KSA and China sign carbon capture, clean energy, hydrogen, and EV agreements

Good morning, wonderful people. We’re starting the week with an offering of kudos to Morocco’s national football team for being the first Arab and African team to ever make it to a FIFA World Cup semifinal match. We tip our hats to every player on the team for their spectacular performance against Portugal, especially Youssef En Nesyri, whose header on Saturday secured Morocco’s place in the next stage of the game in Qatar. Morocco will play against France on Wednesday at 11 pm Dubai-time — we’re rooting for you, Atlas Lions.

THE BIG CLIMATE STORY- Saudi Arabia and China signed a plethora of agreements across several sectors, including renewable energy and EVs. Acwa Power, Aramco and Sumou were all active during the Chinese President’s Xi Jinping’s visit to Saudi Arabia last week.

ALSO- Masdar just got more shareholders: The UAE’s Abu Dhabi National Energy Company (Taqa) and Abu Dhabi National Oil Company (Adnoc) bought stakes in sovereign wealth fund Mubadala’s clean energy firm Masdar.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- The EUR 2.5 bn Barcelona-Marseille undersea hydrogen pipeline will come online by 2030, Euronews reported yesterday. The H2MED pipeline is projected to transport up to 2 mn tons of hydrogen a year. Spain, Portugal, and France who are partners on the project will present it as a “project of common interest” to receive up to half of its cost from the EU, according to President Emmanuel Macron.

The path to a “real European hydrogen backbone”: Europe — who is expediting its energy transition — is looking to produce 10 mn tons of renewable hydrogen in the EU by 2030, as well as import an additional 10 mn, European Commission President Ursula von der Leyen said.

Hydrogen was a major topic at our Enterprise Climate X Forum last week in Cairo, where Egypt is looking to emerge as a global center of the hydrogen economy (here and here).

WATCH THIS SPACE #1- Speaking of hydrogen: BMW is testing MENA’s first zero-carbon SUV in 2023. German automaker BMW kicked off production of its hydrogen-powered iX5 Hydrogen and will start testing its new net zero car in select regions starting 2Q 2023, The National reports. The specific MENA countries the vehicle will be released in have not been disclosed yet.

WATCH THIS SPACE #2- KSA and Korea ink renewables trade agreement: Saudi Arabia’s Saudi EXIM has signed an MoU to export green hydrogen and ammonia to the Korea Trade Ins. Corporation (K-Sure), according to a Saudi Press Agency statement released last Thursday. No financial details are known yet.

The Korea-Saudi energy trade is on the rise: Saudi Aramco and Sabic Agri-Nutrients shipped the world’s first commercial load containing 25k tons of blue ammonia to South Korea last month, and Saudi mining company Maaden is also expected to export a similar shipment of blue ammonia to the East Asian country by the end of the year.

WATCH THIS SPACE #3- The Emirates Water and Electricity Company (Ewec) is auctioning clean energy certificates until this coming Wednesday, 14 December. The state-owned company — the exclusive vendor of nuclear and solar-produced electricity in the UAE — is selling digital certificates to certify the source of renewable energy usage and allow companies to back up ESG goals. Emirates Global Aluminium purchased 1.1 mn MWh of clean energy certificates from Ewec in November.

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HAPPENING TODAY- The Saudi Arabian Energy Ministry’s Smart Grid Conference kicks off today and runs through this Wednesday, 14 December at the Riyadh Hilton Hotel. This year’s edition will include 247 workshops covering topics like renewable energy and grid integrations, and new trends and tech solutions in smart grids. You can register for the event here.

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GRAPH OF THE DAY- Light travels faster than wind: Solar power as an energy source is likely to surpass coal, natgas and hydropower by 2027, according to the International Energy Agency’s Renewables 2022 report (pdf). Renewable energy sources will make up about 40% of electricity output worldwide by the end of 2022. Wind seems to be the second fastest growing source of energy production, while bioenergy is going to be making minimal progress in the next five years.

MENA is expected to triple its renewable energy expansions to 45 GW in the next five years compared to the last five years, the report says. Saudi Arabia, the UAE, Israel, Oman, Morocco, and Egypt are set to make up 85% of the region’s renewable energy capacity growth in the coming five years. About 75% of that expansion focuses on solar energy, but there are six markets that are doing the heavy lifting.

ICYMI- The IEA report is full of feel-good news including highlights like the decline of green technology costs, the booming of climate VCs, and the rise in EV sales. Check out this Twitter thread for more genuinely good climate news from the IEA report.

