The UAE is setting up the world’s first carbon credits system using blockchain

Good morning, wonderful people. The news cycle continues to crawl as the region’s summer lull sets in, but there are a couple of breakthroughs making headlines.

OUR TOP STORY- The UAE’s Climate Change and Environment Ministry has signed an agreement with UAE’s the Industrial Innovation Group and US blockchain firm Venom Foundation to set up the world’s first national carbon credits system using blockchain technology. The partnership aims to help slash emissions and boost sustainability through a transparent and reliable carbon credits platform.

^^ We have more details on this story and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Fusion power breakthrough, take 2: Scientists at the Lawrence Livermore National Laboratory in California have reported a net energy gain from a nuclear fusion reaction experiment for the second time.The second fusion ignition breakthrough generated a higher yield than the first experiment last year, which produced 3.15 megajoules of output from the initial input of 2.05 megajoules of power, a Lawrence Livermore spokesperson said, adding that the final results are still being analyzed.

SOUND SMART- Fusion reactions involve the fusing of two light atomic nuclei using lasers to release more energy from fusion than the laser energy used to produce it. The fusing process results in the formation of a single, heavier nucleus, with the leftover mass from the smaller nuclei’s fusion being converted into carbon-free power.

Huge energy potential: Nuclear fusion could generate four times more power per kg of fuel than fission reactions — which see nuclei split to release large amounts of energy in the form of heat and radiation — and nearly four mn times more energy than burning oil or coal, the International Atomic Energy Agency (IAEA) explains. The power source “could provide virtually limitless clean, safe, and affordable energy to meet the world’s demand,” according to IAEA.

The road is long and costly though: Energy companies looking to set up nuclear fusion power plants will need to invest approximately USD 7 bn to realize their targets. Scientists and researchers have cautioned that it will likely be decades before the technology is commercially viable — if ever. The total addressable market for fusion stands at some USD 1 tn annually as of 2022.

The second successful fusion power breakthrough is grabbing headlines: Reuters | Bloomberg | The Guardian | The Financial Times | Washington Post | The Independent

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WATCH THIS SPACE #1- Egypt and Jordan want more renewables cooperation: Egyptian Prime Minister Moustafa Madbouly said that cooperation between his country and Jordan in renewable energy, green hydrogen, and green ammonia would require “powerful and vast” infrastructure and a transit system between the two countries, according to an Egyptian Cabinet statement on Monday. Madbouly and his Jordanian counterpart Bisher Khasawneh also discussed boosting the power interconnection capacity between the two countries up to 2 GW over several phases, allowing the transmission of renewable power to other countries. Madbouly’s statements came during the joint Higher Committee meeting between Egypt and Jordan in Amman yesterday, where officials signed 12 MoUs to bolster bilateral ties, according to a statement by the Egyptian Cabinet.

WATCH THIS SPACE #2- Has Qatar grabbed shares in India’s Adani Green? The Qatar Investment Authority (QIA) has reportedly bought shares worth USD 500 mn in India’s Adani Green Energy, Indian newspaper the Economic Times reports, citing people it says have knowledge of the matter. The purchase was likely made through a block transaction that involved the sale of 3% of Adani’s green energy arm, the sources said. If confirmed, the investment by QIA would provide a lifeline for Adani after a report by Hindenburg Research alleged fraud earlier this year, battering investor confidence.

WATCH THIS SPACE #3- We could be seeing more green bonds from Masdar sooner than expected: Renewables giant Masdar is planning a secondary listing of its green bond offering on the ADX later this year, according to a statement. While no specific time frame was provided, this is sooner than previous comments made about offerings coming in 2024. It said proceeds from all bond offerings under the program will be directed towards “the greenest projects” including solar, wind, renewable power transmission and others. Strict ESG criteria will be applied to restrict the projects’ eligibility, it added.

CIRCLE YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial, or fill out this form and we’ll be in touch.

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DID YOU MISS THE ENTERPRISE EXPORTS AND FDI FORUM? Tune in to the Enterprise Podcast and listen for yourself: The Enterprise Podcast is back with another installment of our forum series, where we bring you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum, which took place in May.

