Greenifying steel production in Oman + construction in the UAE

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THE BIG CLIMATE STORY- Oman’s Jindal Shadeed Iron and Steel wants to invest USD 3 bn to build a green steel plant in Duqm’s Special Economic Zone. The green hydrogen-powered plant is expected to yield 5 mn tons of steel for automotive products, wind turbines, and other goods.

ALSO- The UAE has executive regulations to make its construction sector greener. The cabinet approved regulations that are designed to lower carbon emissions in the sector.

^^ We have chapter and verse on these stories and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- No single story leads the global climate press today, but Germany’s quest for a greener future got some ink. Germany is planning to draft climate protection contracts with companies in 2023 to rely on renewable energy sources, including hydrogen, Reuters reports. Details of the agreement are still unclear. Germany’s Economy Minister Robert Habeck is also visiting Namibia and South Africa for five days to pursue hydrogen contracts and look at energy cooperation, Bloomberg reports.

WATCH THIS SPACE #1- The IFC will expand funding to renewables: The International Finance Corporation will allocate 35% of its investments towards environmentally-friendly sectors including renewables in MENA and beyond, its head of regional operations for MENA Sufyan Al Issa told Al Arabiya last week. Egypt particularly holds significant potential — having just pledged USD 1.1 bn wind and solar projects in the country from the IFC and others — as well as Jordan, Morocco and GCC countries.

WATCH THIS SPACE #2- Egypt’s Electricity Ministry will start allocating land for the nine green hydrogen projects signed at COP27 within the next few days, Electricity Minister Mohamed Shaker reportedly told local media outlet Al Mal. The cabinet had signed off last week on agreements with international power companies to construct nine green hydrogen and ammonia facilities in the Suez Canal Economic Zone, which were made during last month’s climate summit and could require as much as USD 83 bn to complete. The facilities would collectively produce up to 7.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year when fully operational.

CORRECTION- In our coverage of COP27, we incorrectly stated that the loss and damage fund COP27 delegates agreed to establish will see developed countries contributing USD 100 bn per year to support vulnerable countries. The size of the landmark fund has not been agreed upon. The USD 100 bn figure is a previous, unfulfilled pledge for developed countries to pay to developing countries for climate mitigation. The story has been updated on our website.

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CLIMATE DIPLOMACY- Jordan has agreed to cooperate with Norway in the fields of renewable energy and green hydrogen, the Jordan News Agency (JNA) reported on Saturday citing Jordan’s Energy and Mineral Resources minister Saleh Kharabsheh. Discussions included the prospect of exporting clean energy to Europe via a MENA-Europe interconnection and exploring investment in green hydrogen and renewable energy, it quotes Kharabsheh saying.

HAPPENING TODAY-

Oman is hosting a two-day green hydrogen summit today 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.

WORLD CUP-

It’s day 16 of the World Cup and the third day of the knockouts (all times CLT):

• Japan v Croatia (5pm)
• Brazil v South Korea (9pm)

CIRCLE YOUR CALENDAR-

Rwanda is hosting the World Circular Economy Forum from tomorrow until Thursday 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 this 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.

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

Oman’s Jindal Shadeed Iron and Steel (JSIS) will set up a USD 3 bn green steel plant in Duqm’s Special Economic Zone (SZE), Bloomberg reports. The plant is expected to yield 5 mn tons of steel annually, which will be used for automotive products, wind turbines, and consumer goods industries, Jindal Shadeed CEO Harssha Shetty tells the business information service. The facility — for which land has been allotted — will be powered by green hydrogen and is set to be completed by 2026.

Where is the money coming from? “The company, in due course, will evaluate the optimum mix of debt and equity to maximize shareholder value and minimize cost of capital,” Shetty told Bloomberg.

Where is the supply headed? The plant’s output will be primarily geared towards export to the Middle East, Europe, and Japan, with some 30-40% earmarked for consumption in Oman and the wider GCC region. Shetty expects demand for flat steel in the GCC to grow to 11 mn tons in 2030, up from 7.2 mn tons in 2021.

Green steel is on the regional radar: Brazil’s Vale signed an MoU with Saudi Arabia’s Future Investment Initiative in November to study the establishment of a USD 1.1 bn iron ore pellet mega hub powered by greener alternatives. Vale also signed MoUs with the UAE and Oman for similar projects.

SOUND SMART- The iron and steel sector is the largest industrial producer of CO2 — other than industries involved in power generation — and accounts for some 7-9% of all direct fossil fuel emissions.