STAY TUNED- Tomorrow’s edition of Going Green in EnterpriseAM will go deeper into the report.

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CLIMATE DIPLOMACY- The UAE and Israel formalized their trade agreement and will ramp up cooperation in the renewables sector, Emirati Foreign Trade Minister Thani Al Zeyoudi tweeted yesterday. As of September, non-oil trade between the two countries reached USD 2 bn and is expected to expand further after the ratification of the Comprehensive Economic Partnership Agreement, Al Zeyoudi added. The agreement was signed back in May and reduces tariffs on the vast majority of traded goods between the partners.

CIRCLE YOUR CALENDAR-

Tunisia will host the International Renewable Energy Congress from tomorrow to Thursday, 15 December in Hammamet. The event will provide a platform for researchers and industry leaders to showcase trends in the renewable energy sector.

FURTHER DOWN THE LINE- Saudi Arabia will host the Future Minerals Forum on Tuesday, 10 January to Thursday, 12 January at the King Abdulaziz International Conference Center. The forum will discuss the region’s critical minerals supply and creating resilient and responsible minerals value chains for the energy transition.

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

Saudi and China sign 34 investment agreements: Saudi Arabia and China signed a series of agreements during Chinese President Xi Jinping’s three-day visit to the Kingdom last week — several of which focus on green energy, according to SPA. The countries also agreed to hold leadership summits every two years, in a meeting between Xi and Saudi Crown Prince Mohammed bin Salman, Bloomberg noted on Thursday.

Acwa Power’s going big on clean energy partnership with Chinese firms: Saudi renewables player Acwa Power signed nine MoUs with Chinese entities in financing, investment, construction, and engineering and equipment procurement for its clean energy projects in both Saudi Arabia and the countries in China’s Belt and Road Initiative, it said in a statement.

In detail: Acwa Power signed a USD 1.5 bn agreement with Power China that will see the two companies work together on infrastructure and services for Saudi Arabia’s Red Sea Project, Al Arabiya quotes Acwa Power China Vice President and Chief Representative Yunhe Lyu as saying, without providing further details. Acwa had previously signed a 25-year utilities concession agreement for the “construction, engineering, operations, and maintenance of the plants delivering power” under a build-own-operate-transfer project. Acwa also reached a preliminary agreement with an unnamed Chinese agreement to develop 3.2 GW of solar power in an unspecified location, Yunhe said. The final contracts for the project are set to be signed before the end of the year and implementation is expected to begin next year.

And Aramco wants to collaborate on hydrogen and carbon capture: Saudi oil company Aramco signed an MoU with China’s state-owned coal mining company Shandong Energy to cooperate in technologies ranging from renewables to hydrogen and carbon capture and storage, WAM reports.

There’s also a new EV factory in the works: Saudi-based institutional investor Sumou signed an MoU with China’s Enovate to set up an EV factory in Saudi with the capacity to produce some 100k cars per year, Reuters notes.

UAE’s Mubadala sells majority stake in Masdar to Adnoc and Taqa: The UAE’s Abu Dhabi National Energy Company (Taqa) and Abu Dhabi National Oil Company (Adnoc) have completed a transaction to purchase stakes in sovereign wealth fund Mubadala’s clean energy firm Masdar, according to a joint statement. Taqa paid USD 1.02 bn for its stake, the statement noted.

How the ownership breaks down: Taqa will hold a 43% stake in Masdar’s renewables business, while Mubadala is retaining its 33% stake and Adnoc will take 24%, the statement notes. In Masdar’s nascent green hydrogen business, Adnoc will own a 43% stake, Mubadala will own 33% and Taqa 24%, it adds.

And the plan is to grow the company both within and beyond MENA: The firm is aiming for a renewable energy capacity of at least 100 GW by 2030 with a production quota of up to 1 mn tons of green hydrogen, the statement notes. It ultimately plans to expand its renewable energy portfolio to over 200 GW, it adds, without giving a time frame for this target.

Masdar already has a strong footprint — and has recently signed a slew of fresh agreements: The company is active in over 40 countries in six continents, and has developed and invested in projects with a combined value of more than USD 20 bn. Alongside Infinity Power and Hassan Allam Utilities, Masdar signed an agreement at COP27 last month to build a 10 GW wind farm in Egypt — which could be one of the world’s largest. The three companies also went big on green hydrogen, inking an agreement to establish a facility with production capacity of 480k tons of green hydrogen a year. Masdar is building a 100 MW solar plant in Turkmenistan, entering the country for the first time. This follows an announcement in September that it’s building a 500 MW wind farm in Uzbekistan, at an anticipated cost of USD 600 mn. Masdar, along with waste management company Bee’ah and France’s Veolia Middle East, will also operate and maintain the Sharjah waste-to-energy plant for 25 years.

