Saudi Investment Recycling Company acquires 60% of plastic recycling company Masab

Good morning, ladies and gents. As we enter the homestretch before Ramadan, the regional updates appear to be slowing down but there are still a few stories making headlines.

THE BIG CLIMATE STORY- The Saudi Investment Recycling Company — a wholly owned subsidiary of KSA’s sovereign wealth fund the Public Investment Fund — acquired a 60% share in Masab Plastic Factory Company, and Lebanese SMEs will get a boost from a new USAID fund aiming to bring solar power to the country. We have all the details on these stories and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- EU reveals Net Zero Industry and Critical Minerals Acts to rival Chinese dominance: The European Commission is looking to source at least 40% of the bloc’s clean technologies domestically by 2030, as part of its newly proposed Net Zero Industry Act. The commission also proposed a target to shore up at least 10% of its annual rare earths demands domestically as part of its Critical Minerals Act in a bid to wean the bloc off Chinese dependency in the energy transition.

The story has been making the rounds: Bloomberg | Reuters | Financial Times | Washington Post | Wall Street Journal.

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HAPPENING TODAY- Denmark is kicking off the Copenhagen Climate Ministerial today and continues tomorrow in Copenhagen marking the first political high-level gathering to follow-up on the COP27 summit’s conclusions and agreements. Denmark and co-hosts Egypt and the UAE will host talks to establish continuity between the last climate summit and November’s COP28, and progress on how targets align with the Paris agreement. Over in Germany, The Infrastructure Investor Global Summit also kicks off today and carries through to Friday in Berlin gathering industry leaders from the global infrastructure sector to map out a course for the industry to upscale its ESG-focused operations and investments.

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OVER IN COP LAND- IEA prepping COP28-linked special report: The International Energy Agency (IEA) is in the process of writing a special report to be published ahead of COP28 on the role of oil and gas producers in the transition to net zero emissions, according to a statement released last week. COP28 President-Designate Sultan Al Jaber presented his vision for the UAE’s presidency in a roundtable discussion hosted in Paris with representatives from over 50 countries invited to share thoughts regarding Al Jaber’s vision for COP28. During his visit, Al Jaber met with French President Emmanuel Macron and French Economy and Energy Transition Minister Agnès Panet-Ronache, as well as government and civil representatives working on climate matters, Wam reported.

ALSO- Al Jaber launched the International Youth Climate Delegate Program in partnership with YOUNGO, according to a tweet last week. Al Jaber stressed the importance of young people’s involvement to reach “comprehensive action for the planet.” YOUNGO consists of a large number of youth-led organizations, groups, and individuals working to address climate change.

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WATCH THIS SPACE #1- Nuclear energy on the moon? Rolls-Royce secured some USD 3.5 mn in funding from the UK space agency to finance its project to install small modular nuclear reactors on the moon, CNBC reports. The company hopes to get a small nuclear reactor ready by 2029 to provide a continuous source of energy for astronauts on lunar missions. Rolls-Royce is partnering with researchers from the University of Oxford, and the University of Sheffield’s Advanced Manufacturing Research Centre and Nuclear AMRC on their Micro-Reactor Program.

WATCH THIS SPACE #2- Nuclear energy is considered “green” as the UK looks to lock in private sector investment: The UK government is set to include nuclear production tech in its green investment rulebook, UK Chancellor Jeremy Hunt said during a speech last week. The UK is looking to draw private sector investment into the nuclear sector in a bid to build small and large modular reactors, offering incentives similar to those other renewable energy developments, Hunt said. A new nuclear program — Great British Nuclear — will work on bringing down nuclear production costs, facilitate investments into the sector, and address market constraints in line with the country’s target to source 25% of electricity demand from nuclear by 2050. The move follows an EU decision last year to count the energy source toward its renewable energy production targets.