The UAE cabinet approved yesterday regulations designed to lower carbon emissions in the construction sector, according to a statement. The National Building Regulations and Standards had been in the works since the Dubai Expo 2020 back in March, according to Hapi Journal.

In detail: The regulations and standards include “sustainability guides for buildings, roads, housing, and a National Guide for Building Sustainability in operation and maintenance,” the statement says. Implementing these new guidelines — the mechanism for which have not been disclosed — are expected to reduce the construction industry’s CO2 emissions by 5%. They are expected to cut back on natural resources and material use in the industry by 15%, lower energy consumption for the construction of roads by 45%, reduce the energy needed for constructing buildings and homes by 25%, and cut 16% of the country’s overall water utilization rates, according to the statement.

The UAE also launched an online investment vehicle for FDI inflows in the UAE, including renewable energy and smart city projects, the statement notes. The investment tool — which the UAE cabinet is likening to an investment compass — will provide intel to foreign investors on how to invest in ongoing and future renewable energy projects.

Morocco’s Mohammed VI Fund is 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 last week. The country expects to raise USD 4.2 bn locally and the remaining USD 8-10 bn from Europe and the GCC, the minister added.

Where the money is going: The fund will finance large investment projects through public-private partnership frameworks and will invest in small and medium enterprises. The fund will also dole out loans to companies that operate in “high-return sectors,” according to Asharq.

This is all with an eye to raise private sector participation in Morocco’s economy, with a focus on green projects and renewables, Jazouli said. The Kingdom is looking to double the private sector’s contribution to the country’s economy to two-thirds, up from one-third currently.

REFRESHER- Morocco is a green investment magnet from regional + non-MENA players: Egypt’s Hassan Allam Holding is mulling investing USD 50-150 mn in Moroccan renewable energy and desalination projects within the next year, while Egypt’s Orascom Investment Holding (OIH) is eyeing an initial USD 100 mn investment in renewable energy, EV charging stations and agro-industrial sectors in the North African country. Independent power producer Lekela is also exploring projects in Morocco, its CEO Chris Antonopoulos told the Africa Report in an interview last month. Indian conglomerate Adani Group also signaled potential investments in renewables projects with a combined 10 GW capacity in Morocco to supply green ammonia to Europe last October.

BIG INDUSTRY PLAYERS WANT TO POWER UP WITH RENEWABLES-

Morocco’s OCP to invest USD 12.3 bn to greenify its operations by 2027: Moroccan state-owned fertilizer manufacturer OCP Group is earmarking USD 12.3 bn to invest in solar and clean energy projects as it looks to rely entirely on renewables to power its facilities by 2027, OCP CEO Mostafa Terrab said in a meeting with Moroccan King Mohammed VI (watch, runtime: 5:48). OCP’s push to accelerate renewables-driven production capacity will reduce its considerable reliance on foreign imports of ammonia for fertilizer manufacturing by producing more green ammonia, Terrab said. The company’s ammonia imports totaled USD 1.65 bn in the first ten months of 2022, Terrab said.

AND WATER SCARCITY IS GETTING A FUNDING INCREASE-

Morocco announced plans to increase investments in its water program by over 30% to USD 14 bn over the next five years to shore up potable water and irrigation needs, Bloomberg Asharq reports, citing a statement from the water program’s steering committee. Morocco is one of the world’s most water-stressed countries, according to a World Bank report earlier this year, and is experiencing its fifth consecutive year of drought.

Who will provide the minerals needed for the renewable energy transition? KSA is pushing to position itself as a global leader in minerals and metal production, Saudi Gazette reports. The country is well placed to provide some of the metals and minerals most essential to the energy transition, Saudi Vice Minister of Industry and Mineral Resources for Mining Affairs Khalid Saleh Al Mudaifer said at a recent Mines and Money conference.

Which minerals and metals are we talking about? Cobalt, copper, nickel, lithium, manganese, silver, zinc, neodymium, and dysprosium are all drivers of the global energy transition, notes the International Energy Agency. KSA has significant potential in extracting and refining precious and base metals like zinc, copper, and silver, along with certain specialty metals like niobium and tantalum, Al Mudaifer noted.

Globally, we’ll see massive demand… Over 3 bn tons of minerals and metals will be needed if the world is to make use of wind, solar, and geothermal power — and store energy effectively — to keep global warming to below 2°C, notes a 2020 World Bank report (pdf) cited by Al Mudaifer. Production of key minerals used in clean energy could increase by some 500% by 2050, it adds.

