International consortium led by South Korea’s Posco awarded USD 6.7 bn green hydrogen project in Oman

Good morning, wonderful people. We have a busy morning of climate news from all around the region and beyond to delve into, so let’s jump right in.

THE BIG CLIMATE STORY- An international consortium led by South Korea’s steelmaking company Posco Group has reportedly netted a contract for a USD 6.7 bn green hydrogen plant in Oman’s Duqm. The consortium consists of six companies including four Korean firms and French energy firm Engie.

^^ We have the details on this story and much more in the news well, below.

HAPPENING TODAY- The France-Saudi Arabia Investment Forum will kick off in Paris today bringing together Saudi and French government officials and private sector companies to discuss major investment opportunities in tourism, tech ecosystem, and the energy transition. The forum will feature a panel discussion on the clean energy transition with Saudi Energy Minister Sami AlSaadan, chairperson of French giant utility company EDF International Beatrice Buffon, and Vice President of French multinational supplier of industrial gasses Air Liquide Olivier Randet.

THE BIG CLIMATE STORY OUTSIDE THE REGION- It’s a yes for Switzerland’s climate law: Switzerland’s adherence to curbing its carbon emissions by 2050 was put to the test in a national referendum which saw voters passing a climate law with a majority of 58%. Around 42% of the voters voted against the law despite a growing popularity of green parties in the last federal election. The law, which was amended after it was rejected in 2021 on grounds that it was too expensive, has been stirring controversy by critics in recent weeks. It introduces measures to slash energy consumption and financial assistance to those who replace their oil, gas or electric heating among others. Supporters say the law was the minimum that rich countries are required to do to prove commitment to the fight against climate change, which opponents from the right wing argue that it would compromise energy security.

The vote grabbed headlines in the international press: Reuters | Bloomberg | The Financial Times | The Associated Press | AFP

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OVER IN COPLAND- A discouraging note ahead of COP28? A two-week preparatory meeting for COP28 at Bonn ended with diplomats making progress on setting an agenda but failing to take robust climate action, delegates told Bloomberg on Thursday. The outcome of the talks, which saw countries only able to agree on an agenda on the second-to-last day, saw a notable omission of the “mitigation work program.” The program would have opened talks on how to accelerate emission cuts and raise funds to help developing countries deploy clean energy, but it faced a pushback from a group of countries that included China, India, and Saudi Arabia. The group made their approval conditional on having the agenda include increasing funding from wealthy nations to help developing countries achieve these goals. Such divergent views have raised concerns that carbon emission cuts and bolstered financing for developing countries will fail to gain traction at COP28 later this year.

Disappointment everywhere: The head of the UN’s Climate Body has expressed dissatisfaction with the outcomes at Bonn, Reuters reported on Friday. “Never satisfied. In terms of whether reasonable progress was made. Yes. Was it enough? We will know as we enter the COP28 itself,” the UN Framework Convention on Climate Change (UNFCCC) Executive Secretary Simon Stiell told Reuters. When asked whether a fossil fuel phaseout or phasedown would be included on the COP28 agenda, he said that the UAE’s presidency was still drafting its vision, and that he expects to hear more in the coming weeks. “Science tells us that what is required in order to reach zero requires phasing out and down of all fossil fuels. We'll see what signals are presented. But the science is very clear,” Stiell added.

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WATCH THIS SPACE #1- Masdar-led consortium will pick a consultant for 10 GW Egypt wind farm by next month: The UAE’s Masdar, Infinity Power, and Hassan Allam Utilities are in talks with four unnamed consulting firms — one British, one Canadian, one French, and one American — to advise on their planned USD 10 bn 10 GW wind farm in Egypt, Al Borsa reported on Saturday, referencing an interview with Infinity General Manager Hesham El Gamal. The consortium plans to sign contracts with the consultant within the next month, Gamal said, adding that they aim to complete feasibility studies and reach financial close on the project within 12 months. The first phase of the project will generate 2 GW of clean energy, according to Gamal, who noted that the infrastructure for the project’s completion is already in place and that all that’s left for the project to become operational is the deployment of wind turbines and establishing connections to the electricity grid.

