TODAY: UAE gets new decarbonization finance, tech platform

Good morning, nice people. The news cycle is giving us a brief respite this morning, but we still have details rolling in on British PM Keir Starmer’s trip to the Gulf this week and a new decarbonization finance and tech platform launching out of Abu Dhabi. First, a big development on the wind business front…

THE BIG CLIMATE STORY OUTSIDE THE REGION- BP + Japan’s Jera form a new JV: British oil giant BP and Japan’s biggest power producer Jera will combine their offshore wind businesses to form a new JV called Jera Nex bp in a GPB 4.5 bn agreement. The JV will boast a 13 GW total potential net generating capacity — including 1 GW of Jera’s operating assets and BP’s vast pipeline — making it one of the world’s top five offshore wind producers. The new venture will focus on existing projects in North-West Europe, Australia, and Japan before studying further expansion. Both parties have allocated USD 5.8 bn in financing for the JV by the end of the decade, with USD 3.25 bn channeling in from BP and USD 2.55 bn from Jera.

Against all odds: BP’s new CEO expressed his intention to slow down large low-carbon investments “not expected to be profitable for years,” but this partnership “will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders,” BP CEO Murray Auchincloss said. The company was considering selling a minority stake in its offshore wind business. It also said it was planning to sell its US onshore wind energy business BP Wind Energy and shift focus to developing utility-scale onshore renewable energy and solar power globally through Lightsource BP.

The story made headlines in the international press: Reuters | Financial Times | Bloomberg | Wall Street Journal | The Guardian

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WATCH THIS SPACE-

#1- The EU’s new ESG reporting requirements have challenges that make “absolutely no sense” for companies like QatarEnergy, CEO Saad Al-Kaabi said at the Doha Forum, Bloomberg reports. Al-Kaabi lambasted portions of the directive that make companies responsible for the three tiers of emissions and the possible penalties of up to 5% of a company’s global revenues. While the directive’s goals are commendable, he said the implementation process must be more pragmatic and address compliance costs and complexities to avoid disrupting the energy supply chain.

What is in the directive? The ESG directive — which came into effect this year — requires large firms operating in the EU to adhere to strict ESG reporting standards, mainly aiming to address climate issues and human rights like child labor. Companies making more than EUR 450 mn in the bloc are liable to the directive, Bloomberg writes.

The ESG standards were under scrutiny from local players, too: European businesses — including major firms like Unilever and TotalEnergies — have pushed back against the stringent ESG regulations, arguing that these rules put them at a competitive disadvantage compared to their US counterparts, Bloomberg reported back in September. TotalEnergies CEO Patrick Pouyanne highlighted the disparity in stock performance between his company and Exxon Mobil, attributing it mainly to the differing ESG requirements in Europe and the US. The European Round Table for Industry — representing companies with combined annual sales of EUR 2 tn — warned that overly stringent regulations are accelerating the loss of competitiveness and driving businesses to consider relocating outside Europe.

#2- UAE is working on regulatory framework for producers’ responsibility across product lifecycle: The UAE’s Ministry of Climate Change and Environment is set to launch a framework

dubbed “Extended Producer Responsibility” (EPR), which will assign producers responsibility for managing their product’s environmental impact throughout its lifecycle — from production to “post-consumer waste management,” Wam reports. This approach is designed to ensure that producers take ownership of the environmental impacts of their products and foster public-private partnerships to develop innovative waste management solutions.

Uhh, what’s EPR? Extended Producer Responsibility (EPR) is a policy approach that assigns producers responsible for managing their products’ impacts until the post-consumer or post-use point in a product’s lifecycle. This can include both financial and operational duties, such as providing funding and services to manage products after their use phase. EPR programs often require producers to join a collective producer responsibility organization (PRO) that becomes responsible for developing and managing the producer responsibility plan.

MARKET WATCH-

Copper value is set to see a further drop in 2025 ahead of anticipated US trade tariffs and economic instability in China, Bloomberg reports, citing Citigroup analysts. The metal — which has lost about a fifth of its value since last May — is expected to average USD 8.75k per ton in 2025, short of the previously forecasted USD 10.25k. Weakening policy support to the manufacturing sector, as in the case of EVs, and restrictive monetary environments in developed economies are expected to hold back a copper sector recovery, Citigroup analysts wrote in a note.