…And substantial investment: Some USD 1.7 tn will be needed in global mining investment to meet this demand, the World Bank estimated this year. US President Joe Biden recently doled out USD 2.8 bn in grants for companies to domestically extract and process lithium, graphite and nickel, as part of his administration’s EV production push.

It’s not just Saudi Arabia: Morocco has reserves of manganese, silver, copper, and cobalt currently being explored. “A vast, new and largely untapped minerals super-region is emerging, stretching from Africa to central Asia,” Saudi Gazette quotes Al Mudaifer as saying. The Tethyan mineral belt — which traverses KSA — is likely to have “considerable deposits” of copper, lithium, and other materials, with much of it “underexplored compared to mining zones in the Andes or Africa” — often hailed as the world’s metals and minerals hotspots.

International players are already showing interest: Moroccan mining firm Managem agreed in June to supply Renault with 5k tons of cobalt sulfate — to be used in EV production — for seven years starting in 2025. In Egypt, Australian mining firm Fortescue Future Industries is reportedly eyeing the extraction of rare earth minerals, including silica — used to produce solar panels. The EU recently announced plans to sign MoUs with Morocco and Algeria, as well as several other African countries, to procure raw materials for renewables projects.

And there’s a strategic shift already underway: KSA intends to award over a dozen mining exploration licenses to international investors and attract some USD 32 bn in investment in its mining and mineral sector, Mining Minister Bandar Al Khorayef said in November. In September, it awarded a license for the exploration of a mine with copper reserves worth an estimated USD 222 bn. Ultimately, it’s looking to unlock an estimated USD 1.3 tn in mineral reserves, Al Khorayef said at the time. KSA is also undertaking important regulatory and legislative steps that will attract investment to its mining sector, co-chairman of the Canadian Ivanhoe Mines Company Robert Friedland reportedly said recently.

But environmentally speaking, there’s much at stake: Although the demand for minerals and metals offers potential economic benefits for resource-rich countries, their extraction and production could cause huge environmental damage — including exacerbating existing water scarcity and significantly increasing emissions — if steps aren’t taken to minimize the climate footprint, the World Bank warns.

Egypt is setting up a new waste-to-energy project in Abu Rawash: Renergy Group Partners, a joint venture between Egypt’s National Organization of Military Production and Green Tech Egypt, is working to set up a waste-to-energy project in Abu Rawash city, the country’s Environment Ministry said in a statement. The plant is expected to convert some 1.2k tons of municipal solid waste per day to 30 MWh of electricity.

Etihad Cargo helps Denmark’s DSV offset emissions through SAF “book and claim” purchase: Etihad Cargo, the logistics and cargo arm of Etihad Aviation Group, transported a cargo shipment for Denmark’s DSV Global using sustainable alternative fuels (SAF), Etihad Cargo said in a statement. The shipment, which was facilitated under a “book and claim” system, essentially allowed DSV to claim the carbon offset benefits of using SAF. The Danish logistics player purchased the SAF to fuel Etihad Cargo’s first transatlantic net zero flight on its Boeing 787, dubbed “Greenliner,” which was recently spotted at COP27.

Though demand for SAFs is growing, its high cost compared to conventional jet fuel is a major impediment to widespread uptake, notes a recent report (pdf) from the Riyadh-based King Abdullah Petroleum Studies and Research Center. International organizations like the International Air Transport Association have set highly ambitious emissions-reduction goals for the aviation sector — “that might be beyond the reach of current technologies,” the report adds.

SOUND SMART- SAFs are low-carbon alternatives to traditional jet fuel made of mustard seeds, soy beans, and non-edible oils, according to Honeywell Aerospace.

Meet Glen, the troublemaking Scottish osprey: GPS-tracked Scottish Osprey Glen is alive and well after he had researchers worried when his tracker went offline for 36 hours during a migration, the BBC writes. Glen resurfaced after a 36-hour flight to Morocco, blowing a sigh of relief amongst the researchers collecting data from his flights through the tracker.

This isn’t Glen’s first shenanigan during his migration: The osprey had previously hitched a ride on two different cargo ships in September to make his migration easier. During his trip, he also narrowly escaped being blown onto the sea by the wind direction, and miraculously landed close to a small, rare desert oasis in Morocco. Throughout it all, he’s giving (metaphorical) miniature heart attacks to the researchers following his route.