FURTHER AFIELD- Masdar set to tap Indonesia’s renewable energy potential? UAE renewables giant Masdar has shown interest in exploring clean energy investments in Indonesia’s future capital Nusantara, the Indonesian news agency Antara reported on Thursday, citing statements by the new capital’s officials. The IKN Authority’s Director of Funding said the authority received a letter of intent from Masdar following a recent visit by the company to the development site, without providing further details on the plan. However, Masdar is interested in the “development of clean energy in IKN in a mutually beneficial business scheme," according to statements by Masdar Director of Development Dony Suryaman.

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WATCH THIS SPACE #2- Taqa Morocco is aiming big on renewables: Taqa Morocco — a subsidiary of Abu Dhabi National Energy Company (Taqa) — is planning wind and solar projects with a combined production capacity of 1 GW by 2030, its CEO Abdelmajid Iraqui Houssaini told Bloomberg on Wednesday. The plans involve generating 900 MW of electricity from wind and 100 MW from solar, he said. The company is also considering investments in desalination projects in the country, he added. “We look to leverage our group expertise and supply chains to be one of the most competitive developers of water … since we are already in renewables it makes sense for the company to go there,” Houssaini said.

We know something was in the works: Taqa Morocco said earlier this year that it plans to invest USD 1.6 bn in renewable energy projects by 2030 under an ambitious plan to diversify its activities in renewable energy, green hydrogen, and seawater desalination. It recently launched Taqa Morocco Green, a new subsidiary which will manage the company’s solar projects and produce green hydrogen.

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WATCH THIS SPACE #3- Egypt close to unveiling its low-carbon hydrogen strategy? Egypt is “in the process of putting final touches” on its low-carbon hydrogen strategy, Oil Minister Tarek El Molla said last week on the sidelines of the British-Egyptian Business Association trade mission in London. He said the strategy would include a governance structure in line with the best global practices to help lure in more investments in Egypt’s green hydrogen sector. El Molla also said that the green hydrogen incentives, approved by the Cabinet in May under efforts to boost the nascent industry, would be adopted soon.

ALSO- Decarbonizing Egypt’s oil industry was on the agenda: El Molla held a series of talks with leading global companies and institutions to promote green investments in the country aimed at lowering carbon emissions, according to a statement released on Friday. Discussions with oilfield services firm Baker Hughes on proposed projects and separate talks with Bank of New York Mellon Corp (BNY Mellon) representatives on funding projects were on the table, stressing the importance of international financial institutions’ role in providing concessionary financing to support governments and the private sector for low-carbon projects. El Molla also discussed bolstering cooperation aimed at lowering emissions, energy transition, and the production of green hydrogen with oil giant BP, according to a separate statement by the ministry.

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WATCH THIS SPACE #4- More green hydrogen projects in the region? US-based engineered equipment maker Chart Industries is in talks with several countries in the region over potential hydrogen projects and studies, the company’s Global Director Salah Mahdy told Attaqa on Sunday. These include Saudi Arabia, the UAE, Egypt, Oman, and Morocco, Mahdy said. He expressed his company’s readiness to provide state-of-art equipment to support potential hydrogen projects, including the manufacture of hydrogen pipelines as well as green ammonia and methanol production.

WATCH THIS SPACE #5- The EU’s renewable energy law is a done deal: EU ambassadors have agreed on a landmark renewable energy law after weeks of deadlock due to pushback from France and others demanding carve-outs for non-renewable fuels, Reuters reported on Friday. The approval comes after the Commission agreed on a possible exemption of specific ammonia plants from renewable fuel targets, replacing a floated proposal for an escape clause that would allow nuclear power to be used in ammonia production. The law will increase the EU's renewable energy targets, requiring 42.5% of EU energy — up from the bloc's current 32% target — to be renewable by 2030. It is unclear if the EU Parliament will have to approve the latest amendment to the agreement.

