impacts of hurricanes like Milton extend beyond immediate damage: “We find elevated mortality rates that extend far beyond the immediate aftermath and can persist for up to 15 years,” Rachel Young, an environmental economist at the University of California, Berkeley, said to ABC. These “indirect deaths,” ranging from 7k to 11k per storm, are linked to factors such as socioeconomics, infectious diseases, and exacerbated chronic conditions like heart disease and mental stress, and must be accounted for when determining response to natural disasters.

The story made headlines in the international press over the weekend: Reuters | The Associated Press | Bloomberg | ABC | Newsweek

HAPPENING THIS WEEK-

Cairo Water Week kicked off yesterday and will run through to Thursday in Egypt. The event will explore the connection between water and climate and their impact on resilience in communities and will focus on investment in crisis management and intervention, and early warning systems for floods and droughts to ensure equitable access to clean and safe water.

WATCH THIS SPACE-

#1- ACX is pulling out of the region: Singapore’s AirCarbon Exchange (ACX) is shutting down its Abu Dhabi operations after just one year of trading, Bloomberg reported on Friday. The exchange, which allowed investors and companies to buy carbon credits to improve their environmental credentials, will shift its clearing functions to Singapore, where the company’s headquarters is based. ACX launched its carbon market – then hailed as the “ world’s first regulated carbon exchange and clearing house ” – in October last year on the Abu Dhabi Global Market (ADGM) with backing from the state-owned Mubadala Investment Company

Behind the closure: Demand for carbon credits has been muted, partly due to the lack of mandatory emission offset requirements in the Middle East and global allegations of greenwashing, the outlet adds. The voluntary carbon market in the region has also faced challenges, including competition from Saudi Arabia’s voluntary carbon market and a pilot program by Dubai Financial Market.

IN OTHER CARBON MARKETS NEWS- UN experts agree on carbon trading framework: A UN expert group has agreed on a framework for a standardized global carbon trading system, aiming to resolve nearly a decade-long discussions on the climate finance tool, The Financial Times reported on Friday. The 12-member group, including representatives from the EU and Saudi Arabia, went beyond their formal mandate to attempt to establish standards, reports FT. This framework, if formalized at COP29 in Baku next month, would allow governments to trade instruments representing one ton of carbon dioxide “removed or saved” and potentially provide funding sources for climate adaptation and green transition efforts.

There’s still a bit of work to do: Concerns remain about the clarity and integrity of the agreed recommendations, with some experts warning that the provisions for monitoring credits are insufficient, adds the FT citing different experts. The framework also faces potential challenges at COP29, where countries could override the UN body’s decision. Ongoing tensions also include agreeing on the types of carbon removal and reduction allowed and the risk of oil-producing nations avoiding their responsibilities amid calls to de-phase fuel and reduce their emissions footprint.

#2- Egypt secures EUR 7 mn from the EU for green transition: Egypt’s Planning and International Cooperation Minister Rania Al Mashat and EU Ambassador to Cairo Christian Berger signed a EUR 7 mn comprehensive technical support package to support Egypt’s green transition— dubbed the European Green Facility initiative — according to a statement.

Who’s getting the funds? The money will be distributed among the ministries of irrigation, agriculture, and housing to support water sustainability and the country’s green transition.

IN OTHER EGYPT UPDATES- Egypt will reportedly launch trial operations of the first phase of its USD 1.8 bn Egypt-Saudi interconnection project in April 2025 instead of May, Asharq Business reported on Thursday, citing an unnamed government source. The first phase of the project — which will see 1.5 GW of the planned 3 GW come online — is set to be completed by June instead of July 2025.

ALSO- The first made-in-Egypt EV battery is around the corner: The Arab Organization for Industrialization (AOI) is close to producing batteries for electric vehicles, Al Borsa writes, citing the chairman of AOI’s Kader Factory Amr Abdel Aziz.

The details: Last year, AOI signed a cooperation protocol with auto batteries manufacturer Chloride Egypt and e-mobility firm BluEV to set up a factory to produce lithium-ion batteries and electric propulsion systems for light EVs. Abdel Aziz said that the partnership between the AOI, the Electronics Research Institute, and design and engineering firm RFBox has successfully produced an integrated center to assemble and produce lithium batteries for light EVs in the Kader Factory.

#3- Iraq seeking IFC support for blue ammonia project: Iraq is set to begin talks with the International Finance Corporation to discuss funding for its first blue ammonia project and other projects, including sustainable forests, waste-to-energy projects, Chairman of Iraq’s National Investment Commission Haidar Makieh said, Zawya reported last week. The project comes under a government strategy that seeks to enhance Iraq’s climate efforts to meet global standards and will be launched within the next two months.

2024 marks Iraq’s first moves on hydrogen: The Iraqi government and Iraq’s South Refineries Company announced plans earlier this year to build their first green hydrogen production plant with an 800 ton per annum electrolysis capacity under a build, own, operate contract. The financials and targeted launch date of the project were not disclosed.

#4- Turkey aims to add at least 2 GW of renewable energy capacity each year until 2035, Bloomberg reported last week, citing government officials with knowledge of the matter. Auctions for designated renewable energy zones, known as YEKA, are set to resume next year with a reformed process and a new strategy set to be announced later in October, Turkey’s Energy Minister reportedly said last week. The country’s National Energy Plan targets total annual additions of 3.1 GW in solar and 1.4 GW in wind power through 2035.

What is YEKA? The Renewable Energy Resources Area (YEKA) is a subsidy scheme – introduced by the government in 2016 – that provides renewable energy generation permits through competitive tenders. Major YEKA auctions for solar and wind were awarded in 2017, with additional auctions held between 2019 and 2022.

