The world’s first commercial shipment of blue ammonia is heading to South Korea

Good morning, wonderful people, and happy last day of November. We’re inching closer to the weekend, but Saudi Arabia has already crossed the proverbial finish line for shipping out the world’s first commercial load of blue ammonia, which is on its way to South Korea.

ALSO- Saudi’s Creer is one step closer to their new EV manufacturing factory, having landed the space to build it — and energy giant Acwa Power is continuing its Asian expansion with a 1 GW solar project in Bangladesh.

AND- Rolls-Royce has been making international headlines for its groundbreaking tests for hydrogen fuel to power aircraft jets.

It is, in other words, this morning’s edition is very KSA-heavy. We have chapter and verse on these stories and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- South Korea is wooing Tesla with “tailored” incentives for its EV gigafactory, South Korean President Yoon Suk-yeol told Reuters. In a virtual tête-à-tête with Tesla CEO Elon Musk, Yoon promised to minimize union-related “risks” in the country — a topic the Tesla boss feels strongly about. South Korea has a solid supply chain for EV manufacturing as well as the human resources and work culture to back it up, Bloomberg notes. Musk named South Korea as one of the top candidate locations for its EV gigafactory in a previous call with Yoon.

WATCH THIS SPACE- Lekela is has appetite for more renewable energy projects in MENA and Africa: Independent power producer Lekela is exploring projects in Morocco, Tunisia and Kenya, CEO Chris Antonopoulos told the Africa Report in an interview. Lekela is looking to expand its portfolio in Africa — with an eye to growing in Morocco, Tunisia and Kenya — in addition to its existing projects in South Africa, Senegal, Ghana and Egypt, Antonopoulos said, according to Morocco World News. Lekela is majority-owned by private equity giant Actis.

CORRECTION- This story was updated on 30 November 2022. An earlier version of this story incorrectly stated that Lekela is owned by renewables player Infinity. Infinity and the Africa Finance Corporation have entered into a transaction with private equity firm Actis (which owns 60% of Lekela) and Irish wind / solar developer Mainstream Renewable Power (40%) to acquire 100% of Lekela. The transaction is in progress. 

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CLIMATE DIPLOMACY- The UAE is eyeing renewables investments in Cameroon, WAM reports. UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi led an Emirati delegation to the West African country to explore potential avenues for collaboration as Cameroon seeks to increase its renewable energy contribution to 25% of its energy mix by 2035. It is the third highest ranking African country in terms of hydropower generation capacity.

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THE WORLD CUP TODAY- It’s day 11 of the tournament, in which Group C and D teams are facing off again (all times CLT):

• Tunisia v France (5pm)
• Australia v Denmark (5pm)
• Poland v Argentina (9pm)
• Saudi Arabia v Mexico (9pm)

CIRCLE YOUR CALENDAR-

Oman will host a two-day green hydrogen summit next Monday, 5 December, at Oman’s Convention and Exhibition Center in Muscat. The summit will discuss all aspects of the hydrogen value chain including production, transportation, and storage challenges.

Rwanda is hosting the World Circular Economy Forum from Tuesday, 6 December to 8 December in Kigali. The forum — taking place in Africa for the first time — will shed light on how the circular economy can reduce greenhouse gas emissions, support climate change adaptation, and protect the planet’s biodiversity.

UAE will host the Big 5 global construction impact summit next Wednesday, 7 December at the Dubai World Trade Center, bringing more than 2k exhibitors from 60 countries, as well as regional and global construction industry leaders together to discuss ways to meet local and global net zero and waste reduction targets.

FURTHER DOWN THE LINE- Dubai will be host to the food and sustainability Middle East challenge on 2 March, 2023. The Rome-based European Institute of Innovation for Sustainability is partnering with SDG Global to bring a six-month long, online interactive course to align the region’s food industry with ESG sustainability and development targets. You can register interest in the for-pay course here.

