The UAE has raised its carbon reduction targets for 2030

Good morning, everyone, and welcome to the accidental policy issue of Enterprise Climate. Today, we look at changing emission targets as well as energy policy recommendations from around the region, starting with:

THE BIG CLIMATE STORY- The UAE has decided to upgrade its end-of-decade emissions targets in response to calls from last year’s COP summit for countries to get more ambitious with their climate goals.

This comes as the UAE is also getting props for its policies promoting EVs. Management consultancy Arthur D. Little chose the Emirates as the sole Middle East listing in its EV readiness index.

^^ We have more on both stories in the news well, below.

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PSA- The Bank of Bahrain and Kuwait (BBK) is now offering green transition loans to businesses. Companies that want to partially or entirely transition towards renewable energy sources may be eligible for facilities with faster approvals, “competitive” interest rates and flexible terms, the bank said. “The facility is also provided to companies working on implementing cooling strategies, waste-to-energy conversion, sustainable green buildings, and environmentally friendly practices,” it noted.

HAPPENING TODAY-

It’s world green building week. Some 70 councils are holding events globally from 12-16 September, with the aim of making the building sector a part of the solution towards net zero carbon. You can find the agenda here.

The Egyptian Center for Economic Studies will host a seminar on “early warning systems for natural disasters” today via Zoom. The virtual gathering aims to address Africa’s need for an integrated early warning system for natural disasters. You can register for the event here.

Also today: The two-day South Sudan oil and power conference is scheduled to take place in Juba, South Sudan. Check out the event’s website here to register as a speaker, attendee or a sponsor.

Iran’s International Renewable Energy and Energy Efficiency Exhibition enters its second day in Tehran. The event aims to showcase the latest technologies in renewable energy innovation and will run through Thursday.

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WORTH READING- Droughts around the world are stifling the growth of hydroelectric power as a renewable energy source, the Wall Street Journal writes. Given the ongoing droughts in Europe, China and the US, electricity generated by hydropower is drying up, causing a global thirst for energy that remains unquenched. Hydropower plants that move river streams into rotating shafts to generate electricity produced less energy this year due to shallow water levels, the newswire notes. Similarly, hydropower plants that store water in reservoirs for later use are affected by scant rainfall and surging evaporation levels caused by heat, WSJ notes.

The droughts are “causing a rethink of how [hydropower] fits into a resilient energy system,” energy executives, analysts and government planners told the newspaper. One of the unintended consequences of hydro’s bad summer is an increase of coal use to make up for demand, analysts say.

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CIRCLE YOUR CALENDAR-

The UN Economic and Social Commission for Western Asia is hosting its Towards COP27: Arab regional forum on climate finance on 15 September in Beirut. The forum will explore the climate finance needs of Arab countries to ensure water, energy and food security, while showcasing projects that can accelerate climate action.

The European Union’s Delegation to Egypt will host Euro-Egyptian energy day on Friday, 16 September at the Fish Garden in Zamalek, Cairo, Egypt. Speakers will include EU delegation to Egypt chief Christian Berger, as well as a number of Egyptian ministers. Alongside workshops, there will be activities for kids, including how to build a solar-powered car, a windmill and a watermill using Lego bricks.

The Wetex and Dubai solar show will run 27-29 September at the Dubai World Trade Center.

Dubai will host the World Green Economy Summit on 28-29 September. The summit wants to provide a platform to build consensus around the potential of technologies, policies and youth that could drive the green economy transformation.

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

SMART POLICY- The UAE has raised its 2030 carbon emission target in response to the call at last year’s COP26 summit for countries to get more ambitious with their climate goals. In an updated set of nationally determined contributions (NDCs), the country has pledged to slash CO2 emissions by 31% by the end of the decade, compared to its previous commitment to a 23.5% reduction, the Climate Change and Environment Ministry said yesterday.

