Masdar snaps up bid to build 1.8 GW sixth phase of UAE’s Al Maktoum solar park

Good morning, wonderful people. We have a packed issue with climate updates from around the region across all facets of the industry. Shall we?

THE BIG CLIMATE STORIES- The Dubai Electricity and Water Authority has selected the UAE’s Masdar to build and operate the 1.8 GW sixth phase of the Mohammed bin Rashid Al Maktoum solar park beating Saudi Arabia’s Acwa Power for the bid, and UAE’s Tabreed will sell 50% of its ownership in subsidiary Tabreed Parks Investments to a DH Investments’ subsidiary for AED 99.8 mn.

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

HAPPENING TODAY- The world’s first liquefied hydrogen carrier will be berthing in Oman today: The world’s first liquefied hydrogen carrier, Suiso Frontier, is set to arrive at Oman’s Sultan Qaboos Port in Muscat today, Oman Daily Observer reports. The Kawasaki Heavy Industries (KHI) manufactured vessel, which is Oman-bound following its departure from Abu Dhabi, is making its first visit to the Gulf country. The ship’s main mission is to introduce the Japanese technology for hydrogen transportation, pursue cooperation for the transportation of hydrogen, and establish global supply chains, according to the media outlet.

ALSO- We’re hearing whispers that the world’s first ever green methanol-powered container ship is set to pass through the Suez Canal today. Stay tuned for more details in tomorrow’s issue.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- Disaster in Maui: The death toll from Maui wildfires in Hawaii has killed 93 people, making it the deadliest wildfire in US history in over 100 years. The death toll is likely to rise as dogs trained to detect bodies continue to sweep the ruins of the historic town of Lahaina, according to officials. Rebuilding Lahaina would cost c. USD 5.5 bn, according to the Federal Emergency Management Agency (FEMA), with over 2.2k structures suffering damages or destroyed and over 2.1k acres burned. Scientists believe the deadly wildfires were aggravated by several factors including climate change, with soaring global temperatures and drought turning some parts of Hawaii into a tinderbox on the back of powerful winds from a nearby cyclone.

Maui dominated coverage in the international press over the weekend: Reuters | Bloomberg | The Associated Press | The Financial Times | The Guardian | The New York Times | Washington Post | The Wall Street Journal

OVER IN COPLAND- COP28 President-Designate Sultan Al Jaber was in Barbados over the weekend to meet with Prime Minister and climate champion Mia Mottley, Wam reported on Friday. During his visit, Al Jaber gave a speech to the leaders of the Caribbean Community (CARICOM), where he reiterated the importance of closing the global climate finance gap, while praising Mottley’s Bridgetown Initiative which presents ways to reduce “excessive risks” that developing countries have to take to borrow to fund green investments. During his speech, Al Jaber said that he has called on donor countries to “show him the money” when it comes to the long overdue USD 100 bn annual climate finance pledge that developed countries have promised developing economies.

UAE-Caribbean climate cooperation is growing: Masdar is set to drive 16 renewable energy projects across CARICOM through its UAE-Caribbean Renewable Energy Fund, the company said. However, Al Jaber noted that the cost of capital is proving a stumbling block to progress the renewables projects between the two countries.

ALSO- Al Jaber praised Brazilian President Luiz Inacio Lula da Silva for his policies prioritizing indigenous peoples on the closing day of the Amazon rainforest summit, adding the policies serve as a blueprint for other regions, Wam reported last week. “We will build on the experience and the lessons that the Amazon Cooperation Treaty Organisation and Indigenous Peoples can teach us in advancing the dual goal of protecting and restoring nature, while advancing sustainable development,” Al Jaber said, adding that although indigenous communities represent 5% of the world’s population, they protect over 80% of biodiversity.

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FROM THE DEPT OF GOOD NEWS- FSO Safer is nearly cleared: A UN-led salvage operation to remove over 1 mn barrels of crude oil from the rusting supertanker FSO Safer has nearly finished, according to a UN press release. The 47-year-old FSO Safer was abandoned off the coast of Yemen at the start of the country’s civil war in 2015, and was at risk of leaking, breaking apart, or exploding, resulting in “catastrophic environmental and humanitarian consequences,” the UN said. A UN salvage team has been unloading the oil from Safer onto a replacement oil tanker The Nautica since late July in an operation costing USD 140 mn. Less than 2% remains of the 1.1 mn barrels of oil that were on the tanker. Some USD 20 mn is required to complete the operation, the UN said.