Another day, another target for emission cuts: The EU should slash greenhouse gas emissions by as much as 95% by 2030 to help bring it forward to its climate neutrality target by 2050, Reuters reported on Thursday, citing the bloc’s advisors. The EU’s advisory board said the goal should be between a 90-95% cut in emissions by 2040 compared to 1990 levels. The advisors said the recommended emissions-reductions target for 2040 would still be insufficient to what should be the bloc’s “fair” contribution on global climate goals given Europe’s decades-long high per-capita emissions in comparison with developing countries.

AND- The fate of a proposed nature law at the EU is unknown after a disarrayed parliamentary vote last week, Reuters reported on Thursday. The bloc’s lawmakers failed to agree on the binding measures for the law, which includes a proposal aimed at restoring nature on 20% of the bloc’s land and sea. The EU parliament’s majority group, the European People’s Party (EPP), argued that the proposal be scrapped on grounds that it would undermine food security. The voting is set to resume on 27 June before a decisive vote in the full EU Parliament.

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DATA POINT #1- US planemaker Boeing expects the aviation industry globally to add c. 42.5k jets valued at about USD 8 tn through 2042, Boeing VP of marketing Darren Hulst told Bloomberg. Boeing’s predictions take into consideration climate change altering travel globally and a rising advocacy against the industry’s emissions. Hulst says airlines would still find ways to raise productivity of their fleets by moving to large jets with denser seating patterns and the global fleet stands to nearly double through 2042 at an annual rate of 3.5%, up from a previous forecast of 2.6%.

DATA POINT #2- Global oil demand growth is expected to slow during the 2022-28 forecast period as the energy transition advances, the International Energy Agency’s (IEA) 2023 medium-term outlook report (pdf) on global trends in oil demand and supply reveals. While the rate of increase in demand is predicted to slow down, the volume of overall consumption in absolute terms is expected to increase to 105.7 mn barrels per day (bbl / d) by 2028, an increase of 5.9 mn bbl / d from 2022 levels.

But production will continue to grow, leaving spare capacity of fossil fuels: The IEA’s projections assume that major oil producers will maintain their plans to build up capacity despite the slowdown in demand. The mismatch is predicted to create a spare capacity of at least 3.8 mn bbl / d, concentrated in the Middle East. Upstream investments — exploration and production stages — in 2023 are expected to reach their highest levels since 2015.

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CIRCLE YOUR CALENDAR-

France will host The Summit for a New Global Financial Pact on Thursday, 22 June to Friday, 23 June in Paris. The two-day summit will bring together heads of states and heads of multilateral development banks, international organizations, the private sector and international NGOs to shape a new finance “toolbox” and “pave the way towards a more balanced financial partnership between the north and south.” It will also see new agreements in a bid to relieve debt distress and allow countries to access additional financing to invest in sustainable development and slash emissions.

Thailand will host the second workshop on addressing loss and damage from 15-16 July in Bangkok. The workshop will see discussions on pathways to increasing funding for climate-induced loss and damage. The workshop is being held in preparation for the third meeting of the COP27 Transitional Committee in August. The committee is tasked with operationalizing the Loss and Damage Fund, to be approved during the fourth transitional meeting in October.

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

Another step forward for Oman’s green hydrogen ambitions: A consortium led by South Korea’s steelmaking company Posco Group was awarded a USD 6.7 bn contract to set up what they described as the world’s largest green hydrogen plant in Oman’s Duqm, The Korea Economic Daily reported on Friday, citing sources it says have knowledge of the matter.

What we know: The consortium consists of six companies including four Korean firms, French energy firm Engie, and a Thai corporation, KED reports. Posco will hold a 28% stake in the group, while French energy firm Engie will hold a 25% stake. The remaining ownership will be divided among two unnamed Korean state-run power companies with a 24% stake each, a 12% stake for Samsung Engineering, and the remaining 11% for Thai’s PTT Exploration and Production company.

