ECARU, Qalaa Holdings, and France’s Axens to study biofuel + SAF production in Egypt

Good morning, ladies and gents. After an avalanche of news yesterday, the news cycle has slowed, culminating in a light and brisk issue for you to breeze through this morning.

THE BIG CLIMATE STORY- The Egyptian Company for Solid Waste Recycling, Qalaa Holdings, and France's Axens signed a cooperation protocol to conduct technical and economic studies for second-generation biofuel and sustainable aviation fuel production projects.

ALSO IN OUR NEWSWELL- Make sure you read part one of our conversation with Egypt’s climate champion Mahmoud Mohieldin to find out why he thinks a fast tracked evolution of MDBs is vital for the energy transition.

^^ We have more details on these stories and more, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Thunberg’s in lukewarm water: Swedish climate activist Greta Thunberg was forcibly carried away by police from a protest in Malmo hours after a local court fined her for disobeying a police order during a climate protest in June. Thunberg, who pleaded not guilty on grounds that she was acting out of necessity, was fined SEK 1.5k (USD 144) and an additional SEK 1k to the country’s fund for crime victims. The fine comes a few weeks after Thunberg and other activists from the Reclaim the Future group blocked the road for trucks carrying oil at the Malmo harbor. She was charged for failing to follow police orders to leave at the time.

Thunberg’s slap on the wrist got ink in the international press: Bloomberg | Reuters | The Associated Press | AFP | The Guardian | CNN | BBC

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WATCH THIS SPACE- Algeria, Irena team up on renewables and green hydrogen: Algeria’s Energy and Mining Minister Mohamed Arkab met with International Renewable Energy Agency (Irena) Director Francesco La Camera in Algiers to build cooperation on climate financing and knowledge transfer in the mining and green hydrogen sectors, according to a statement. The meeting came on the sidelines of the opening ceremony for bid submissions for 15 solar plants with a total capacity of 2 GW to be installed across 12 states in Algeria.

Forging ahead with plans? Last January, Algeria charged state-owned gas company Sonelgaz with the production of 15 GW by 2035 from renewables. The meeting comes days after Algeria got the boot from an ambitious European hydrogen plan on the back of diplomatic tensions with Madrid. Earlier this year, Arkab met with a delegation from Saudi Delta Company to discuss potential investments in renewables and green hydrogen through Algeria’s state-owned oil firm Sonatrach.

CIRCLE YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial, or fill out this form and we’ll be in touch.

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DID YOU MISS THE ENTERPRISE EXPORTS AND FDI FORUM? Tune in to the Enterprise Podcast and listen for yourself: The Enterprise Podcast is back with another installment of our forum series, where we bring you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum, which took place in May.

WANT TO LISTEN? Head to: Apple Podcast | Spotify | Google Podcast | Anghami. We’re releasing a new episode every Sunday morning.

IN THIS WEEK’S EPISODE- We ask some of the biggest multinationals and suppliers operating here — namely, in logistics, e-commerce, and FMCG — what it is they’re looking for in a local partner, product or service and what are some of the pain points they’ve had to cope with. We were joined on that panel by Khaled Morsy, CEO of DB Schenker Egypt, Omar Elsahy, General Manager at Amazon Egypt, Tarek Kamel, Chairman and CEO of Nestlé Egypt and Sudan.

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THE DANGER ZONE- Climate change is warming the Mediterranean Sea and increasing its salinity, according to a new report by the Spanish Institute of Oceanography (IEO). A 31-year study period has concluded that global warming has increased the temperature and salinity of the Mediterranean from its uppermost layer and throughout its depth range. The surface layer of the Alboran Sea — the westernmost portion of the Mediterranean between North Africa and the Iberian Peninsula — is warming at a 2ºC/century rate, while surface waters of other parts in the Western Mediterranean are warming at close to 3ºC/century, the institute says. The IEO says the Mediterranean also showed a rise in sea level of around 2.8mm/year over the study period, with a significant intensification of the trend since the early 1990s. In 2021, a UN report (pdf) estimated that oceans absorbed about 30% of total CO2 emissions and trapped approximately 90% of the heat generated by greenhouse gas emissions. The increase in heat absorption is causing ocean acidification, deoxygenation, and sea level rise.