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

Saudi blue ammonia is en route to South Korea: Saudi Aramco and Sabic Agri-Nutrients shipped the world’s first commercial load of blue ammonia to South Korea, Zawya reports. The companies shipped 25k tons of low-carbon blue ammonia to Lotte Fine Chemical (LFC), with the shipment expected to arrive between 9 and 13 December.

It’s not the only shipment South Korea is expecting: Saudi mining company Maaden will also export 25k tons of blue ammonia to LFC by the end of the year.

REMEMBER- Aramco said it was earmarking “multiple bns of USD” in a bid to establish itself as a major blue hydrogen exporter earlier this month. CTO Ahmad Al Khowaiter said export discussions with Japan and South Korea were the ones “farthest along” with Aramco, which had sent test cargoes totaling 40 tons of blue ammonia to Japan in 2020.

Will Qatar be getting in on the export action? State-owned QatarEnergy signed agreements in September to build the world’s largest blue ammonia plant — worth USD 1 bn — which is set to produce 1.2 mn tons of blue ammonia annually, some of which is destined for exports. The plant offers Qatar the chance “to supply differentiated, low-carbon products and fuels to the world,” CEO Saad Sherida Al Kaabi was quoted as saying in a statement.

ENTERPRISE EXPLAINS- Blue ammonia is a carrier for hydrogen, which many in industry are tipping as one of the fuels of the future for hard-to-decarbonize industries. Although not as environmentally-friendly as green ammonia, it’s still seen as a source of clean energy. Unlike conventional production, blue ammonia involves the use of carbon capture, which stores the CO2 underground and prevents its release into the atmosphere. Blue ammonia can be used to produce clean urea fertilizers, to fuel ships, to power cement production more sustainably, and to fire factories.

GO DEEPER — check out our explainer here.

Tadawul-listed Acwa Power is continuing its Asian expansion with a 1 GW solar project in Bangladesh, signing a non-binding MoU with the Bangladesh Power Development Board (BPDB) to develop the plant, the Financial Express reports. Acwa has not made public any financial details or a timeline.

What we know: Acwa Power will bring the technical know-how and line up funding for the project. BPDB will provide administrative support alongside the state-owned Sustainable and Renewable Energy Development Authority.

Acwa Power is aggressively expanding its portfolio: The energy giant expanded its portfolio to 58 GW from 1 GW in under a decade, the Financial Times reports. Recently, the Saudi developer has been investing heavily in a southeast Asian expansion with projects in Indonesia and Thailand, as well as eyeing a 10 GW wind project in Egypt and investing in renewables in Morocco.

And it’s not the only one with ambitions in Asia: Saudi Aramco signed an agreement with Jakarta-headquartered oil company Pertamina to individually conduct feasibility studies on the creation of a hydrogen and ammonia value chain in Indonesia. Emirati renewable energy company Masdar will build a 500 MW wind farm — Central Asia’s largest — in Uzbekistan, with commercial operations expected to start by 4Q 2024.

UAE IS ALSO MAKING MOVES in Bangladesh- UAE State Minister Ahmed Ali Al Sayegh met with Bangladesh’s Premier Sheikh Hasina Wazed in Dhaka last week to discuss cooperation on clean energy and food security, WAM reports.

IN OTHER SOLAR NEWS- Egypt is moving forward on one tender… Egypt’s New and Renewable Energy Authority (NREA) will launch a tender before the end of the year for 200 MW solar projects in Aswan, Amwal Al Ghad reports. The farms will be near the Benban solar park, the newspaper reports. Egypt’s Electricity Ministry is aiming to award the projects to one company able to implement the entire 200 MW generation capacity. NREA is looking to complete the bid submission process and reach financial close on the project in 2023.

…And putting another on ice: NREA has indefinitely postponed a EGP 1.9 bn tender for a 50 MW solar plant, Al Mal reports, citing unnamed sources from Egypt’s Electricity Ministry. The sources cited the country’s recent currency devaluation for not moving ahead on the Kom Ombo solar plant in Aswan, saying the devaluation has affected the cost of implementing the project. The NREA may renew the tender at a future date when USD rates stabilize, the sources said. The ministry had announced plans to tender six solar projects in Aswan to local and international private sector firms this quarter.