Who is doing what: Posco Holdings, the group’s investment arm, is set to lead the project and manage the plant-building processes in the country, KED notes. Samsung’s construction unit will be tasked with the engineering, procurement and construction (EPC) of the facilities, while the other companies will either produce or sell the green hydrogen generated by the plant.

What we don’t know: The sources did not provide details about the planned production capacity of the plant or an expected timeframe for the project, but a signing ceremony is expected on 21 June by the Omani authorities, according to the Korean news outlet.

June is an eventful month for Oman’s green hydrogen: Oman’s state-owned hydrogen company Hydrom — owned by Energy Development Oman — signed three agreements earlier this month granting the first three blocks of land for planned green hydrogen plants worth USD 20 bn. The three projects will have a cumulative production volume of 500k tons annually. It had signed six binding term sheet agreements — which it said were worth in excess of USD 20 bn at the time — with several regional and international developers for the production of green hydrogen back in March.

The sultanate has big ambitions: Oman is on track to become the sixth-largest exporter of hydrogen globally, according to a recent International Energy Agency report (pdf). Meeting Oman’s target of producing 1 mn tons of low-carbon hydrogen annually by 2030 will require a 50 TWh increase in renewable power — which is more than the current size of the country’s entire electricity system. However, Oman’s abundant renewable energy resources, vast tracts of land, existing fossil fuel infrastructure that can be repurposed, and extensive expertise in handling and exporting LNG and ammonia should help the country reach its target.

Could Egypt position itself as a regional hub for SAF production? The US Commercial Service of the US Department of Commerce and the US Embassy in Cairo held a roundtable discussion attended by Enterprise Climate on decarbonizing the aviation industry and growing the use of sustainable aviation fuel (SAF) in Egypt and beyond last Thursday. GE Aerospace, Boeing, Egypt Air, and representatives from the Egyptian government discussed the importance of using SAF to slash CO2 emissions by as much as 80% over the green fuels’ life cycle and the future of Egypt’s contribution to SAF production.

Aviation industry emissions are set to grow by 2030: While the aviation industry currently accounts for 2.5% of global emissions and 12.5% of the transportation sector’s greenhouse gasses, emissions are set to grow by 2030 as passenger numbers swell from the current 4.5 bn to 10 bn, Regional Head of Global Sustainability Policy and Partnerships at Boeing International for MENA and Turkey Mohamed Al Ghailani noted. The volume of goods transported by the air freight forwarding sector is also set to increase from a current USD 7 tn to USD 9 tn worth of goods by the end of the decade, he added.

African countries need financing and knowledge transfer programs to become regional hubs for SAF production, Director of Fuel and Emission at EgyptAir Ahmed Mattar said. The Egyptian airline will source a minimum of 2% of its fuel needs from SAFs from Europe, he told Enterprise Climate, noting that EgyptAir is also working with Egypt’s Environment Ministry and Oil Ministry to source more of its fuel needs from SAFs.

Egypt is well-positioned to supply SAF: The US private sector is looking to tap Egypt for SAF production, Regional Minister Counselor for Commercial Affairs Keith Kirkham said. US companies are currently exploring cooperation pathways with both the private and public sectors of Egypt to jointly produce SAFs, Kirkham noted. “We think there is potential for Egypt to develop as a potential producer of SAFs given the EU conditions that require air carriers to use sustainable aviation fuels even when transiting,” he told Enterprise Climate. “Egypt, rather than being a buyer, could be a seller of this, which would have an obvious export earning potential,” he added. Technology, infrastructure, and high costs are some of the challenges currently hindering the growth of the sector locally, Mattar noted.

Egypt has been courting investments: CEO of Egypt’s Waste Management Regulatory Agency Tarek El-Araby met with representatives from Egypt’s state-owned Petrochemical Holding Company last month to discuss potentially investing USD 200 mn to recycle cooking oils to produce sustainable aviation fuel and biodiesel.