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CIRCLE YOUR CALENDAR-

Sweden will host World Water Week from Sunday, 20 August to Wednesday, 24 August in Stockholm. Organized by the Stockholm International Water Institute, the event will bring together policy makers, NGOs, and private sector players to discuss innovative solutions to managing water and how to tackle food security, biodiversity, and climate change.

The US will host the International Conference on Recycling and Waste Management and the International Conference on Environmental Sustainability and Climate Change

from Monday, 21 August till Tuesday, 22 August in Philadelphia. The waste management conference will gather environmental engineers, and recycling, wastewater treatment, and climate researchers to discuss trends and innovations in plastics recycling, wastewater treatment, and renewable energy. The sustainability and climate change conference will bring together researchers and industry leaders to spotlight innovations in environmental science, climatology, renewable energy, and pollution control.

The Dominican Republic will host the COP27 Transitional Committee from Tuesday, 29 August to Friday, 1 September. The meeting aims to establish institutional arrangements, modalities, governance structures, and terms of reference for the landmark Loss and Damage Fund. It also wants to expand sources for climate funding under the program.

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

SAF production in Egypt is getting a boost: The Egyptian Company for Solid Waste Recycling (ECARU), Qalaa Holdings, and France’s Axens signed a cooperation protocol to conduct technical and economic studies for second-generation biofuel and sustainable aviation fuel (SAF) production project, according to a statement (pdf).

What we know: The studies will be carried out in seven months, the statement notes. The project will be implemented in two phases, with the first focusing on the production of the advanced bioethanol and the second phase focusing on the production of SAF, it added. with potential for exports of the second-generation biofuel at a later stage.

Qalaa and ECARU have history: Qalaa Holdings invests in ECARU through its subsidiary Tawazon under efforts to provide practical solutions for cleaner energy resulting from converted biomass. It has contributed in the disposal and recycling of 3.5 mn tons of agricultural waste for further use over the past 15 years, according to the statement.

Egypt could be well-positioned on the SAF map: The US private sector is looking to tap Egypt for SAF production, Regional Minister Counselor for Commercial Affairs Keith Kirkham said at an event attended by Enterprise Climate last month. US companies are currently exploring cooperation pathways with both the private and public sectors of Egypt to jointly produce SAFs, he 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 at the time. “Egypt, rather than being a buyer, could be a seller of this, which would have an obvious export earning potential,” he added.

But there could be challenges both at home and abroad: Technology, infrastructure, and high costs are among some of the challenges currently obstructing the growth of the sector locally, according to statements by the Director of Fuel and Emission at EgyptAir Ahmed Mattar. The climate-friendly branded SAFs are also more expensive and their adoption has been stagnant. 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.

Innovation Park Muscat is getting a district cooling plant: Oman’s Higher Education Ministry signed an agreement with central cooling solutions company Tabreed Oman — a subsidiary of UAE’s National Central Cooling Company (Tabreed) — to establish a district cooling plant in Innovation Park Muscat (IPM), Times of Oman reports. The financial details of the plant and a timeline for construction have not been disclosed.

What we know: The central cooling plant will span 1.5k square meters and will have a capacity of 10k ton refrigeration tons (RT). The facility will serve the heating and cooling needs of pre-existing buildings and further developments in IPM, the news outlet notes. Spanning 540k square meters, IPM is a research and development center that aims to accelerate the growth of Omani-based renewables, food, biotech, and oil recovery firms.

Tabreed has been expanding its MENA operations: The company increased its total connection capacity to over 1.2 mn RT last year by adding some 34k RT of new connections in the UAE, some 19k RT in Oman, and 500 RT in Bahrain throughout the year. The company also announced a partnership with Egypt’s Gascool and real estate investment firm Marakez in February to provide district cooling services to the D5M mall in Cairo’s New Katameya. Earlier in September, Tabreed signed a long-term BOO agreement with Egyptians for Healthcare Services Company for a district cooling plant that will serve Cairo’s healthcare city project CapitalMed.

We’re 128 days away from COP28 kicking off: As this year’s summit nears, a fossil fuel phase down continues to be a contentious issue as nations fail to reach consensus at conferences preceding the summit. Major disagreements are emerging and intensifying between developed and developing countries during preparatory meetings, sparking worries on progress given the urgency of the climate crisis. Vulnerable and climate-hit nations are still awaiting concrete progress on the landmark loss and damage fund agreed upon in COP27 in Sharm El Sheikh, with the COP28 presidency handing out assurances that pledges will turn into actions.

