TODAY: Adnoc and Adnoc Gas move forward with carbon capture + Mubadala taps banks for its green finance plan
Good morning, ladies and gentlemen. Once again, we’re looking at a busy morning for climate in our neck of the woods, with carbon capture emerging as a big theme of the day.
THE BIG CLIMATE STORIES- Adnoc Gas has awarded a USD 615 mn engineering, procurement, and construction contract to Petrofac Emirates to build carbon capture infrastructure at the Habshan gas processing plant. Meanwhile, Adnoc has struck a partnership with Fertiglobe — a joint venture between Adnoc and OCI Global — for the pilot deployment of the world’s first cost-effective modular carbon capture unit by UK-based Carbon Clean.
THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single climate story grabbing the headlines this morning, but the European Parliament’s environment committee refused yesterday to approve two nominees aiming to head Europe’s climate agenda, Reuters reports. Both former Dutch Foreign Minister Wopke Hoekstra, the nominee for the EU’s upcoming chief of climate change policy, and Maros Sefcovic, the proposed EU green policies chief, failed to earn the green light from the committee during the hours-long hearings. They will now have to submit answers to extra questions asked by lawmakers today, who will then decide on whether to approve their new roles. Some of the lawmakers have said that both officials were unclear on how they would implement the bloc’s new green policies.
Mubadala names bank lineup to present its green finance plan to investors: Emirati sovereign wealth fund Mubadala has tapped Abu Dhabi Commercial Bank, First Abu Dhabi Bank, HSBC, and ING to present the company’s new climate finance framework to investors at a meeting that starts today and runs until Friday, Reuters reports. Published last month, the blueprint outlines Mubadala’s framework for providing green finance instruments like bonds, sukuk, loans, and medium-term notes.
WATCH THIS SPACE #1- Some good news on Egypt’s green hydrogen front: Egypt will operate its first green hydrogen facility in 2026, an Electricity Ministry source told Enterprise Climate, without specifying which facility. Trial stages at the unidentified facility are set to begin in mid-2025, our source said, expecting the upcoming period to see further investments in green hydrogen in the country. Egypt is working on having “competitive” green hydrogen pricing to help lure in potential investors, he added.
Aiming big: Egypt aims to produce up to 1.5 mn tons of green hydrogen per year by 2030 through 19 GW of generated energy from solar and wind projects, Youm7 reported on Tuesday, citing a source at the New and Renewable Energy Authority (NREA). The country aims to raise production to 5.8 mn tons by 2040 from 72 GW of generated renewable energy. This would allow for exporting 3.8 mn tons, which accounts for 5% of the global green hydrogen market, according to the source.
REMEMBER- Egypt is experiencing a green hydrogen bonanza: The Egyptian government signed several framework agreements during COP27 with foreign companies to construct several green hydrogen and ammonia facilities in the SCZone. The facilities would cost a combined USD 83 bn and collectively produce up to 7.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year. Egypt also approved incentives in May to boost the country’s green hydrogen sector and lure in much-needed foreign exchange inflows.
WATCH THIS SPACE #2- An Occidental DAC replica in Oman? US-based energy company Occidental is examining the possibility of setting up a direct air capture (DAC) project in Oman, Zawya reported on Tuesday, citing statements by Occidental’s President and CEO Vicki Hollub during Adipec in Abu Dhabi. The company has submitted a replica of a working DAC project to Oman, Hollub said, adding that there has been “enthusiasm” about the proposal.
REMEMBER- Oman is luring some in: Omani developer of carbon mineralization tech 44.01 and DAC company Aircapture are working on a DAC and mineralization project in the sultanate. Oman continues to get touted for its potential to host large-scale carbon capture projects. “Oman could be well suited for the deployment of DAC technologies. This is because of its abundant solar resources to power the DAC plants and availability of water resources and peridotite formations – both needed for CO2 mineralization with the goal of carbon removal," a report (pdf) by the International Energy Agency said in June.
Occidental ♥️ the Gulf: In August, Adnoc and Occidental signed a strategic collaboration agreement to evaluate the development of 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. They agreed yesterday to conduct a joint preliminary engineering study for the construction of the facility. Adnoc will also explore the possibility of participating in several DAC and CO2 sequestration facilities that are currently being developed by Occidental’s subsidiary 1PointFive in the US.
WATCH THIS SPACE #3- Abu Dhabi’s largest PV project is coming online soon: Taqa, Masdar, France-based EDF Renewables, and China’s JinkoPower expect to inaugurate their 2 GW Al Dhafra solar park “soon,” Taqa CEO and Managing Director Jasim Thabet said at Adipec yesterday, according to the National. The consortium had installed the last of the farm’s 3.5 mn PV panels back in April.
Private sector has to fulfill bulk of climate financing needs, IMF says: The majority of the USD 2 tn in annual climate investments needed in developing countries by 2030 will have to come from the private sector to avoid high debt burdens, the International Monetary Fund (IMF) said in a blog post one week ahead of the fund’s annual meeting to take place in Marrakech, Morocco. The IMF warns that governments will risk high debts if they try to reach net-zero goals solely through public investments and renewables subsidies. Relying mostly on public spending measures will become increasingly costly — as interest rates and weaker growth become more likely — possibly raising debt by 45% to 50% of GDP by midcentury, according to the blog post, which pointed to a chapter (pdf) in its latest Fiscal Monitor for further insight on how countries can balance achieving climate goals, fiscal sustainability, and political feasibility.
The Middle East region’s planned hydrogen capacity has doubled y-o-y, with final investment decisions reached in a handful of large projects that are expected to lead the “race to start exports by 2030,” S&P Global reports. Currently, there are 83 renewable hydrogen or ammonia projects in the region that collectively produce 9 mn MT of hydrogen each year.
MENA is booked and busy when it comes to clean hydrogen projects: Japan and Korea plan to award subsidies to kickstart the clean fuels market at the end of 2024 and begin awarding contracts by 2025, with deals expected to begin in 2027. By 2030, clean hydrogen projects in the Middle East are expected to produce and export 18.15 mn MT of hydrogen, of which 1 mn MT will be primarily low-carbon or renewable. S&P Global Commodity Insights estimates that these projects will need roughly USD 50 bn in capital. Meanwhile, it forecasts that the Middle East will dominate all other regions in the field, with production projected at 28 mn MT of clean hydrogen, and exports at 6.28 mn MT, in 2040.
Saudi is topping the green hydrogen charts: The cost of producing hydrogen in Qatar and Saudi Arabia was examined and compared by Platts — a business that assesses prices and market information — which concluded that Saudi Arabia leads the green hydrogen cost race. 1 kg of hydrogen, produced using steam methane reforming and carbon capture, cost Qatar USD 1.84 in September, a 5.75% increase from the previous month. Meanwhile, it costs Saudi USD 3.22 to produce hydrogen using Alkaline electrolysis, including the initial cost of equipment, with expenses remaining roughly the same as it was the month before.
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The Saudi Green Building Forum kicks off next week from Monday-Thursday, 9-12 October. The forum, hosted by the Saudi Municipal, Rural Affairs, and Housing Ministry, will focus on speeding up the construction industry's transition to carbon neutrality by promoting sustainable practices in energy, water use, and green cities.
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