Production is still ramping up: Global production rates of SAF tripled to 300 mn liters in 2022 and 130 renewable fuel projects by 85 producers in 30 countries are intent on producing SAF as part of their production of renewable fuels, according to the International Air Transport Association.

But there are challenges: SAFs are costly and their adoption has been sluggish. Their cost is 3-4x more expensive than kerosene, making their use less price competitive and thereby decreasing their production — which was estimated to have reached 0.1% of global jet fuel consumption, according to Bloomberg.

The UAE’s Masdar is going big on SAF investments: UAE renewables company Masdar recently signed an agreement with Airbus to jointly develop sustainable aviation fuels, green hydrogen, and direct air capture technologies. The agreement also sees the companies launching a book and claims framework that would enable aircraft operators to source their SAF supplies without being geographically connected to a stockpile site. The renewables giant is also looking to establish MENA’s first commercial-scale SAF production facility in Abu Dhabi. Masdar, Adnoc, Emirates Airways, and Tadweer are conducting the feasibility study for the project with BP.

And it’s picking up regionally: Omani biofuels producer Wakud plans to establish a plant with a capacity of 250 tons per day at an investment cost between USD 120-150 mn in partnership with Omani-British green energy venture X2E, which will produce sustainable aviation fuel and marine fuels by 2025.

IN OTHER SUSTAINABLE AVIATION NEWS-

France stepping up efforts in SAF production: French President Emmanuel Macron said EUR 1 bn will be granted to help fund a SAF plant and efforts by private airlines to develop cleaner planes, Bloomberg reported on Friday. The pledged aid includes EUR 200 mn to help develop renewable jet fuel projects, including one in southern France by French startup Elyse Energy, Macron said. The French biofuel startup and its partners, which include TotalEnergies, plan to invest EUR 1 bn to produce synthetic jet-fuel using wood waste and low-carbon hydrogen. Elyse Energy aims to have a final investment decision on the plant by 2026 and plans to launch operations in 2028.

Airlines want EU taxpayers to bear cost of sustainable air travel: Representatives of airlines including Neste Oyj, KLM, and Etihad Airways are calling on EU lawmakers to replicate US incentives to help airlines transition to SAF, Bloomberg reported on Friday. Airline executives are warning that while the US’ USD 369 bn Inflation Reduction Act (IRA) provides subsidies of USD 1.75 per gallon of SAF used, Europe — which will require SAF to comprise at least 6% of aviation fuel by 2030 — is lagging behind. EU mandates on SAF use, as well as flight restrictions to curb CO2 emissions, could send air fares “through the roof,” Bloomberg quotes Emirates Airline President Tim Clark as saying ahead of the Paris Air Show, which starts today.

Another green push for Morocco’s textile industry: Morocco’s leading polyurethane foam and bedding brand Dolidol has launched its greenfield plastic recycling business Dolicen, a statement by Morocco’s Industry and Commerce Ministry read on Saturday. Dolicen will specialize in manufacturing PET products through polyethylene terephthalate.

What we know: With an investment value of MAD 200 mn, the plant aims to manufacture up to 12k tons of finished products and recycle over 600 mn PET bottles annually. Its production capacity would help fully meet 100% of Dolidol’s in-country needs, helping cut reliance on imported polyester. It is set to provide 100 direct and 1k indirect job opportunities, according to the statement.

Morocco has been making efforts to green its textile industry: The kingdom set up a MAD 1 bn textile recycling project partially powered by renewables with Portugal last month. The facility aims to recycle fabric waste from textile factories in the country, targeting a daily production capacity of 30 tons of textiles starting 2027. The project will help eliminate textile waste, which is estimated at 83.2k tons annually, an International Finance Corporation (IFC) report (pdf) showed, citing 2021 data from the UNIDO and SwitchMed. Most of the waste can be recycled through modern shredding lines, according to the study.

Spain is getting a Saudi solar PV plant: Spain’s Iberdrola has secured the planning permissions to kickstart the construction of a 100 MW captive solar photovoltaic plant in the Spanish port city of Cartagena on behalf of Saudi chemicals giant SABIC, a statement by the utility provider read on Thursday.