WATCH THIS SPACE #1- Egypt’s GAFI ❤️ investors: Egypt’s General Authority for Freezones and Investment (GAFI) has done away with some of the paperwork required by companies for a number of post-incorporation services under efforts to “improve the investment environment” by streamlining procedures, it said in a statement on Friday. Some of the documents no longer needed for submission include those related to nominating board members, holding board meetings, appointing auditors, and reporting the death of partners or shareholders. The move comes a week after it began operating its new digital platform, which provides investors with services to establish companies, authenticate contracts at notary offices, and register using electronic signatures, among other services.

WATCH THIS SPACE #2- Jordan will launch a new long-term energy strategy in 2024, Al Ghad reported last week, adding that incentives for renewable energy, power storage, and green hydrogen production will be central to the plan. The strategy has been in the pipeline for some time, Secretary General of Jordan’s Energy and Mineral Resources Ministry Amani Azzam said, with studies for the energy sector’s development and expansion of smart power networks currently underway, she added. The kingdom is also expected to announce its green hydrogen strategy this quarter, Assistant Secretary-General of the Energy and Mineral Resources Ministry Hassan Al-Hayari said in June.

WATCH THIS SPACE #3- UAE’s Mubadala bets on Brazil’s ethanol for biofuel production: Mubadala Capital — the asset management arm of UAE’s investor Mubadala Investments — plans to acquire a 31.5% stake in Brazilian sugarcane processor Atvos later this year or early next year, Atvos CEO Bruni Serapiao told Reuters last week. He said that his company is under bankruptcy protection, with Mubadala set to pay BRL 500 mn (c. USD 102.8 mn) when it lifts its court debt protection.

Mubadala’s going big on Brazilian green fuels: Abu Dhabi’s Mubadala Capital-backed Acelen said in April that it will invest up to USD 2.4 bn over the next 10 years to produce green diesel and sustainable aviation fuel in Brazil. The new biorefinery in Brazil’s northeastern state of Bahia will have the capacity to produce up to 1 bn liters per year of hydrotreated vegetable oil (HVO), a diesel-like fuel that can be produced from various vegetable oils and animal fats. Earlier this year, Mubadala Capital withdrew from bidding for ethanol JV BP Bunge Bioenergia, with reports suggesting that the UAE state investor dropped out after concluding negotiations to acquire Atvos.

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WATCH THIS SPACE #4- Western wind power is in trouble: Energy transition targets are at risk as supply chain strains continue to hike prices for the wind power sector, CEO of RWE Markus Krebber told Bloomberg last week. Rising inflation and strained supply chains are driving up prices for offshore wind turbines, leading to a halt in a number of large scale wind power projects in the US and the UK, Krebber says, meaning that global climate protection targets will be at risk if renewables plants don’t come online as scheduled. Swedish energy company Vattenfall said it would put three phases of the Norfolk Offshore Wind Zone in the UK on pause due to rapidly increasing costs of equipment and construction last month, hiking the project’s price tag up by GBP 3 bn to GBP 13 bn. Suppliers will need to up their production capacities fast to clear the backlog, and governments will need to extend auction lead times beyond the current average of five years to strengthen the wind power sector’s long term supply chain security, he added.

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THE DANGER ZONE- “The world is likely to face major disruption to food supplies well before temperatures rise by the 1.5°C target,” the Guardian reports, citing COP15 UN Convention to Combat Desertification president Alain-Richard Donwahi. Donwahi expressed that the effects of drought are coming about more rapidly than expected given its intersections with food security, migration of population, and inflation levels. The former desertification president called for more attention to be drawn to investing in agriculture to improve yields and therefore food security.

Desertification is getting the short end of the stick: “Last year’s COP15 on desertification went largely unnoticed compared with the climate COP27 and the biodiversity COP15 last December,” the Guardian wrote, despite that it happens less frequently than other climate summits. The COP16 desertification conference will be held in Riyadh in December 2024.