REFRESHER- The Central Bank of Egypt adopted a durably flexible FX rate regime last month, as we reported previously. The EGP has since lost c.24% of its value against the greenback, according to market data. The devaluation has further driven up the cost of solar panels, which have been on the rise due to supply chain woes since the beginning of this year, as detailed in a July report by Attaqa.

Saudi Arabia’s first EV company, Ceer, has secured a site for its USD 96 mn electric vehicle factory, the Saudi Embassy in Egypt said in a statement (pdf). Ceer has secured a 1 mn sqm plot in the King Abdullah Economic Center near King Abdullah Port on Saudi’s west coast. Construction is scheduled to begin early next year.

A refresher on Ceer: The Public Investment Fund (PIF) set up Ceer as a JV with Taiwan’s Foxconn Technology Group earlier this month to design, manufacture, and sell EVs in Saudi Arabia by 2025. The factory is expected to attract more than USD 150 mn in foreign direct investment and is expected to contribute USD 8 bn to the country’s GDP by 2034, according to a previous statement. Ceer will also license component technology from BMW for use in the development process and EV models will include sedans and 4x4s, the statement adds.

This is not PIF’s first foray into EVs: The sovereign wealth fund previously invested upward of USD 1 bn in US-based luxury EV manufacturer Lucid Motors as part of the country’s economic diversification strategy. The plant — which began construction earlier this year — will produce 155k vehicles annually by 2025 and 80% of Lucid’s EVs will be produced in Saudi Arabia in 2030.

Could short-haul flights run on hydrogen? Rolls-Royce is testing the use of hydrogen rather than conventional aviation fuels to power jet aircraft, according to a company statement yesterday. The tests — carried out in partnership with budget airline easyJet — aim to test whether a jet engine can be operated to run completely on hydrogen fuel in a bid to cut the aviation industry’s emissions.

Close, but no cigar: The results so far show ​​that jet engines using hydrogen can be started up and run at low speeds, the news outlet reports. Liquid hydrogen — which needs to be cooled to -253°C — requires four times as much space as the traditional aviation fuel used to fly the same distance. It must be stored as liquid and then turned back into gas before being burned as fuel. The aviation industry would need significantly more research and investment to develop an entirely new engine — as well as a complete redesign of the aircraft — to accommodate the use of hydrogen fuel.

REMEMBER- The International Civil Aviation Organization recently agreed to a long-term global goal to make the industry net zero by 2050, with some 184 countries — including almost all of MENA — agreeing to the goal. This would require slashing emissions, accelerating the adoption of new aircraft technologies, streamlining flight operations, and figuring out the role of sustainable aviation fuels (SAFs).

GCC airlines have already hopped on the SAF wagon: Etihad Airways completed its first SAF-fueled flight from Tokyo last month. The airline is looking to slash its 2019 emissions by 50% by 2035 and achieve net zero by 2050, the company’s VP of procurement and supply chain said, according to WAM. Qatar Airways announced the purchase of 5 mn gallons a year of SAF over the next five years from US-based Gevo last month.

If Rolls-Royce succeeds, this could be great news for MENA: The region has been ablaze with green hydrogen news as of late, including Egypt signing nine framework agreements with international power companies at COP27 to establish green hydrogen and ammonia plants to collectively produce up to 7.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year. Saudi Arabia’s Public Investment Fund also inked an agreement last week with five South Korean firms to build a hydrogen and ammonia plant with a generational capacity of 1.2 mn tons annually.

Morocco’s Nomac lands maintenance contract for 8.2 France wind project: French renewables developer 8.2 France has contracted Morocco’s First National Operation and Maintenance Company (Nomac) to inspect and maintain 40 wind turbines at Morocco’s Khalladi wind farm, the company said in a statement. 8.2 France is a subsidiary of energy engineering and services firm Dolfines and Nomac is a subsidiary of Saudi’s A Power Group. The Khalladi wind farm boasts a generation capacity of 120 MW.