The details: Under a power purchase agreement (PPA), Iberdrola will commit to supplying electricity from the solar farm to SABIC’s industrial facility La Aljorra for 25 years, the statement says. The solar plant — which would require c.EUR 70 mn in investment — would see Iberdrola install 263k solar panels and is expected to come online in 2024.

We’d already known about this: SABIC and Iberdrola signed in 2020 an agreement on the 100 MW solar PV facility as part of a plan to make the Saudi company’s polycarbonate facility in Spain the world’s first large-scale chemical production site to fully operate on renewables. The solar farm will allow SABIC’s customers — including those in the automotive and construction sectors — to access polycarbonate solutions manufactured entirely through renewable energy.

All part of SABIC’s ambitious targets: The solar facility should help the Saudi chemical producer meet its target of having 4 GW of wind or solar energy installed for its sites globally by 2025 and 12 GW by 2030.

More to come? Iberdrola and SABIC plan to fully decarbonize their Cartagena plants by 2028, the statement noted. “We continue to work closely with SABIC to implement additional solutions to achieve full decarbonization at any facility globally,” Iberdrola’s Director of Global Customers and PPAs Raquel Blanco at Iberdrola said.

A successful carbon auction by the Saudis: Saudi Arabia’s Regional Voluntary Carbon Market Company (RVCMC) signed two MoUs with Kenya’s main dry cell battery maker Eveready East Africa and Carbon Vista Nigeria to set up high-quality and impactful carbon projects in the two countries, SPA reported on Thursday. No more details were disclosed on the MoUs which were signed on the sidelines of a carbon credit auction hosted by the RVCMC last week. The auction — described as the largest-ever voluntary carbon credit auction — saw the sale of over 2.2 mn tons of carbon credits amid strong demand.

What we know: The auction saw some 16 Saudi regional and international entities participating, with Aramco, the Saudi Electricity Company (SEC), and Neom subsidiary Enowa purchasing the largest number of carbon credits. It offered high-quality Corsia-eligible and Verra-registered carbon credits, which can allow buyers operating in several industries to play their part in the global transition. The auction saw a clearing price of SAR 23.50 per ton of carbon credits. Last week’s sale by the company — established by Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF) and the Saudi Tadawul Group — beat the sale of some 1.4 mn tons of carbon credits during its first auction, which was held in Riyadh last October.

Where are the proceeds going? Funds generated by the sale of RVCMC’s carbon credits will be channeled to a basket of credits including 18 projects that represent a mix of CO2 avoidance and removal, including renewable energy projects and others. Most of the carbon credits auctioned came from countries in the region and sub-saharan Africa, including Egypt, Morocco, Rwanda, Uganda, Kenya, Burundi, and South Africa.

REMEMBER- The voluntary carbon market is picking up pace: The voluntary carbon market quadrupled to some USD 2 bn in 2021, and could be worth in excess of USD 50 bn in 2023, according to McKinsey. The UAE and Egypt are also working to establish carbon exchanges.

La Mancha chips in USD 100 mn for Brazilian mine acquisitions: The La Mancha Fund — backed by Egyptian investor Naguib Sawiris — is backing the USD 1 bn acquisition of two Brazilian mines by London-listed SPAC ACG Acquisition Company, according to a statement (pdf) released last week. The fund has invested USD 100 mn in support of the deal, which will see the blank-check firm acquire the Santa Rita nickel sulfide and the Serrote copper mines in Brazil.

Big name investors behind the takeover: The acquisition is also being backed by global commodities giant Glencore, Chrysler parent Stellantis, and VW’s battery unit PowerCo. Each — including La Mancha — will invest USD 100 mn to purchase themines. PowerCo’s USD 100 mn investment will come in the form of a nickel prepayment.

Metals refined for EV batteries: The metals will be refined at Glencore’s facilities in Western Europe and North America and the refined metals will then be used by Stellantis, PowerCo and other manufacturers to make EV batteries.