REMEMBER- EU countries remain divided on the role of nuclear energy. Debate over whether nuclear-derived hydrogen should be allowed to count towards the EU’s renewable energy generation targets has delayed the finalizing of a text outlining the EU’s diplomatic priorities ahead of COP28 — which was supposed to be agreed on by member countries in February and has been delayed with no updates. France has been attempting to rally support for the inclusion of nuclear power as a low carbon energy source in EU policies, seeking a nuclear alliance to counter German, Spanish, and other EU opposition to nuclear’s incorporation.

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WATCH THIS SPACE #3- Shell excluded end-user emissions from its climate targets, failing to account for 95% of its emissions, Reuters reported last week citing Shell’s 2022 Energy Transition Progress Report. A group of Shell’s shareholders have called on the energy company to set ambitious targets to reduce their Scope 3 emissions — emissions from the end-users of Shell’s energy products. Shell opted to reject the request, citing a possible loss of customers to competition as a reason for their decision. “The Board has considered setting a Scope 3 absolute emissions target, but has found it would be against the financial interests of our shareholders and would not help to mitigate global warming,” company chair Andrew Mackenzie said in the report. The topic of having Scope 3 emission as part of Shell’s emission targets is “the focus of some of the climate litigation against [the company],” the report adds. The rejection of the stricter emission targets comes a couple of weeks after Shell said it was reviewing its plans to slash its oil output and noted that it may backtrack on its oil slashing target depending on “right market guidance.”

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THE DANGER ZONE- “No person, place, economy or ecosystem will be spared”: Fresh water demand is projected to surpass availability by 40% by the end of the decade, experts warn in a new report (pdf) published by the Global Commission on the Economics of Water. The document outlines seven points for collective action in order to achieve water security including an increase of investments in water management through public-private partnerships, pricing water appropriately, and creating equitable partnerships to raise money for water projects in low- and middle-income nations.

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CLIMATE DIPLOMACY- UAE + Georgia finalize comprehensive economic partnership agreement: The UAE signed a trade agreement with Georgia on Friday to expand bilateral investments in key sectors including renewable energy, agriculture, and transport, Wam reports.

ALSO- UAE, Korea discuss renewables investments: Emirati Energy Minister Suhail bin Mohammed Al Mazrouei met with Korea’s Trade Minister Dukgeun Ahn to discuss potential joint investment in food security, tech, and trade as part of the UAE’s plan to invest some USD 30 bn in the Korean market, according to a statement released on Thursday. The pair also discussed potential projects in the water and energy sectors.

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CIRCLE YOUR CALENDAR-

Italy will host the energy transition expo K.EY from Wednesday, 22 March to Friday, 24 March in Rimini. The event will gather experts in the fields of science, technology, and business to host energy-related discussions on technologies and services that direct a shift towards a carbon-neutral economy.

The US will host the UN Water Conference from Wednesday, 22 March to Friday, 24 March in New York. The conference is a midterm review of the International Decade for Action on Water for Sustainable Development launched in 2018.

The first MENA Solar Conference is accepting applications from published researchers specialized in PV technology until Sunday, 30 April. The Dubai Electricity and Water Authority will be hosting the conference from 15 to 18 November, in conjunction with the Water, Energy, Technology, and Environment Exhibition and the Dubai Solar Show 2023. Researchers can submit their papers here.

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

SIRC becomes a majority shareholder in Masab: The Saudi Investment Recycling Company (SIRC) — a wholly owned subsidiary of KSA’s sovereign wealth fund the Public Investment Fund — acquired a 60% share in Masab Plastic Factory Company, the Saudi Press Agency reported.

About Masab: Masab collects plastic scrap materials from households and recycles them into secondary raw materials (recycled materials that can be used in manufacturing processes) mostly for export purposes. The company specializes in the export of PET flakes — small fragments of plastic waste cut up and crushed, then heated and molded into a variety of shapes, usually plastic bottles. Masab caters to fiber and bottle manufacturers in Australia, India, Thailand, Turkey, and the UK.

SIRC is on a roll: SIRC signed an agreement with Saudi Arabia’s state-owned National Agricultural Development Company (Nadec) in February to jointly recycle 400k tons of biowaste annually with the goal of converting the refuse into organic fertilizers.