IN OUR NECK OF THE WOODS- Iraq’s 50°C heat shows the “era of global boiling” has begun, UN High Commissioner for Human Rights Volker Turk warned last week, according to The National. Turk witnessed ‘the tangible effects’ of climate change firsthand during a four-day visit in Iraq last week. “Standing in searing heat in that scarred landscape, breathing air polluted by the many gas flares dotting the region, it was clear to me that the era of global boiling has indeed begun. This is a climate emergency. And it is high time it is treated like one. Not just for Iraq but for the world,” he said. Turk attributed Iraq’s climate woes to a “toxic mix” of global warming, drought, poor water management, violence, and “oil industry excesses,” the news outlet notes.

Dangerously low water levels: Turk’s statements come a day after the country’s Water Resources Ministry said that Iraq’s water levels dropped to their lowest capacities on record. Iraq is the fifth most climate-vulnerable country in the world, susceptible to climatic phenomena such as high temperatures, insufficient rainfall, drought and water scarcity, and frequent sand and dust storms. Nearly 70% of the country’s land mass is under threat of climate-induced desertification. To top Iraq’s water woes, Iran and Turkey have built dams in recent years that have affected water levels in the Tigris and Euphrates rivers, which account for 98% of Iraq’s surface water. The country needs USD mns to combat desertification and is looking to raise some USD 100 mn to launch reforestation efforts and bolster food security. Iraq will only be able to meet 15% of its water demands by 2035 if current trends continue, the UN warned in May.

NON-CLIMATE REGIONAL HEADLINES:

• UAE: The Emirates refuted media reports suggesting it sent arms shipments to one of the warring parties of Sudan’s war. (Al Bayan)
• Saudi Arabia: KSA has appointed its first ever ambassador to Palestine as the US pushes with efforts on Saudi-Israel normalization. (Asharq Al Awsat)
• Egypt: Inflation accelerated at a record pace for the second month running in July, as surging food costs and the impact of a series of devaluations maintained upward pressure on prices. (Enterprise)

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IN THIS WEEK’S EPISODE- It’s the very first panel of the Enterprise Climate Forum: Egypt brought home major victories from COP27, signing framework agreements for about USD 85 bn worth of green hydrogen projects, and announcing more than USD 10 bn in funding for the Nexus for Food, Water and Energy (NWFE) program. While we have a long way to go before much of the wins from COP27 will be tangible to the private sector, the opportunities in green hydrogen and NWFE are “now.” Our panelists helped explain how these two can be made actionable. We were joined by Jorgo Chatzimarkakis, CEO of Hydrogen Europe, Khalid Hamza, Director and head of Egypt at the European Bank for Reconstruction and Development, and Khaled Naguib, CEO of Hydrogen Egypt.

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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.

UAE taps Masdar to build sixth phase of Al Maktoum solar park: The Dubai Electricity and Water Authority (Dewa) has selected the UAE’s Masdar to build and operate its 1.8 GW sixth phase of the Mohammed bin Rashid Al Maktoum solar park beating Saudi Arabia’s Acwa Power for the bid, the Dubai Media Office reports. The full investment ticket for the upcoming phase is AED 5.5 bn (c. USD 1.5 bn), and it is scheduled to become operational in stages between 4Q 2024 and 2026.

The lowest price wins: Masdar’s bid to sell the energy generated by the sixth phase was the lowest bid Dewa has received thus far at USD 0.0162 per kWh, beating Acwa Power’s fifth phase pricing of USD 0.0170 per kWh. Acwa Power’s competing bid for the sixth phase was not disclosed.

The upcoming phase will push total capacity to 4.2 GW: Once the sixth phase is completed, the park’s total production capacity will go from the current 2.4 GW — reached in June after the inauguration of the fifth phase — to 4.2 GW. This leaves 800 MW remaining to complete the world’s largest single-site solar park using the IPP model.

A second play for Masdar: A Masdar-led consortium developed the 800 MW third phase of the solar park in partnership with France's EDF, selling at a price of USD 0.0299 per kWh, which was the lowest price secured by Dewa at the time. Acwa Power is still ahead of Masdar in the number of bids won, having developed the second, fourth, and fifth phases of the park.

IN OTHER MASDAR NEWS- The company is emerging as a risk taker in climate-challenged economies: Masdar’s recent debut green bond issuance will allow it to “tap into a completely new pool of liquidity for greenfield, wind, solar and battery projects…in developing or climate-challenged economies,” CFO Niall Hannigan told S&P Global Commodity Insights in an interview last week. Hannigan stressed that the liquidity would not be subjected to the usual risk of being put into developing economies. "That's us using the green bond and taking money to markets it otherwise would not get to," he said.