ACG gets a new name and new owners: The firm will change its name to ACG Electric Metals and issue new shares, giving Glencore, Stellantis and La Mancha a 51% ownership stake and leaving 49% for free float, ACG CEO Artem Volynets told Reuters.

BACKGROUND: La Mancha in 2021 transformed itself into a USD 1.4 bn mining fund that includes all of La Mancha’s current gold mining assets as well as a USD 100 mn contribution from an unnamed strategic investor.

Morocco’s M6FI gets a boost from the IFC: Morocco’s Mohammed VI Fund for Investment (M6FI) signed a partnership agreement with the International Finance Corporation (IFC) for support in identifying and financing sustainable infrastructure projects, Morocco World News reported last week. The size and timeline for the agreed plan was not disclosed, in addition to the type of infrastructure projects of interest.

The details: The M6FI will launch a sub-fund to receive investments from both Moroccan and international partners to funnel towards sustainable infrastructure projects. Under the partnership agreement, the IFC will share its expertise in structuring, governance, and financing of infrastructure projects.

About M6FI: M6FI was established in 2020 with an initial capital of MAD 15 bn (USD 1.5 bn), and a goal to bring in MAD 30 bn (USD 3 bn) of additional private capital, according to the news outlet. The fund aims to generate a total investment budget of over MAD 150 bn (USD 15 bn).

REMEMBER- The fund was looking to expand its investments last year, including in renewables: The fund was looking to raise USD 14 bn to ramp up private sector investments, including in renewables projects, the Kingdom’s Investment Minister Mouhcine Jazouli told Bloomberg Asharq at the time. The country expects to raise USD 4.2 bn locally and the remaining USD 8-10 bn from Europe and the GCC.

China’s Yichun city is struggling with lithium mining damage: Yichun — China’s most prospective region for lithium — is grappling between maximizing lithium mining to lead the electric vehicle battery boom, and holding off on expansion as concern over the environmental impact grows, Reuters reported on Thursday. Extracting and smelting lepidolite — the rock from which lithium metal is extracted — produces toxic by-products like thallium and tantalum that cause “severe water pollution,” assistant professor at Xiamen University Wu Wei told the newswire. Yichun authorities have shut down some plants due to complaints of environmental damage.

But plans to expand lithium production are still in motion: While monthly lithium output in Yichun has fallen by about a third, the city still plans to quadruple its output to about 500k metric tons of lithium carbonate — the first chemical in the lithium production chain — by 2025. If the target is met, tailings — or waste left from mining — would increase 10 fold to 10 mn tons, director of Yichun's lithium battery new energy industry development center Lv Jun said.

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Sulfur and nitrous emissions from cruise ships surge: Cruise ships in Europe released 4x more sulphuric gasses into the atmosphere than all of the continent’s combined emissions from passenger vehicles, the Financial Times reported on Thursday, citing a report by climate lobby group Transport & Environment. Despite the International Maritime Organization introducing a 0.5% cap on sulfur content in marine fuels in 2020, dozens of extra cruise ships have been added to the fleets of major operators, increasing overall emissions. Additionally, emissions of nitrous oxides and fine particles — both linked to respiratory diseases and lung cancer — have increased by 18% and 25% respectively since 2019.

Acwa Power and Huawei partner on renewables R&D program: KSA’s Acwa Power has inked an MoU with China’s Huawei Digital Power to develop a joint research and development (R&D) program that aims to localize photovoltaic string production tech in Saudi Arabia, according to a statement released on Friday. The program will work on maximizing the efficiency of Acwa Power’s solar panels to push down installation and maintenance costs associated with solar projects while reducing balance of system costs. The agreement may also see the two sides partner on the deployment of microgrid power systems to optimize energy performance, load balancing, and grid stability, which will in turn accelerate the transition to renewables and help KSA move away from fossil fuels, the statement notes.