The nation wants to encourage progress on unused permits: Regulators have faced challenges for unutilized YEKA tenders, with some permit recipients not putting them to use. The program is credited with significantly boosting renewable energy’s share in Turkey’s electricity mix, reaching 42.3% in 2020. Turkey-based Limak Renewable Energy’s Erzin-1 solar power plant – launched in September and generating 60 MW worth of electricity in its first phase– is part of the YEKA scheme and is set to become Turkey’s second-largest PV facility.

COP WATCH-

KSA launches first-ever “green zone” at COP 16 to combat desertification: Saudi Arabia – the host of COP 16 to the UN Convention to Combat Desertification (UNCCD) in Riyadh this December – is launching what is dubbed the first-ever “green zone” ahead of the gathering later this year, Asharq Al-Awsat reported on Friday. Spanning 130k sq meters, the Saudi government is involving organizations and private sector companies focused on combating desertification and showcasing technological and innovative solutions to prevent land degradation through best practices in sustainable mining, land restoration, drought management, and water conservation.

EU recommits to USD 100 bn annual climate finance goal until 2025: The European Council reiterated its commitment to developed countries’ goal of mobilizing an annual USD 100 bn to finance green projects in developing countries through 2025, according to a statement released last week. However, the announcement did not include the bloc’s plans for post-2025 climate finance commitment.

Expect more details later this month before COP29: The council said that it would announce its “the general mandate for the EU’s negotiators at the COP29” by the end of October, which is expected to reveal the EU’s approach to the post-2025 climate finance commitment. We will also know how much the regional block had contributed in 2023.

REFRESHER- COP29 is set to see tough negotiations about post-2025 climate finances pledges. Developing countries need nearly USD 500 bn in financing annually to reach climate goals, with as much as USD 6.9 tn needed by 2030. Arab nations are supporting a proposal that calls for developed countries to provide USD 441 bn in grants annually, aiming for a total of USD 1.1 tn from all sources, including private finance. Another proposal, favored by the EU, sets a broader funding target of over USD 1 tn annually that leaves room for funding sources to come from domestic investments and private funding.

Over 100 CEOs come together to advocate for green investment while others back out of COP29: 112 business leaders around the world from the Alliance of CEO Climate Leaders — including companies like Majid Al Futtaim Holding, Ikea, AstraZeneca, and Volco executives — have come together to make a case for mobilizing green investment in an open letter ahead of COP29, the Financial Times reported on Thursday. The letter comes at a time when several other executives — including those from Bank of America and BlackRock — have chosen to opt out of the conference or scale back previous climate commitments.

Several requests were made: CEO of Ikea operator Ingka Group Jesper Brodin called for policymakers to provide more support to ramp up green investment and “remove some of the obstacles” facing industries and companies to make the needed transitions, making the case for for improved carbon pricing, more efficient carbon markets, and the elimination of fossil fuels subsidies. Others also highlighted financial needs and regulatory obstacles, such as permit delays and a general lack of comprehensive regulatory support.

DANGER ZONE-

We’re not doing enough on emissions: Current efforts to remove CO2 from the atmosphere will not be enough to prevent a climate change disaster with global temperatures approaching the critical 1.5°C threshold, scientists warned in research published last week in Nature. Even a “temporary overshoot” of this target – which the research says is inevitable under current efforts – will lead to irreversible, lasting climate impacts, such as more extreme weather events, ecosystem destruction, rising sea levels, and shifting ocean currents.

Reducing temperatures after an overshoot won’t undo the damage: “Even if you’ve brought temperatures back down again, the world we will be looking at will not be the same,” Carl-Friedrich Schleussner, co-author from Austria’s International Institute of Applied Systems Analysis, told Reuters.

Every degree matters: The risk of crossing irreversible climate tipping points, like the collapse of the Greenland ice sheet, grows with every increment above 1.5°C. Cutting emissions immediately is the only viable solution to prevent irreversible damage, the research contends.

THE SCORECARD-

PIF allocates green bond proceeds to projects: Of the USD 8.5 bn it raised through its two green bond issuances, the Public Investment Fund (PIF) has allocated USD 5.2 bn to projects as of this past June, according to its Allocation and Impact Report 2024 (pdf). This is part of a capital expenditure portfolio, worth over USD 19.4 bn, of eligible green projects identified by the fund. CNBC also had the story.

The portfolio includes 91 projects, 18 of which are operational or partially operational, while the remaining 73 are under construction or in design.

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CIRCLE YOUR CALENDAR-

Egypt will host the World Urban Forum from Monday, 4 November to Friday, 8 November in Cairo. The forum, established by the UN and one of its largest non-legislative events, will center around the effect of rapid urbanization on communities, economies, climate change, and policies and will bring together government representatives, academics, business people, urban planners, and more.

South Africa will host the Critical Mineral Africa Summit from Wednesday, 6 November to Thursday, 7 November in Cape Town. The summit aims to attract critical minerals investment to the continent and will be held alongside African Energy Week. The summit will be held in partnership with the Southern African-German Chamber of Commerce Partners representing Germany’s increasing investments in southern Africa.

Azerbaijan will host the United Nations Climate Change Conference or Conference of the Parties (COP29) from Monday, 11 November to Friday, 22 November in Baku. The annual conference brings together governments, world leaders, and other stakeholders to advance the Paris Agreement and negotiate ways to fight climate change. The United Nations Framework Convention on Climate Change’s objective is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”.

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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