WANT TO LISTEN? Head to: Apple Podcast | Spotify | Google Podcast | Anghami | Omny.

IT’S THE FINAL EPISODE- Our final panel of the day was, naturally, the most forward looking. Our panelists discussed how the companies — be they in age-old industries or emerging ones — have adapted to changes to better position their businesses for an uncertain future. We were joined by Nadia El Tawil, investment officer at pan-African private equity firm AfricInvest, Mostafa Bedair, CEO of Giza Seeds and Herbs, and Abdallah Sallam, CEO of Madinet Masr.

THE ENTERPRISE CLIMATE FORUM SERIES KICKS OFF NEXT SUNDAY- Fresh off the heels of a successful COP27, we held our first forum at the Grand Egyptian Museum, diving deep into the fundamentals of what we think is the world’s most important industry. The conversations ranged from exploring the business opportunities for Egyptian entrepreneurs, companies and startups in climate, to demystifying green hydrogen, and how we finance our green transition.

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CIRCLE YOUR CALENDAR-

Sweden will host World Water Week from Sunday, 20 August to Wednesday, 24 August in Stockholm. Organized by the Stockholm International Water Institute, the event will bring together policy makers, NGOs, and private sector players to discuss innovative solutions to managing water and how to tackle food security, biodiversity, and climate change.

The US will host the International Conference on Recycling and Waste Management and the International Conference on Environmental Sustainability and Climate Change from Monday, 21 August till Tuesday, 22 August in Philadelphia. The waste management conference will gather environmental engineers, and recycling, wastewater treatment, and climate researchers to discuss trends and innovations in plastics recycling, wastewater treatment, and renewable energy. The sustainability and climate change conference will bring together researchers and industry leaders to spotlight innovations in environmental science, climatology, renewable energy, and pollution control.

The Dominican Republic will host the COP27 Transitional Committee from Tuesday, 29 August to Friday, 1 September. The meeting aims to establish institutional arrangements, modalities, governance structures, and terms of reference for the landmark Loss and Damage Fund. It also wants to expand sources for climate funding under the program.

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

The world’s first national carbon credits registration system is coming: The UAE’s Climate Change and Environment Ministry (MoCCAE) has signed an agreement with UAE’s the Industrial Innovation Group and US blockchain firm Venom Foundation to set up the world’s first national carbon credits system using blockchain technology, Wam reports. The partnership aims to help slash emissions and boost sustainability through a transparent and reliable carbon credits platform.

The details: Under the MoU, the three parties will develop basic approaches and specific technological solutions to establish a global platform for the registration and issuance of carbon credits in the UAE. The collaboration will focus on developing a legislative and regulatory framework by the MoCCAE to set up a national system for issuing and registering carbon credits, including the creation of a licensed platform and leveraging blockchain technology to ensure a reliable production of carbon credit registration system documents. It will also guarantee system integration to help with the process of issuing and registering carbon credits. The platform will also allow for the evaluation of projects to lower carbon emissions to help achieve the country’s recently updated NDCs.

The trio will also work on other areas: The MoU also covers work on green investments, climate change adaptation, a climate neutrality strategy and more, Wam reports. It will also seek to promote energy efficiency, renewable energy, waste-to-energy facilities, green technology, and green transport.

The UAE is on board with carbon credit trading: The UAE said it plans to launch regulating carbon credit trading exchanges and clearing houses ahead of COP28. In June, the UAE Independent Climate Change Accelerators launched the UAE Carbon Alliance in partnership with Singapore-based carbon trading exchange AirCarbon Exchange (ACX) in a bid to establish a framework for carbon markets. The alliance was launched a year after the Abu Dhabi Global Market said it was working with ACX on launching the world’s first fully regulated carbon trading exchange.

And it’s part of a growing regional trend: Earlier this month, Doha-based Global Carbon Council (GCC) signed an MoU with the Climate Change Center (CCC), a South Korean non-profit organization specializing in climate change responses, to expand the voluntary carbon market (VCM) in South Korea and MENA. Saudi Arabia’s Regional Voluntary Carbon Market Company (RVCMC) — established by the Saudi sovereign wealth fund and the Saudi Tadawul Group — plans to launch a carbon trading exchange early next year. The announcement came as the RVCMC sold 2 mn tons of carbon credits in June in what the company described as the largest-ever voluntary carbon credit auction. A carbon market in Egypt is also in the works, with the Financial Regulatory Authority forming in April a committee to supervise and regulate the country’s soon-to-be launched voluntary carbon market.