The outlook: Next year will see a “balanced refined-copper market,” the analysts forecasted, on the back of flat consumption and increased usage for decarbonization. In 2026, the prices may rise to USD 10k as monetary restrictions are eased, allowing global copper manufacturing activity to pick up. Other metals like aluminum and zinc also had their 2025 forecasts cut by 4% to USD 2.64k and 5% to USD 2.8k, respectively.

DANGER ZONE-

The Arctic could see its first icefree day before 2030: The Arctic Ocean may experience its first icefree day before 2030, much sooner than anticipated and especially in the case of warmer springs, according to a new study (pdf) published in Nature Journal. The northern polar area has consistently had 50% less ice cover during late summers since the 1980s, according to the Financial Times. The previous record minimum of sea ice cover happened in 2012, when the ice shrank to 3.4 mn sqkm, about half the 1981-2010 average. The fastest sea ice loss simulations are unlikely, but they remain a possibility, similar to rare thousand-year flood events.

What does “icefree” mean? The Arctic is considered icefree when its waters have less than one mn sqkm of sea ice, with the remaining ice primarily located north of Greenland and the Canadian archipelago.

How bad is it? The study’s authors warn that sea ice loss can further accelerate climate change through a feedback loop triggered by the diminishing Albedo effect, leaving the darker ocean surface to absorb more heat without reflective ice. The melting of sea ice cover may also trigger more extreme weather events in the mid-latitudes, whereas some species are being forced onto land due to the lack of sea ice for hunting, and others are moving further north into previously uninhabitable waters.

ICYMI- Antarctica is also in the danger zone: The southern polar area’s sea ice is also set for a record winter low for the second consecutive year, continuing a decline in the Southern Ocean’s frozen stretch. The sea ice cover around Antarctica plummeted for six months last year, ending the winter with about 1.6 mn sq km less ice than the long-term average. This year, the ice levels are even lower than last year’s on the same date, indicating a significant shift in the Antarctic system.

THE SCORECARD-

2024 will be the hottest year on record: This year is set to be the warmest on record, according to the EU’s Copernicus Climate Change Service. Data from January to November confirmed that 2024 will be the hottest year since records began, surpassing the previous record set in 2023. While 2024 would break the record, the trend is carried over from last year, with 16 out of the previous 17 consecutive months scoring global-average surface air temperatures exceeding 1.5C above pre-industrial levels. Sea surface temperatures (SST) for November 2024 were also the second-highest on record, and the Antarctic sea ice extent was the lowest on record for the month, at 10% below average, which is also the third lowest on record.

The consequences: The rapid pace of climate change in the polar regions — which a 2022 study showed have been warming four times faster than the rest of the planet — poses significant threats to ecosystems, infrastructure, and livelihoods, Imperial College London’s senior lecturer Friederike Otto told Reuters. Even if 2025 is slightly cooler due to La Nina, high temperatures will still result in dangerous heatwaves, droughts, wildfires, and tropical cyclones, Otto added.

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CIRCLE YOUR CALENDAR-

The UAE will host the World Energy Summit from Tuesday, 14 January to Thursday, 16 January in Abu Dhabi. The summit will host over 350 speakers including energy industry leaders and policymakers with discussions ranging from eco-waste to sustainable cities. An exhibition will also be held for showcasing green products.

Saudi Arabia will host the Future Minerals Forum from Tuesday, 14 January to Thursday, 16 January in Riyadh. The forum will gather stakeholders from over 170 countries to discuss mineral technology and exploration. Speakers will include senior government officials and CEOs from renowned mining companies Vale, Rio Tinto, and Manara.

Bahrain will host the Sustainability Forum Middle East from Tuesday, 28 January to Wednesday, 29 January in Manama. Climate experts and decision-makers will convene to discuss a number of issues ranging from decarbonization to supporting SMEs on their path to net zero. Speakers will include GCC government officials and industry leaders from the banking and industrial sectors.

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