The small print: We’re not talking about reducing emissions from current levels here, but rather a hypothetical “business as usual” estimate of where emissions are expected to be by 2030 if no action is taken. In this scenario, the UAE’s emissions are forecast to rise to 301 mn metric tons by the end of the decade, assuming moderate economic growth. What the ministry committed to yesterday was to reduce this figure by 31% (or around 93.2 mn tons).

In perspective: Meeting these targets would mean that emissions in 2030 would still remain above where they were in 2020, when the country produced 203.14 mn metric tons of CO2.

Where the cuts are coming from: Almost two-thirds of the reduction will come from the electricity sector, while c. 17% will come from industry and just under 10% from transportation. The government’s hope is that carbon capture technology will reduce carbon emissions by 5%, while the waste management sector will be responsible for 2% of reductions.

The UAE wants the private sector on board: In May, the Climate Change Ministry began engaging with private sector players in key sectors on how they will need to contribute to the country reaching net zero by 2050. The National Dialogue for Climate Ambition is organizing monthly meetings with stakeholders from different sectors to communicate the government’s requirements and set priorities.

Expect tighter targets as we near COP28: “With the submission of the updated second NDC, we are demonstrating our commitment to progressively raising our ambition further each year as new solutions and initiatives become available,” Climate Change and Environment Minister Mariam Almheiri said in the statement. “As the host of COP28, the UAE will continue building on its climate ambition towards 2023 and beyond,” she added.

We spoke with Almheiri in our first issue of Enterprise Climate.

Management consulting firm Arthur D. Little has put the UAE at #8 in its latest Global Electric Mobility Readiness Index (pdf), which selects 15 countries at different stages of development and ranks them by “readiness” for EVs.

An emerging market: The UAE — the only MENA country to feature in the index — was classified as an “emerging EV market,” which the index defines as markets still dominated by the combustion engine, but where heavy investment is beginning to cause the tide to turn.

Points for infrastructure: Thanks to programs like the Dubai EV green charger initiative, the UAE currently has 325 charging stations, giving it one of the most favourable charging-station-to-vehicle ratios in the world, the consultancy says.

It’s just that there aren’t many cars to charge… Battery EVs and plug-in hybrids account for just 7% of cars currently on the road in the UAE, according to data in the report.

…though that’s changing fast: Arthur D. Little expects the UAE EV market to grow at a CAGR of 30% between now and 2028, with 44% of road users saying that they’re likely to buy an EV as their next vehicle. The government wants to see 42k EVs on the streets by the end of the decade.

Authorities are nudging people in that direction: The Dubai Electricity and Water Authority and the Road Transport Authority are working on incentives, including gratis parking, toll exemptions, and lower registration fees to make EVs more attractive to car owners.

The UAE is also starting to build up an EV assembly industry: Dubai’s Jebel Ali Freezone is home to the region’s first EV and battery logistics hub operated by DHL. Dubai-based investment firm M Glory Holding Group is planning to open a AED 1.5 bn EV manufacturing plant — the largest in the region — and last week Nwtn Motors signed an agreement for an EV assembly facility that would produce 50k vehicles a year.

Enterprise Explains: Flare gas-to-energy could help clean up a dirty industry: Since the beginnings of the oil industry, greenhouse gasses — primarily methane — that emerge from the oil extraction process have been burned in a process called flaring — one of the most polluting aspects of the industry. In 2021, oil companies worldwide flared some 144 bn cubic meters of gas, releasing around 400 mn metric tons of CO2 equivalent into the atmosphere, the World Bank said.

Enter flare gas-to-energy: Capturing the gas and using it to generate power is increasingly being seen as a solution to the problem of flaring. And as one of the regions most associated with flaring, the Middle East is primed for the technology.

Just five countries account for more than half of all global flaring — and three of them are here in MENA, according to International Energy Agency figures from 2020. The offenders? Iraq, Iran, Algeria, the United States and Russia. Between 2014 and 2018, MENA as a whole accounted for 40% of the world’s flaring, and 75% of MENA flaring is contributed by Iraq, Iran and Algeria, according to Chatham House calculations based on World Bank figures (pdf).