Everything you need to know about the mangroves: The MENA region — particularly the GCC — are investing heavily in boosting their capacity of nature-based carbon sinks, funneling investments toward increasing mangrove plantations to offset carbon emissions and bolster biodiversity efforts. Hailed as an effective carbon mitigation solution to the climate crisis by the World Wide Fund for Nature (WWF), the UAE, Saudi Arabia, Bahrain, Oman, and Qatar are jumping on the bandwagon with mangrove planting initiatives — but how does it work and why is it important?

Nature’s carbon sink: Mangroves — which have 60 different species — only grow along waterlogged coastlines near the equator due to their vulnerability to cold weather and can sequester 10x more carbon than other forests in the sediment, roots, and branches surrounding them. In our neck of the woods, two mangrove species — Avicennia marina and Asiatic mangrove — grow along the Red Sea coast.

Restoration efforts: The rapid development of the shrimp aquaculture industry usurped hundreds of thousands of mangrove acres to make room for artificial ponds, and pollution from fertilizers and pesticides runoff and improper disposal of wastes contributed to the loss of over a quarter of mangrove forests in the past five decades. In our region, direct human activities including coastal developments, land conversion, and sea-level rise on the back of climate change all impacted the health of our mangrove population. In a bid to dial back the damage and right the ship, a USD 4 bn protection package was announced during COP27 under the Sharm El Sheikh Adaptation Agenda (pdf) due to the coastal trees being considered biodiversity superstars based on their ability to host some 341 threatened species.

Mangroves are worth investing in: Mangroves could generate USD 1 tn in net benefit for climate adaptation by 2030 if conservation efforts are stepped up fast, WWF notes. Carbon mitigation aside, mangrove forests also serve as a first line of defense against flooding and erosion, providing more than USD 80 bn in avoided losses annually and protecting some 18 mn people from the effects of climate change, the organization adds.

The UAE is betting big on the coastal trees: The Emirates plans to plant 100 mn mangroves as part of its Roadmap for National Carbon Sequestration. The project — carried out by the country’s Climate Change and Environment Ministry in collaboration with the private sector and international NGOs — will increase the number of mangroves to 100 mn from 30 mn in a bid to create a carbon sink to sequester carbon. UAE-based business conglomerate Essa Al Ghurair also inked an agreement with the UAE’s Climate Change and Environment Ministry to plant between 500k-1 mn mangrove tree seedlings in the next decade.

Saudi Arabia is following suit: The Saudi Arabian government has an ambitious target to plant some 10 bn mangrove trees under its USD 186 bn Saudi and Middle East Green Initiatives — which it launched in 2022. Last week, Red Sea Global, a global multi-project developer fully owned by Saudi Arabia’s sovereign wealth fund the Public Investment Fund, opened its first dedicated mangrove nursery and plans to plant 50 mn mangrove trees by 2030.

The rest of the region is also onboard: Oman’s Environment Authority is planting mangrove seeds in the North Batinah, South Batinah, South Sharqiyah, and Al Wusta governorates as part of its 2 mn mangroves forestation target by mid-August. Similarly, the Qatari government has been earmarking capital since 2019 to up local mangrove plantation capacity, and recorded last year an increase in the surface area of mangrove swamps to 14k sqm from 9k sqm. Over in Bahrain, the government is looking to partner with the UN Habitat program and banking company HSBC on a two-year rehabilitation and restoration aimed at quadrupling mangrove plantations in the country by 2035 from the current 0.8 square kilometers. Further afield, Iraq is partnering with the United Nations on a program that will see it plant 4 mn mangroves in the Khor Al-Zubair mudflats region — near major oil fields — in a bid to push down its emissions and alleviate the effects of climate change. In 2020, Egypt launched a mangrove reforestation program in a bid to restore 210 hectares of forest cover.