And there’s some strategic diversification on deck: It aims to produce 1 mn mt of renewable hydrogen by 2030, first in the UAE under an agreement with France’s Engie and global hubs like Egypt for exports into Europe and cooperation in the continent itself, including BP in the UK. The Gulf represents a “huge market” for the company, with generation capacity for green hydrogen in the UAE and Saudi Arabia covered, Hannigan said. MENA is also a key region of interest, with its joint venture with Infinity Power helping it acquire a platform with projects in Egypt, South Africa, and Senegal, he added.

Battery storage in mind: Masdar is also interested in battery storage projects, targeting 1 GW plus of battery storage through Masdar Arlington, Hannigan said. He revealed that final investment decisions would be made later in 2023 on the company’s first UK battery projects, which upon operations would be managed using Octopus’ Kraken technology platform.

Tabreed is offloading half of its ownership in its TPI: The UAE’s National Central Cooling Company (Tabreed) will sell 50% of its ownership in subsidiary Tabreed Parks Investments (TPI) to a DH Investments’ subsidiary for AED 99.8 mn (c. USD 21.7 mn), according to a disclosure (pdf) released on Friday. DH Investments is part of Dubai Holding, the investment vehicle of Dubai‘s ruler Sheikh Mohammed bin Rashid Al Maktoum.

What we know: The AED 99.8 mn transaction is expected to close this month, according to the disclosure, which said that Tabreed will retain a 50% stake in TPI post sale. It is set to help increase cash balance by AED 99.8 mn and increase other income and gain by circa AED 80 mn to AED 100 mn before taxes. However, Tabreed said it expects the transaction to result in a lower net income by c. AED 9 mn for the company by 3Q 2023.

Where the funds are going: The proceeds will be channeled to finance further growth on Tabreed’s portfolio in key markets, the disclosure said, without providing details on the planned markets or plans by the district cooling company.

Tabreed already started expansions: The company increased its international footprint earlier this year by making a grand entry in India under a partnership with Tata Realty and Infrastructure Limited. It began operating the cooling infrastructure in July.

About TPI: TPI’s assets include district cooling plants and an associated network which provides chilled water services to multiple theme parks and related facilities in Dubai, according to the disclosure.

Chinese battery minerals producer Zhejiang Huayou Cobalt is mulling a MAD 200 bn (c. USD 20 bn) electric vehicle battery plant in Morocco, Hespress reported on Wednesday, citing a regional investment center official.

What we know: The facility, which would be located in Laayoune Sakia El Hamra in the Western Sahara, would have a production capacity sufficient to meet 30% of the demand in EV batteries by local, European and US markets, Director-General of the Regional Investment Centre of the Laayoune-Sakia El Hamra region Mohamed Jifer told Hespress. This would roughly mean batteries supplied to over 6 mn electric vehicles by 2030, Jifer added.

We already know Morocco is getting a gigafactory from the Chinese: Morocco signed an MoU with Chinese battery maker Gotion High Tech in June to build a roadmap for setting up a gigafactory for EV batteries and energy storage systems. Under the agreement, Gotion High-Tech will set up a “gigafactory” with investments estimated at MAD 65 bn (c. USD 6.4 bn) in Bouknadel. The facility, which will be the first of its kind in Africa, will have a production capacity of 100 GWh and will create 25k jobs.

REMEMBER- Morocco has transformed itself into a regional automotive powerhouse through smart incentives and consistent government policy, and it is now a key exporter to Europe as well as to other MENA countries, including Egypt. It has put together a comprehensive agenda including developing a national master plan for electric mobility, designating zones where fossil-fuel cars are banned, giving tax exemptions on EVs, and developing the infrastructure through an iSmart charging station. Morocco is targeting the production of around 1 mn EVs in the next three to four years, according to statements by officials last year.

Veolia, TotalEnergies to greenify desalination plant in Oman: Oman-based Sharqiyah Desalination Company SAOG, a JV between France’s Veolia and Oman’s National Power and Water Company, has signed an agreement with TotalEnergies to build a 17 MW solar project to power its Sur desalination plant, according to a statement. The solar farm will produce over 30 GWh of clean energy annually — supplying over a third of the plant's daily consumption — and will offset some 300k tons of carbon emissions annually, the statement notes.