Nigerian fintech mobility startup Moove is raising USD 30 mn from a sukuk issuance to boost its expansion in the UAE with some 2k ride-hailing EVs in the coming year, according to a company statement. The issuance was arranged by US-based investment firm Franklin Templeton Investments and comes less than two months after Moove closed a GBP 15 mn fundraising round to expand operations in the UK.

SOUND SMART- Sukuk are a sharia-compliant bond-like financial instrument based on an underlying asset, which generates a return or “income rate” for an investor. Moove is issuing “istisna” sukuk, which are typically used for manufacturers. You can dive deeper with this nifty explainer from EnterpriseAM.

Who is Moove? The company is the world’s first mobility fintech which acts as a vehicle financing platform for mobility entrepreneurs, according to its website. Launched in 2020, the Nigerian startup is now Uber’s largest vehicle supply partner in EMEA and provides royalty-based financing to drivers of ride-hailing and delivery firms. The company provides loans to purchase or rent vehicles and enrolls drivers on Uber’s platform, subtracting rental fees on a weekly basis from their paychecks. Moove also works with Egypt-born mass transit app Swvl and Kenyan trucking and logistics startup Sendy.

A fast expansion with big EV plans: Initially launched to address a lack of access to vehicle financing in Lagos, Moove has scaled to 13 markets across nine countries — including Egypt, Kenya, South Africa, and India — in 2022 with a commitment to ensure at least 60% of the cars it financed are EVs. The planned 2k EV fleet in the UAE will offset some 5k tons of CO2 emissions, helping Dubai realize its net zero emissions target by 2050, the statement notes.

And there’s more: The startup also plans to launch an EV charging platform — the Moove Charge app — as part of its UAE expansion, allowing users to find the locations and availability of charging stations compatible with their EVs on an app.

Countries from the Global South are railing against “biopiracy”: COP15 is seeing heated debate around the topic of “biopiracy” — where wealthy countries extract biological resources from the Global South, which they then use for medical, agricultural or industrial purposes for their own benefit, France24 reported on Friday.

What’s the problem? Tech developments like digital sequencing information (DSI), where genetic data from bioresources are digitized and stored online, are making it easier for big pharma companies to hoard income from products derived from biological material extracted from countries in Africa, Latin America, and the Caribbean, some have argued, the media outlet notes.

It’s all leading to a stalemate around the COP15 common agreement: Countries from the Global South are reportedly saying they won’t agree to the global diversity framework, which is the goal of COP15, unless there are specific provisions for them to receive benefits from DSI, German researcher Amber Scholz is quoted by France24 as saying. But countries in the Global North are saying they won’t agree to an agreement on DSI if countries in the Global South don’t agree to the framework, Scholz adds.

Could a proposed tax on biodiversity-related products help? Before COP15, a group of African countries proposed a 1% tax be levied on the retail prices of all biodiversity-related products — in a move that Scholz terms “revolutionary,” France24 notes.

IN OTHER COP15 NEWS-

UNEP + partners launch three-year project to support cities in biodiversity work: UNEP has launched a new project designed to support cities in taking action on ecosystem restoration, according to a UNEP statement. The project — funded by the German Federal Ministry of Economic Cooperation and Development — will run from 2023-2025 and aims to engage policymakers, businesses and financial institutions.

This comes after calls for more financing for ecosystem restoration projects. They want the global finance community and governments to reform financial infrastructure and work with the private sector in order to fund nature-based solutions that would halt and reverse nature loss. Until now, this kind of nature investment has gone to national governments, who then distribute it to cities, the statement notes.

Be the birds you wish to protect: Hundreds of activists dressed as birds, caribou, and trees costumes marched in COP15 host city Montreal to call for a strong agreement that would safeguard nature globally, Reuters reports. The aim of the protest is to ensure the outcomes of the conference would protect some 1 mn threatened species of flora and fauna, the newswire notes.

The sense of urgency: Animal populations have dropped nearly 70% on average since 1970, according to a World Wide Fund for Nature (WWF) report released in October. The WWF had issued a dire warning about biodiversity loss, underscoring the calamitous side effects of deforestation, industrial pollution and extreme weather have had on 32k populations of 5.2k animal species they had scrutinized over the past 50 years.