We sat down with Mahmoud Mohieldin — Egypt’s UN high-level climate champion at COP27, a special envoy for the UN secretary-general, and an executive director at the IMF — for a follow-up chat to discuss climate finance and the necessary mechanism for emissions reduction ahead of COP28. Prior to his appointment as Egypt’s climate champion, Mohieldin served as the World Bank’s senior vice president for the 2030 Development Agenda, where he helped shape the 17 sustainable development goals — the global metric for development.

In part one of our interview, Mohieldin highlights the necessity of adequate climate finance to help achieve desired climate goals while underscoring the importance of climate-driven tech solutions, a more evolved role for multilateral development banks (MDBs), and a just transition for all.

Enterprise: Let's begin with the landmark loss and damage fund. What progress has been made since it was agreed upon during COP27?

Mahmoud Mohieldin: After waiting for such an institutional arrangement to cope with the losses and damages affecting many countries — especially the small islands countries with high vulnerability for many years — the loss and damage fund was not an easy objective to fulfill. It required patience, skills, and the support of the Egyptian presidency of the COP.

There has been an arrangement to facilitate the governance and the structure of the fund through a committee with the representatives from developing economies and emerging markets, and from the advanced economies. There have been meetings, they have been in meetings for some time now. I think by COP28, there will be some sort of a structure of governance and identification as well of the sources of funds. The existence of a fund isn't enough though, there are other elements that should be taken in consideration, including who signs up for it, who is eligible, and who monitors it.

There have been some discussions with non-state actors, the civil society and the private sector. Firstly, regarding the role of the ins. sector in assessing the risks and damages, as they are more qualified than others to do that especially regarding the implications on the private sector or provision that they have to make. Another point of discussion is the need for capacity development and technical assistance.

E: There appear to be major differences emerging between developed and developing countries’ delegates during preparatory meetings ahead of COP28, the latest being the lack of concrete progress during the Bonn Climate Conference. Why do you think this is happening?

MM: For those who have spent a great deal of their lives attending these conferences and negotiating at them, this is not atypical for the conference — you experience wide differences between advanced economies and the developing economies and emerging markets. A conference like Bonn — held at the midway point between each COP summit — concluded with resolutions and recommendations for a COP that is being prepared for. Having said that, there are reasons — it’s not just playing games.

The priorities for advanced economies is to expedite the work on dealing with the emissions. We can always talk about the fact that some of them — despite them pushing for dealing with emissions — are not achieving that, especially in the aftermath of the Ukrainian war which led to an increased use of high emission emitting sources of energy such as coal. The latest report from the Intergovernmental Panel on Climate Change tells us we need to reduce emissions by 45% by 2030, but unfortunately we are adding around 15% more emissions so we need to double efforts.

E: How can countries manage that?

MM: First, you need finance, which is not at adequate levels currently. Financing usually comes in the form of debt, and less so of investments and grants. This has been the expectation since COP15 in Copenhagen — and endorsed by 2015’s Paris Agreement — to have developing countries assisted by developed nations to help them achieve their goals and targets on climate.

Next, countries need to focus on technology, research and development, technical assistance, and development. Without technology, developing countries like Egypt, Morocco, or Senegal wouldn’t be able to invest in renewable energy. Thanks to technology and production at scale, we are able to invest with decent returns compared to a decade ago.

Lastly, all the above needs to be carried out within a just transition — not just for energy, but the just transition at large. There will be people affected if an energy transition is rushed without adequately substituting traditional sources of energy used or upgrading production lines dependent on the hydrocarbon sector.

You cannot solve a climate crisis by creating a debt, unemployment, or poverty crisis. There are more feasible and balanced alternatives to phase out fossil fuels and hydrocarbons, but renewables need to be phased in first.

E: Some have criticized the Summit for a New Global Financing Pact in Paris for failing to provide a relief for poorer debt-distressed countries ahead of climate talks at COP28. What are your thoughts on this?

MM: I think people need to manage their expectations when they attend these summits. Sometimes the expectation is that heads of states will be there, matters will be dealt with, and there will be concrete decisions. But you cannot upgrade global financial architecture during a summit.

The recent discussions in Paris had an overwhelmingly large agenda including international financial architecture, debt challenges, and supporting sustainable development. From a positive perspective, it's good to see leaders meeting and discussing global issues of mutual concern. But I was expecting more movement on putting MDBs like the World Bank and the African Development Bank on a faster track for a so-called evolution roadmap.