Veolia has been active this year: A consortium comprising Veolia, ADQ, and Saudi investment powerhouse Vision Invest reached financial close on the acquisition of two hazardous industrial waste treatment plants in the UAE’s Al Ruwais Industrial City last June, which will have a combined 70k ton annual treatment capacity, with Veolia holding a 50.1% stake in the operating company. Veolia’s subsidiary Sidem was also tapped to lead a consortium tasked with the engineering, procurement, and construction of the AED 2.3 bn low-carbon Mirfa 2 Reverse Osmosis desalination plant in the same month.

A mixed 2Q for Dewa: The Dubai Electricity and Water Authority (Dewa) reported a 24% y-o-y drop in net income in the second quarter of the year to AED 1.98 bn despite a rise in customers and demand, according to financial statements (pdf) released on Thursday. Dewa’s revenues were up 4.3% y-o-y in 2Q reaching AED 7.3 bn.

Driving the rise in topline: The growth in consolidated revenues during the second quarter came on the back of increased demand for electricity, water, and cooling services and a rise in revenues by the utility company’s other portfolio of assets, its earnings release (pdf) explained. It also reported a rise in the number of customer accounts during the quarter by nearly 15k to reach 1.18 mn customers.

A rocky 1H: Dewa reported a 18.8% y-o-y fall in net income during the first half of the year to report AED 2.7 bn on the back of a rise in net finance costs and depreciation. Net finance costs were higher by AED 262 mn due to an increase in the Emirates Interbank Offered Rate (EIBOR) and a lower capitalized interest of new IPP projects that have been commissioned. Depreciation also increased by AED 190 mn due to the newly commissioned projects, triggering the plunge in net profit during the first six months of the year. Revenues were up by c. 5% y-o-y in the first half of the year to report AED 12.7 bn.

A solid 2Q for Acwa Power: Saudi Arabia’s Acwa Power reported a 6.3% y-o-y increase in net income in 2Q to report SAR 414.4 mn on the back of an increased operating income, according to financial results sent to Tadawul on Thursday. Its revenues rose 9.1% y-o-y during 2Q reaching SAR 1.4 bn.

What’s behind the increase? The rise in net profit during the quarter was due to a higher operating income before impairment and other expenses. The company attributed this to new projects as well as greater contribution from existing projects.

A profitable 1H: The Saudi utility giant reported a 26.3% y-o-y rise in net income for the first half of the year to SAR 684.1 mn from SAR 541.7 mn in the corresponding period last year. Its revenues were up 12.2% y-o-y during the first six months of the year to SAR 2.7 bn from SAR 2.4 bn in the same period last year.

Yet, it could have been better: The increase in net profit during both the second quarter and first half was partially offset by higher finance charges due to additional debt, including the sukuk tranche issued by Acwa Power, the refinancing in one of the subsidiaries, and higher finance costs on the back of higher market rates.

Acwa had a very good year: The renewables giant said it was able to achieve four financial closes in the first half of the year, including the 200 MW Kom Ombo solar plant in Egypt and the 100 MW Karatau wind farm in Uzbekistan, according to its investor report (pdf). It also contributed to the financial closing of the USD 6.3 bn mega hydrogen plant in Neom and signed a hydrogen purchase agreement and a complimentary wind power purchase agreement in Uzbekistan.

Uzbekistan is the star of the year: Acwa Power said it signed a roadmap agreement with Uzbekistan’s Energy Ministry and the Uzbekistani sovereign wealth fund to set up a 1 GW wind energy and battery storage project in the country. It also signed an EPC contract with Energy China Group Corporation (CEEC) for a solar PV project in Uzbekistan’s Tashkent.

Where things stand now: PPAs signed by Acwa Power during the first half of the year have helped bring its total power capacity to over 50 GW, according to the report. Over 23 GW of the capacity, representing 46%, are renewables. Such momentum brings it closer to its 2030 target of a 50/50 portfolio between renewables and flexible generation, it said.

Morocco tenders for 400 MW Noor Midelt III solar farm: Morocco's renewable energy agency Masen has floated a prequalification tender for the 400 MW third phase of the 1.6 GW Noor Midelt solar complex in the Atlas Mountains, according to a statement released last week. Developers will have to submit prequalification documents to fund, build, and operate the solar plant by 20 October. Masen is expected to award the contract for the 400 MW second phase of the project soon, after prequalifying six consortiums including France’s EDF Renewables, Spain’s Iberdrola, and Saudi Arabia’s Acwa Power earlier in July.