Egyptian contractor Petrojet and Huawei Digital Power signed an MoU to increase collaboration in projects aimed at reducing emissions in the petroleum field, according to a statement released on Friday. The agreement aims to have Huawei use its newest technologies in solar energy storage and green data centers to improve energy efficiency and decrease dependence on diesel. Some technologies will be used in operating machines and controlling systems in oil and gas facilities and their pipelines.

Omoda and Jaecoo — a subsidiary of China’s Cherry Group — will launch its first electric car — the Omoda 5 EV — in Saudi Arabia’s markets in 4Q 2023, Al Watan reported on Thursday. The sales will be managed by the company’s international office in Riyadh — expected to launch in the next quarter — marking a different approach than other car manufacturing companies that rely on major distributors to carry out sales in the Saudi Arabian market. The Omoda 5 EV is a two-door, four-seater EV with a 61kWh battery offering a range of 450 km with over 204 horsepower and a fast charge time of 35 minutes.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• UAE waste management company Beeah Group has signed an MoU with sustainable cleaning technology company Karcher Middle East to supply the Group with equipment for enhancing its waste management operations. (Wam)
• BMW became the first client to purchase Emirates Global Aluminium’s CelestiAL-R aluminum blend — aluminum produced using solar energy while integrating scrap metals in its process. (Statement)
• Qatar and South Korea have committed to push for four MoUs to boost cooperation on smart grids, power generation, and marine transport during the Qatari-Korean Investment Forum in Seoul. (Yonhap News Agency)
• Al Futtaim Auto & Machinery Company has launched the region’s first-ever heavy-duty electric truck. (Statement)
• KSA-based Al Fanar Construction is earmarking SAR 10 bn (USD 2.67 bn) to build and operate five temporary housing complexes in Neom. The project will include solar power, wastewater treatment, and computerized waste management facilities to ensure the complex’s sustainability. (Al Okaz)
• UAE-based Magnus Green Solar partnered with India’s Cliantech Solutions to set up a fully automated solar module manufacturing line with an initial annual capacity of 600 MW, to later be expanded to 1.2 GW over two phases. The production line will be the first of its kind in the region. (Solar Quarter)

Norway’s Norsk Hydro has made the world’s first batch of aluminum using green hydrogen, Bloomberg reported on Thursday, citing a company statement. In a big milestone for global green manufacturing, Hydro partnered with hydrogen burner technology experts at Paris-based Fives North American Combustion company, to run a trial test replacing natural gas with green hydrogen for green aluminum production. The test — which will have its final report on the results published in the fall — was held at Fives’ extrusion plant in Navarra, Spain and is part of Hydro’s strategy to develop commercial fuel switch solutions, company CEO Christian Eriksen said. Aluminum is one of the world’s most energy-intensive industrial commodities to make, accounting for around 3% of the world’s direct industrial CO2 emissions.

A stake sale in Eni’s renewables business? Italian energy giant Eni has ramped up negotiations with a number of investors over the potential sale of a minority stake in its renewables and retail unit Plenitude, Reuters reported last week, citing sources with knowledge of the matter. Two of the sources said Eni is working on offloading between 5-15% of Plenitude, with the transaction possibly being executed before August. The talks come months after preliminary talks began between Eni and Norway’s HitecVision over a stake sale, but the potential sale never materialized. The sale of a minority stake in Plenitude would give the company a value and help revive plans for a future listing. Sources say a new bid to list the company could begin at the end of 2023 or 2024. The revival would come months after Eni shelved IPO plans for Plenitude in June 2022 due to unfavorable market conditions.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• UK fund manager Legal and General Investment Management added aviation giant Air China and multinational shipping company Cosco Shipping Holdings to the list of 342 firms subject to voting sanctions as a result of their “poor climate change standards.” Its investment blacklist now applies to funds with nearly USD 200 bn in assets. (Bloomberg)
• US President Joe Biden vetoed a measure approved by Congress to overturn his administration's new limits on emissions from heavy-duty trucks. The measure is 80% more stringent than current standards. (Reuters)