I have concerns regarding what MDBs can do and the unnecessary delay in capital increases causing harm — both to the institutions and the private sector. Without adequate resources, many key projects and partnerships will be slowed down. It's very much a requirement today to see that evolution roadmap put on a fast track.

Unregulated carbon offsets are raising the alarm for all: A scheme by a Belarusian trade group to sell 2 mn of Russian carbon credits from a discontinued United Nations group has been condemned by climate experts and traders and raised concerns over unregulated emissions reduction units (ERUs) corrupting the market, Bloomberg reported this week. Some 2.5 mn ERUs were retired in 2022, most of which were held in Swiss accounts, analysis by Bloomberg News from data filed to the UNFCCC showed. Such credits are pulled out on claims that physical emissions have been offset.

More details: The 2 mn Russian ERUs trying to make its way to the market were generated between 2008 and 2012 from a Siberian forestry program under the old UN Joint Implementation carbon market set up under the Kyoto Protocol, according to Belarusian officials. Pablo Fernandez, the CEO of Switzerland-based project developer and investor Ecosecurities sees the scheme as “surreal,” and warns that further progress could “only be detrimental to the market.”

UAE’s SNOC partners with Japan’s Sumitomo on CCUS: The UAE’s state-owned Sharjah National Oil Corporation (SNOC) has signed an initial agreement with Japanese trading and investment company Sumitomo Corporation to establish a carbon capture, utilization and storage (CCUS) project in Sharjah, The National reports. The estimated project costs and CO2 storage capacity of the facility were not disclosed. Both companies will conduct a feasibility study across the CCUS value chain for the project including in “transport, storage, business models and assessment of regulatory aspects,” the National quotes SNOC as stating. SNOC has committed to fully decarbonizing its operations by 2032.

A new JV in Oman to boost EV infrastructure: Oman Oil Marketing Company — a subsidiary of the country’s state energy company OQ — has partnered up with Synergy Investments for the development of electric vehicle infrastructure in Oman, Muscat Daily reported earlier this week. Under a binding heads of terms pact signed earlier this month, both companies will establish a JV named Electric Vehicles One focusing on the trading, installation, operation and maintenance of electric vehicle charging stations.

In line with Oman’s big EV plans: The sultanate recently rolled out plans to fully decarbonize its mobility sector by 2050 through an ambitious three-phase plan by the country’s Transport, Communications, and Information Technology Ministry. The first phase would promote the use of EVs in the country through several initiatives, including setting up electric charging stations. Some 145 charging stations will be accessible by the end of the year and a further 250 stations would be operational by 2040, according to officials.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• A UAE desalination partnership: Sharjah’s Electricity, Water, and Gas Authority is partnering up with the Emirates Water and Electricity Company to set up low-carbon reverse osmosis water desalination plants in the UAE. (Wam)
• Uptick in Omani minerals: Revenues for Oman’s minerals sector grew 11% y-o-y in 2022 as the government tries to lure in investments in the country’s rich and diverse mineral deposits. (ONA)

Japanese trading corporation Itochu Group says it will invest USD 2 bn across the US and Canadian renewable energy markets, according to a statement. Itochu said it would work together with Sumitomo Mitsui Trust Bank on setting up the fund and providing institutional investors, mainly in Japan, with avenues to invest in renewable energy in the US and Canada. Fuyo General Lease Co. and Tokyu Land Corporation have invested in the fund, and Itochu is continuing to court investors. The fund will be overseen by Itochu’s North America subsidiary Tyr Energy, which has a 2 GW pipeline of solar energy projects in the US.

One of Indonesia’s top nickel producers, PT Indonesia Morowali Industrial Park (IMIP), is looking to power nickel mining operations with renewable energy, Bloomberg writes. Indonesia could supply more than 60% of the world’s nickel demand — which is essential for EV battery production — by 2030. However, the country is facing increasing pressure over its use of coal to power mining operations. IMIP wants to install up to 500 MW worth of solar panels to push down its carbon footprint, with plans to invest USD 63 mn to deploy the initial 100 MW phase of the project. Alongside investments in solar energy, IMIP is looking at using electric trucks to further greenify its operations.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• The Great Barrier Reef at risk? A marine heatwave is hitting over 2k km of Australia’s Queensland coastline, threatening the health of corals and other sea life in the Great Barrier Reef. (The Guardian)