GAC’s all-electric dual-battery crossover EV Aion Y is now available in Jordan, according to a statement. The EV comes in three models: the Aiyon Y Younger, Aiyon Y Plus 70, and the Aiyon Y Plus 80 (watch, runtime, 00:38). Aiyon Y Plus 70 is currently on offer in Jordan.

The specs: The Aiyon Y has a 135 KW electric motor giving the car 181 horsepower with a 225 Nm torque. The Plus 70 goes from 0-100 KMh in about 7.8 seconds (watch, runtime, 04:44) and has a 64 KWh battery, giving it a 500 km driving range when fully charged. Compatible with direct current (DC) fast chargers, the EV can recharge 28% of its battery capacity on a 30 minute charge. (watch, runtime, 01:05)

Features: The five-seater EV features include adaptive cruise control, lane departure warning, automatic emergency braking, a 360-degree camera system, and a variety of driver assistance systems, GAC notes.

Extended warranty to boost EV sales: “To enhance the Aion Y experience, GAC Jordan offers motorists a 5-year warranty on the car and an 8-year warranty on the battery,” CEO of Al Qudra Al Arabiya for General Trading Company Mohammad Alayyan said.

The price tag: The starting price for the EV in Jordan was not disclosed, but the Plus 70 retails for between USD 20-26k in the Chinese market depending on features (watch, runtime, 00:22).

A massive setback for Siemens Energy: Technical faults at Siemens Energy’s wind turbine unit will cost it EUR 2.2 bn (c. USD 2.4 bn), its 3Q results (pdf) showed on Monday. The setback has hit the energy giant’s subsidiary Siemens Gamesa, bringing its net losses this year to EUR 4.5 bn. It also slashed its sales outlook and issued a new lower profit outlook due to technical issues in onshore wind turbine components and ramp-up issues for offshore production.

It’s not as bad as predicted: Yesterday’s cost tally remains below worst-case estimates of over EUR 5 bn issued by UBS, according to Reuters. “While the results are negative, they are not as bad as feared by some investors,” Reuters quoted JP Morgan analysts as saying. They said an additional EUR 700 million euro writedown on deferred tax assets could help the group “clear the decks.”

REMEMBER- Gamesa is a major player in Egypt’s wind energy sector and is involved in the 500 MW Gulf of Suez wind farm — formerly known as the Ras Gharib wind plant — the 250 MW West Bakr wind farm, and the 220 MW Gabal El Zeit 2 wind project in the Gulf of Suez.

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A helping hand for Nigeria’s mini solar grids: The World Bank plans to help finance the construction of 1k mini solar power grids in Nigeria under a partnership with the government and private sector, Reuters reported earlier this week, citing statements by the Washington-based lender’s President Ajay Banga. Nigeria — which is Africa’s biggest economy — has an installed power generation capacity of 12.5 GW, but produces only a fraction of that, leaving mns of homes and businesses dependent on petrol and diesel generators. Banga said that nearly 150 mini grids partly funded by the lender had been built to provide power to communities without electricity. “We are putting another 300 in, but our ambition with the government is to go all the way to 1k. We’re talking about hundreds of mns of USD that are being invested,” he said, without providing a specific timeline for the construction of the new grids.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Energy giants eye Indonesia: Singapore’s Vena Energy, China’s Suntech and REPT Battero, and US-based Powin will jointly explore investment opportunities to manufacture solar panel components and energy storage systems in Indonesia. (Reuters)
• Japan will begin disposing of Fukushima’s radioactive water: Japan will begin releasing treated radioactive water from the Fukushima nuclear power plant into the ocean as early as late August. About 1.3m tons of water has been filtered to remove most radioactive elements except for tritium, an isotope of hydrogen that is difficult to separate from water. (The Guardian)