Noor’s first phase is stalled: A consortium led by EDF began working on the 800 MW first phase of Noor Midelt in 2019, which combines solar and concentrated solar power (CSP) technologies, and the project was expected to deliver electricity to the grid from 2022. However, progress on phase 1 has stalled due to disagreements over CSP tech, Reuters reports, citing people with knowledge of the matter.

ALSO- The kingdom is going big on green fuels: Morocco allocated 1.4 mn hectares of land last year for 454 projects with a combined expected investment ticket of USD 60.5 bn and 93% earmarked for green hydrogen and ammonia projects, Asharq Business reports, citing data by the country’s Economics and Finance Ministry. Eight green hydrogen and ammonia projects secured the lion’s share of the land allocation agreements, including projects proposed by Abu Dhabi National energy company-subsidiary Taqa Morocco, Copenhagen Infrastructure Partners (CIP), AP Moller Capital, Dahamco, Power Sur, Ornx Boujdour et Laayoune, Falcon, and OCP.

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Iran kicked off operations on the IRR 1.4 bn (c.USD 33 mn), 10 MW Shahid Hamid Bakri solar plant in the province of Semnan, Mehr News Agency reported on Thursday. The country is expected to double the farm’s generation capacity over a second phase, the news agency quotes a cabinet representative as saying. Iran’s Renewable Energy and Energy Efficiency Organization (Satba) announced plans earlier this year to re-tender 2.2 GW of solar projects during the current Iranian fiscal year under plans to establish at least one solar farm in every Iranian province. In July, Satba announced plans to build a 1 GW solar farm in Qazvin.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Progress in the Omani EV sector: Oman’s Energy and Minerals Regulatory Commission has granted licenses for the construction of 55 EV charging stations. The commission says it has approved 128 other stations, and 74 requests to develop charging points are still pending. (Jordan 24)
• Spain’s PVH supplying solar trackers in KSA: Spanish solar energy equipment manufacturer PVH will supply 805 MW of solar trackers for Indian multinational Larsen & Toubro’s Ar Rass solar project in Saudi Arabia. All of the trackers will be locally produced in PVH’s 8 GW tracker factory in Jeddah. (Statement)
• Morocco grants more mining licenses: Morocco has granted London-listed mineral exploration company Aterian 10 new licenses to explore critical minerals including copper and silver on a total land area of 139.6 square km. (Statement)

Indonesia is upping its EV game: Indonesia is reportedly planning additional tax incentives to lure global EV producers to the country, Bloomberg reported on Friday, citing people with knowledge of the matter. The sources say the Indonesian government has agreed to offer 0% export duty and VAT exemptions to EV producers that set up shop on shore. They said potential investors will be allowed to import cars to sell domestically, but they must set up a factory within two years or face penalties still being outlined by the government. These decisions are subject to changes before a formal announcement, according to the sources. The incentives come as Indonesia tries to catch up with neighboring countries like Vietnam, the Philippines, and Thailand for a share of the global EV supply chain. It has been in talks with US company Tesla in recent years to set up on shore, while leading EV producer BYD signed an agreement in May to explore investments, although no actual moves on investing are yet in sight.

A push in the US to scale up DAC: The US Department of Energy (DOE) will provide over USD 1 bn in federal grants for projects in Texas and Louisiana aimed at removing over 2 mn metric tons of carbon emissions annually by scaling up direct air capture (DAC) technology, Reuters reported on Friday. The DOE selected Louisiana's Project Cypress run by Batelle, Climeworks Corporation and Heirloom Carbon Technologies and the South Texas DAC Hub proposed by Occidental Petroleum’s subsidiary 1PointFive and partners Carbon Engineering and Worley. The move comes under a wider plan to deploy DAC, which could help the country meet its target of neutralizing greenhouse gas emissions by 2050, according to the DOE.

SOUND SMART- DAC technology refers to the removal of CO2 directly from the atmosphere at any location, rather than carbon capture which is generally absorbed at the point of emissions. Carbon dioxide removed under DAC technologies can be permanently stored in deep geological formations or be utilized in various applications.