And there’s plenty of plastic to recycle: Saudi Arabia alone accounts for over 67% of GCC plastic resins production, a market overview by the Saudi Plastics & Petrochemicals Trade Exhibition revealed. The country also accounts for 61% of polymer demand in the GCC — the largest in the region. The consumer packaging industry is at the forefront of polymer use, with the construction sector trailing behind.

The move may help work toward KSA’s Circular Carbon Economy National Program: The kingdom published targets to divert 82% of all landfill waste in October, earmarking USD 27-32 bn to recycle 42% and compost 35% of its waste by 2035. PIF intends to invest USD 11 bn by 2035 to increase recycling, with the support of SIRC.

USAID launches fund to support Lebanese renewables development: The United States Agency for International Development (USAID) has launched a USD 20 mn Solar and Renewable Energy Fund to help spur private sector investments to finance the cost of solar power installations for Lebanese SMEs, the US embassy in Lebanon said in a statement on Friday. The fund was created through USAID’s Trade and Investment Facilitation (TIF) Activity and Lebanon Investment Initiative (LII), the statement notes.

Who’s paying what: Through TIF and LII, USAID will commit USD 4 mn in seed funding and USD 500k to structure the fund with the remaining USD 15.5 mn drummed up from investors, the statement notes.

How it will help: The fund will help SMEs secure investments for renewable energy to maintain operations and boost export capacity, the statement notes. Up to 25 companies will benefit from the fund’s resources in the first round of financing.

The battle against emissions and a dire power crisis: There has been a spike in the use of diesel-powered generators in Lebanon in recent years as a response to the power crisis, with levels of toxic emissions estimated to have quadrupled since the start of the country’s economic crisis.

Japan’s SkyDrive will test eVTOLs in Dubai: Japanese electric vertical take-off and landing (eVTOL) aircraft manufacturer SkyDrive signed an agreement with Canadian air mobility infrastructure developer Vports to test and develop eVTOLs at Vports’ flight testing site in Dubai, according to a company statement released last week.

The details: SkyDrive will use the 37k sq meter eVTOL air traffic corridor in Dubai to trial and enhance the SD-05 — a two-seater zero-emissions eVTOL — in line with its target to get some 1.5k all-electric flying cars off the ground by 2045. The eVTOL is set to be rolled out in 2025.

Background: Vports signed in December a 25-year lease agreement with the UAE’s General Civil Aviation Authority and the Mohammed bin Rashid Aerospace Hub to build a 37k square meter eVTOL flight testing site at an initial investment of USD 40 bn over the next three years. The center — which is expected to become operational in 2024 — is expected to generate some USD 7 bn in direct revenues over the lease’s lifecycle.

eVTOLs are drawing interest in the UAE: Abu Dhabi-based charter flight operator Falcon Aviation Services partnered with electric aircraft company Eve Holding in April 2022 to supply 35 flying taxis with deliveries expected to start in 2026. Chinese eVTOL manufacturer AutoFlight signed this month a partnership agreement with airfleet management firm Evfly that will see it roll out 10 of its AutoFlight Prosperity I aircrafts in the UAE and Saudi Arabia, Arabian Business reported. The country also granted US logistics firm United Portal Services a temporary flight permit to conduct flight tests to trial its eVTOL fleet in the UAE, Gulf News reported this month.

Air Products Qudra to build Neom’s first hydrogen fueling station: Air Products Qudra — a JV between US-based gas supplier Air Products and Qudra Energy — inked an agreement with Neom subsidiary Enowa to build, own, and operate Neom’s first hydrogen fueling station, Zawya reports. The timeline and investment ticket of the project were not disclosed. Air Products is also part of the JV developing Neom’s USD 8.5 bn green hydrogen project alongside Saudi Arabia’s Acwa Power and Neom.

Oman’s Be’ah partners with Sultan Qaboos University on biogas and waste management: The Oman Environmental Service Holding Company (Be’ah) signed two agreements with the country’s Sultan Qaboos University (SQU) to establish a waste recycling facility on SQU’s campus in Muscat and develop an on-site waste-to-energy biogas production facility, Oman News Agency reported last week.

