TODAY: UAE’s Ocior Energy has its eye on a mega green hydrogen plant in Egypt
Good morning, ladies and gents. We have some big green hydrogen news from the region and an interesting update on what can be done about our bovine methane-producing friends. Let’s dive right in.
THE BIG CLIMATE STORY- Abu Dhabi-headquartered green fuels developer Ocior Energy has been named as the undisclosed company with its eyes on a space in Egypt’s green hydrogen push. The company signed preliminary agreements with the Egyptian government to build a USD 4 bn green hydrogen production plant in the Suez Canal Economic Zone.
^^ We have more details on this story and more in the news well, below.
THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single climate story dominating international headlines this morning, but the German Cabinet agreed to allocate EUR 57.6 bn (c. USD 63.2 bn) for green investments next year, Reuters reports. The allocation is up 60.2% from this year’s target as the country tries to build up subsidies to help the country reach net zero by 2045. Most of the funds will be earmarked to the country’s building sector, with EUR 18.9 bn for subsidies in renovations and new construction. Renewable energy subsidies have been set at EUR 12.6 bn, while EUR 3.7 bn will be directed to boosting Germany’s e-mobility charging infrastructure.
ALSO MAKING HEADLINES- Scientists are on the lookout for other factors that could have triggered this summer’s record breaking heat, The Associated Press reports, as July was officially deemed the Earth’s hottest month on record. They all agree that the biggest trigger was global warming from the continued burning of coal, oil, and natural gas, as well as El Niño, while some scientists believe other factors could be fueling a hotter planet such as cleaner air resulting from new shipping rules and a South Pacific volcano that released 165 mn tons of water into the atmosphere.
How and why: The dirty fuel used in maritime shipping releases particles that reflect sunlight in a manner that helps lower temperatures, so new international shipping rules triggered in 2020 to slash 80% of those cooling particles was a “kind of shock to the system,” atmospheric scientist Tianle Yuan said. The Hunga Tonga-Hunga Ha’apai underwater volcano is also a suspect, with scientists saying that its released water was acting as a heat-trapping greenhouse gas as vapor.
WATCH THIS SPACE #1- Egypt’s GAFI launches a simplified corporate incorporation process: Egypt’s General Authority for Freezones and Investment (GAFI) electronically incorporated Damietta for Green Ammonia through a newly launched online platform created to ease the process for investors, according to a statement. The platform will enable investors to digitally incorporate their firms and settle establishment fees electronically using e-signatures, GAFI CEO Hossam Heiba said. The new online system will allow investors to check for updates on the status of their applications while GAFI finalizes the process and receive personalized guidance based on their respective industries, including business structure frameworks and the required documents and fees for corporate incorporation.
WATCH THIS SPACE #2- Vestas expects wind turbine backlog to weigh on earnings: Danish wind turbine maker Vestas said it expects rising costs from a backlog of wind turbine orders to bring down its full year earnings, Bloomberg reports. This comes a month after a key supplier of blades to Vestas published an income warning on higher inspection and repair costs after it found faults with a blade type at one of its factories. It still expects full year earnings before interest and taxes to fall within the range -2% to 3%, marking an improvement from the -8% for last year. However, costs for an existing backlog soared to EUR 51.6 bn from a year earlier.
REMEMBER- Vestas is no stranger to some in the region: An international consortium led by Vestas is expected to begin operations at its 250 MW wind farm in Egypt’s Gulf of Suez by early 2024. It was named recently among companies planning to bid for a five- to seven-year operation and maintenance contract for the 120 MW Gabal El Zeit 3 plant in Egypt.
ALSO- Others could be gone with the wind: Siemens Energy’s wind turbine unit problem is not expected to recover before 2026, Reuters reports, citing JPMorgan and Deutsche Bank analysts. The predictions come days after Siemens Energy revealed that the issue will cost EUR 2.2 bn for its Siemens Gamesa. Deutsche Bank analyst Gael de-Bray has cut the price target for Siemens Energy to EUR 18 per share from EUR 20, maintaining a “hold” rating, while JPMorgan downgraded the stock to “neutral” from “overweight.”
WATCH THIS SPACE #3- Brazil could be among the SAF kings: Brazil has the capabilities to become among the leading global players in sustainable aviation fuel, Reuters reports, citing Boeing's Latin America and the Caribbean head Landon Loomis. “Brazil has the technical capacity, qualified workforce and raw material to post the concrete results and impacts needed for us to solve together this global challenge of how to decarbonize aviation,” Loomis said at a forum. His statements come as the aviation sector tries to meet ambitious targets to become carbon neutral by 2050 as set by IATA.
REMEMBER- The EU has agreed earlier this year to set binding targets for European aviation to boost its use of SAF in a bid to decarbonize the industry. The proposal aims to increase the use of SAF by ensuring fuel suppliers have 2% of the fuel accessible at EU airports as SAF in 2025, rising to 6% in 2030, 20% in 2035, and 70% in 2050. The EU carbon market is set to provide about EUR 2 bn to help airlines switch to SAF. Some 1.2% of fuels must also be synthetic fuels from 2030, rising to 35% in 2050. Aviation is a difficult sector to decarbonize and net zero aircrafts are not expected for another 10 years.
DATA POINT #1- Companies are scaling up green energy investments: 19% of global corporations have said they will increase their investments in clean energy and energy efficiency by more than half by 3Q 2024, according to a survey (pdf) of 751 international firms carried out by Honeywell and The Futurum Group. 86% of respondents are increasing investments in sustainability-linked initiatives this quarter, and 67% of EMEA-based companies — which include firms out of the EU and MENA — cite sustainability-linked initiatives as their top corporate focus for the next six months. 87% of global respondents and 61% EMEA corporations cited enhancing energy evolution and power efficiency as their foremost corporate priority for the coming six months. 78% of EMEA firms have said they have set out 2030 goals for energy evolution and efficiency, 73% have set out a strategy for emissions reduction, 74% have for pollution prevention, and 71% have 2030 circularity/recycling targets in place.
DATA POINT #2- Plastic litter in the oceans is overestimated, but still growing y-o-y, a new study in Nature Geoscience finds. Around 500k tons of plastic waste end up in the oceans each year, well below estimates from a 2015 study concluding that some 8 mn metric tons of plastic make their way to the oceans every year from rivers alone. However, marine pollution is still growing by around 4% y-o-y, the latest study finds. Incremental additions of plastic to global waterways lead to a significant accumulation of waste over time, the authors caution, noting that in two decades the current amount of 3 mn plastic tons on the global sea surface could double, according to the New York Times.
NON-CLIMATE REGIONAL HEADLINES:
- UAE: The Central Bank of the UAE has revoked the license of exchange house Dirham Exchange and canceled the registration of RMB Commercial Brokers Co over serious regulatory misconduct. (Emarat Al Youm)
- Saudi Arabia: Saudi Arabia’s aid agency KSRelief and the UK Foreign, Commonwealth and Development Office have signed a joint agreement to provide USD 9.16 mn in assistance to those affected by the Sudanese crisis. (Asharq Al Awsat)
- Egypt: The number of tourists visiting Egypt rose by 46.6% y-o-y in 2022 to report 11.7 mn, according to statistics agency CAPMAS, as the country bets on the key sector to bring in much needed FX for the struggling economy. (Al Shorouk)
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.
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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.