DAC could be happening in the region: State oil giant Abu Dhabi National Oil Company (Adnoc) signed a strategic collaboration agreement with Occidental Petroleum earlier this month to explore potential investment opportunities in carbon dioxide capture and storage (CCS) hubs in the UAE and US. Under the agreement, Adnoc and Occidental will evaluate the development of direct air capture (DAC) facilities in the UAE — including what could be the first megaton DAC project outside of the US — to potentially absorb as much as 1 mn tons of carbon dioxide annually. Adnoc will also explore the possibilities to participate in several DAC and CO2 sequestration facilities in the US that are currently being developed by Occidental’s subsidiary 1PointFive.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Singaporean firm to build a US solar panel factory: Maxeon Solar Technologies will build a 3 GW, USD 1 bn solar cell and panel factory in the US. The company is considering a plan to up the plant’s production capacity to 4.5 GW, and will make a final investment decision later this year. (Reuters)
• EV company Zeekr launches a sports car: Geely-owned EV brand Zeekr is launching its first luxury sports car within weeks, with the first batch to be delivered later this year. The car will sell for over CNY 1 mn (USD 140k). (Reuters)
• Rainforest nations demanding rich countries fulfill pledges: A dozen rainforest countries have formed a pact calling on developed nations to meet an existing pledge to provide USD 200 bn per year for biodiversity preservation and USD 100 bn annually in climate financing. (Reuters)
• Adani ready to go in alone on hydrogen mega-project: Gautam Adani — founder and chairman of Indian conglomerate Adani Group — said he is still prepared to invest bns of USD to develop the green hydrogen sector in India after French oil-giant TotalEnergies recently pulled the brakes on a plan to buy 25% of Adani New Industries pending investigation into fraud allegations. (Bloomberg)
• China emissions hit new record: China recorded a 10% y-o-y rise in its emissions in 2Q, up 1% from record levels in 2021 on the back of increased reliance on coal to make up for weak hydropower output following a historic drought last summer. (Carbon Brief)

Oman kicks off project to make fertilizers from palm waste: Oman’s Ministry of Agricultural, Fisheries, and Water Resources has launched a project to produce “eco-friendly soil enhancers” in the Barka coastal city in the country’s south, Muscat Daily reported last week. At a cost of RO 180k (USD 466.8k), the new plant will produce soil fertilizers from palm residue such as leaves and fronds, turning what would have been waste into a cheaper alternative to imported fertilizers. By using a total of around 9k palm trees, the project aims to produce approximately 900 tons of agricultural soil enhancer annually.

How they’re going to do it: The project will need four hectares of land and will follow a seven-stage production process, CEO of the Agricultural Soil Enhancer Production Project Muhammad Al Rawahi explained to Muscat Daily. The process includes collection, cutting of palm waste, drying, chopping, drying again, and finally packaging the product. One palm tree can yield about 100 kg of organic soil enhancer per year.

The benefits: Palm residues contain essential elements such as nitrogen, phosphorus, potassium, magnesium, calcium, and other various microelements that nutrify plants, Al Rawahi said. This is beneficial for a wide diversity of crops, from vegetables and fruits, to natural and aromatic plants, and even ornamental plants. This can help Oman become more self-sufficient and have better competitiveness against imported products, Al Rawahi added.

Why is this important? The global production of fertilizers is responsible for around 1.4% of annual CO2 emissions — almost equivalent to the emissions of Germany alone, Carbon Brief reports. IPCC’s sixth assessment report on mitigation published last year found that rising nitrous oxide emissions are “dominated by agriculture, notably from manure application, nitrogen deposition and nitrogen fertilizer use,” Carbon Brief said. Additionally, numerous studies link the exposure of traditional pesticides and fertilizers to serious effects to human health such as cancer, effects on reproduction, immune and nervous systems, along with disruptions to vital environmental ecosystems and the spread of aquatic hypoxia or “dead” zones in the oceans where there a reduced level of oxygen in the water.

Palm is plentiful in our region: If successful, Oman’s program has the potential to spread across the region given the widespread presence of the tree. Saudi Arabia has around 31 mn palm trees, and UAE palm tree supplier Date Palm Dubai said that the UAE has about 44 mn date palm trees as of 2020. In 2018, Egypt recorded having 15.5 mn palm trees planted on an area of 86k feddans.