Flare gas could power all of Africa: If the amount of flared gas was used instead for power generation, it could provide some 750 bn kWh of electricity — more than Africa’s current annual electricity consumption, according to the World Bank.

And it’s potentially lucrative: Capturing and selling flared gas could boost MENA’s annual revenues by up to USD 6.4 bn, Chatham House estimated.

Companies are now eyeing MENA as a potential flare gas-to-energy hub: UK power generation equipment provider Aggreko operates flare gas-to-energy projects in the region, including a 165 MW plant in Iraqi Kurdistan, which is set to save some 840 tons of CO2 a day and cut flaring at the Saqala Field by a third. Last week, the company completed a 10 MW flare gas-to-energy plant in Egypt, which is now Africa’s largest. It’s expected to save its client around USD 25 mn a year and reduce its CO2 emissions by some 52.3k tons a year.

DFIs are lending support: The International Finance Corporation (IFC) last year agreed to lend USD 360 mn to the Shell-led Basrah Gas consortium in Iraq to finance a facility to capture and process wasted gas.

The World Bank is pushing on the policy front: In 2015, the World Bank set up the Global Gas Flaring Reduction Partnership (GGFR), a multi-stakeholder trust fund. The governments of Iraq, Kuwait and Algeria are all listed as GGFR partners — committing to end routine gas flaring by 2030.

If the stuff is so valuable, why is the industry flaring in the first place? There are plenty of factors, but the bottom line is that it’s expensive. Capturing gas instead of burning it off means changes to infrastructure on sites — and building new infrastructure to connect the gas to a pipeline (or whatever else the well owner might want to do with it). The gas also needs to be treated to make it useable for power generation — and to make sure it doesn’t gum up pipelines. The economics didn’t work out before, but they could now.

Jordan approved on Monday a national plan that will see the government equip 141 homes with solar panels, according to a statement by the Energy Ministry yesterday. The Jordanian government will pay to equip these solar panels and will also pay for the monthly electricity bills of low-income households benefiting from the project.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Vodafone Egypt now produces eco-SIM cards made entirely out of recycled plastic, according to a company statement picked up by Hapi Journal on Sunday. This would reduce the company’s plastic use by 340 mn tonnes annually. The eco-SIMs will be distributed amongst customers “soon”, according to the statement.
• Egypt’s government will be launching solar-compatible small desalination plants in the country’s Matrouh governorate, according to a statement by the Local Development Ministry yesterday.

South Africa’s Sola and African Rainbow reach financial close on two 100 MW solar projects: South African independent power producer Sola and its shareholder African Rainbow Energy and Power (AREP) have reached financial close on two 100 MW solar projects that they’re providing to US titanium dioxide manufacturer Tronox to power its mines and smelters in South Africa, according to South African media outlet Engineering News. AREP is funding the two projects at a cost of ZAR 4 bn (approximately USD 233 mn).

Background: The power purchase agreements for the projects were signed in mid-March and construction is expected to begin imminently, Engineering News notes. When finished, the projects are expected to provide some 40% of Tronox’s South African electricity needs and reduce its emissions by about 13% compared to its 2019 baseline, the company noted in March.

Meanwhile, Namibia’s Swakopmund green hydrogen plant will start producing energy in 2024, an executive at French independent power producer HDF Energy told Reuters. The plant which is being developed by HDF Energy, is dubbed “Africa’s first green hydrogen plant” by the news agency. The USD 181 mn plant will be powered by 85 MW solar panels and produce 142 GWh, enough for 142k residents. Namibia imports close to 40% of its energy needs from South Africa.

Qatar’s mangroves, or “green fortress,” are making a major comeback, Al Doha News reported. Government efforts over the past three years to plant “nature’s carbon sinks” have led to an increase in the surface area of mangrove swamps to 14k sqm from 9k sqm. Mangroves produce oxygen, protect beaches from erosion, are important for the reproduction of several kinds of fish — and sequester many times more CO2 than do most forests.