Details: The reuse center will repurpose single-use plastics and materials in a bid to minimize landfilling, the news agency notes. The biogas production plant’s location, price tag, and planned launch date were not disclosed, but ONA notes the low-carbon fuel would be used for electricity and fertilizer production.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Saudi AgTech start-up Red Sea is partnering with Saudi’s Public Investment Fund to build greenhouses across 12 cities in the kingdom. The agreement will cover the joint design, development, and operation of the greenhouses in a bid to support sustainable agricultural practice. (Trade Arabia)
• UAE food manufacturer IFFCO Group opened the region’s first plant-based beef factory in Dubai. The Thryve factory is expected to support a more sustainable food supply chain through innovation. (Statement)
• The UAE’s new Circular Packaging Association (CPA) made its formal debut on Saturday. The CPA aims to lessen the industry’s environmental effects by limiting waste and advancing the circular economy. (Statement)

Three out of four projects approved by the OPEC Fund for International Development (OFID) in 1Q 2023 were climate-focused, according to a statement released last week. OFID revealed its climate action investment strategy last September, aiming to channel 40% of all new financing into climate mitigation and resilience projects in the energy, smart city, food and water security, and transport sectors.

The details: OFID provided a EUR 50 mn loan to Armenia to fund climate mitigation and energy efficiency projects in the country, the statement notes. The fund also greenlit a similar USD 150 mn loan to Colombia, and a USD 20 mn green financing facility to bolster climate action-focused reforms for land development, consumer data protection, and fishing regulations in the Seychelles. OFID also backed a USD 25 mn loan to back Niger’s Solar Plant Development and Electricity Access Improvement Project (RANAA) earlier this month in a bid to boost renewables in the West African country.

Siemens Energy drums up capital to acquire Gamesa: Siemens Energy sold shares worth USD 1.33 bn to institutional investors in a bid to drum up capital to finalize its acquisition of wind turbine maker Siemens Gamesa, Reuters reported last week. Siemens sold some 72.7 mn shares at EUR 17.32 apiece last week to help fund the EUR 4 bn takeover, the newswire notes. Siemens Energy currently holds nearly 97.8% of Gamesa’s share capital, according to a statement.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Mercedes plans to spend USD bns to upgrade its factories in China, Germany, and Hungary to prepare for its full transition to EVs by 2035. (Reuters)

UK biotech company Colorifix found a way to produce dyes with a fraction of the water used in conventional methods and without any toxic chemicals, Bloomberg reports. Colorifix’s method cuts down 81% in water use and 41% on natural gas, according to an environmental impact analysis prepared for the company last year. The fast fashion industry is responsible for one-fifth of industrial water pollution globally due to its damaging dyeing and treatment processes, according to a report by the Ellen MacArthur Foundation.

How do they do it? Colorifix digitally sources color pigments from the DNA sequence of natural materials — such as feathers, insects and plants — and engineers bacteria to produce the same color, according to Bloomberg. The bacteria is then fed water, sugar, yeast, and plant byproducts to ferment it. Within a couple of days the bacteria generates a large volume of dye liquor, and is already proposed for commercial applications.

The fashion industry is interested: H&M is exploring the potential of using Colorifix’s technology, Bloomberg reports, and Pangaia and Stella McCartney previously produced pieces using Colorifix dye. The company also supplies dye houses in Bosnia, Italy, and Portugal, and is soon expanding into Turkey, India, and Sri Lanka.

The region is a manufacturing powerhouse for the fast-fashion industry: In a rundown of the region’s textile manufacturing capacity, Fashion Trust Arabia identified Jordan, Egypt, Algeria, Morocco, Syria, UAE, Egypt, and Tunisia as having some of the world’s largest textile hubs. The UAE has the region's largest textile factory making it a crucial textile hub in the world, and Egypt has over 7k garment and textile factories — 50% to 80% of which is exported to the US, and the rest to EU and Arab markets.