ADQ partners with Dutch agritech firm on Abu Dhabi greenhouse facility: Abu Dhabi’s investment and holding company ADQ signed a partnership agreement with climate-smart agriculture technologies firm Safe Haven Solutions to build a carbon-neutral greenhouse at ADQ’s AgTech Park in Khalifa Economic Zones Abu Dhabi, Wam reports. No financial details or a timeline for the project were disclosed. The first phase of the facility will span 10 hectares, with plans to later double its capacity in the commercial stage to 20 hectares. The greenhouse will be powered by net-zero cooling systems to enable year-round cultivation of tomatoes and cucumbers.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• KSA + Argentina will work on geological cooperation: Saudi Arabia and Argentina inked an agreement to explore and evaluate mineral resources and groundwater reservoirs, conducting risk and impact mitigation reports, and assessing data management techniques. (Saudi Press Agency)
• KSA adopts USB Type-C to cut e-waste: The Saudi government is adopting USB-C chargers as the country’s standard charging ports starting 1 January, 2025. The move will push down annual domestic consumption of charging cables by over 2.2 mn units, reducing some 15 tons of electronic waste annually, and saving consumers SAR 170 mn annually. (Gulf News)
• KSA’s IsDB extends helping hand to Tajikistan: The Islamic Development Bank (IsDB) signed a financing agreement with the government of Tajikistan aimed at improving water management for the country’s agriculture sector through various Islamic financing methods including Murabaha, Salam, Ijara and Musharaka systems. (Saudi Press Agency)
• KSA’s SIRC expands reach globally: PIF-backed Saudi Investment Recycling Company (SIRC) has joined the European Petrochemical Association under a strategic plan to expand its recycling business and bolster cooperation with global counterparts. (Saudi Press Agency)

The first commercial ferry powered entirely by hydrogen is set to make its maiden voyage across San Francisco Bay this month, The Guardian reports. The MV Sea Change ferry will embark on a one-hour zero-emission journey as part of a plan by the San Francisco Bay Area Water Emergency Transportation Authority to phase out diesel-powered ferries by 2035, the news outlet said. The shipping industry emits almost 3% of the world’s greenhouse gasses, The Guardian said, citing a 2020 study published by the International Maritime Organization.

Could the transition to hydrogen-powered be feasible? 43% of the cargo voyages made on the shipping corridor between China and the US could be fueled by hydrogen without any modifications for fuel or refueling, the International Council on Clean Transportation (ICCT) says. Nearly all voyages on this route could be hydrogen-fuelled with some minor tweaks including expanding cargo space by 5% to stock up on more hydrogen fuel or adding a port of call for refueling en route, ICCT adds.

But storage still poses the trickiest barrier: If the hydrogen is in gas form, high-pressure containers are needed to store it. If in liquid form, the fuel will have to be stored in extremely low temperatures of almost -153 °C. A lightweight tank is currently being designed by US-based HyPoint and Gloyer-Taylor Laboratories, the Guardian writes, and Norway’s Marine Service Noord has designed double-walled pipes for pressurized hydrogen-storage systems.

Denim wear from beach waste: The EU-backed Kerkennah Plastic Free program is selling tons of plastic from its beach to international consortium Seaqual Initiative for repurposing as nylon fibers for clothing, project coordinator Jean-Paul Pelissier told AFP. The waste is transformed through multiple processes to make denim clothing for a number of companies including Outa — a couture brand that made its debut at Tunis Fashion Week last June.

How does it work? Fifteen informal rubbish collectors in Tunisia’s Kerkennah Islands first take their daily harvest to a sorter, who subsequently passes it on to a collection company where it is fed to a crusher. The plastic granules recovered after grinding the waste are then transformed into Seaqual Yarn nylon fiber in a plant in Portugal — one of just four factories in the world equipped with this technology. The Seaqual Yarn is delivered to a Sitex plant — a denim supplier that has 70% of its manufacturing based on recycled fibers — in the coastal town of Ksar Hellal in Tunisia to produce denim.

Outa will have to consider some barriers: Production costs are 20% higher for denim with recycled marine plastics compared to normal denim without, according to AFP. Renowned French designer Maud Beneteau — who designed Outa’s first collection — told AFP that there were some difficulties working with a fabric that was “a little thick and stiff, originally designed for sportswear and ready-to-wear, rather than haute couture.”

About Kerkennah Plastic Free program: The program aims to recover 7k tons of plastic waste each year on the Kerkennah Islands located 20 km off the port city of Sfax, AFP said. The island is heavily polluted due to marine currents carrying the waste from Europe into the Gulf of Gabes in Tunisia. The program partnered with Seaqual last year to export and transform marine plastic from the Kerkennah Islands into new sustainable products.