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Sunday, 22 October 2023

TODAY: Loss and damage talks stall + UAE’s F9 Capital forms a blockbuster JV in critical minerals mining

Good morning, friends. It’s shaping up to be a busy week with some significant investment updates emerging from the USE and Egypt and smattering of stories from across the region.

THE BIG CLIMATE STORY- Abu Dhabi-based investor F9 Capital Management and South Africa’s Q Global Commodities are partnering to invest USD 1 bn in African mines producing minerals necessary for the energy transition

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- China tightens export controls for EV-critical graphite: The Chinese government said on Friday it will begin imposing export curbs on graphite — a mineral essential for electric vehicle (EV) battery production — starting 1 December, 2023 in a bid to protect its ‘national security.’ Starting December, the country’s commerce ministry will begin requiring exporters to apply for export permits for certain graphite products. The curbs are expected to escalate trade tensions with the US, which began talks with the EU in March on a transatlantic bargain on minerals in a bid to counter Chinese dominance in the mining and EV sectors. China now processes more than 70% of the world’s graphite, and refines more than 90% of the mineral into the material used in EV battery anodes. Along with graphite, China processes more than half the world’s lithium, about two-thirds of its cobalt, and about one-third of the global supply of nickel.

The news made headlines in the international press over the weekend: Reuters | Bloomberg | Financial Times | CNBC | CNN

OVER IN COPLAND- Loss and damage fund talks fail to agree on recommendations ahead of COP28: The fourth — and what was meant to be the last — meeting of the COP27 Transitional Committee (TC) in Aswan failed to reach an agreement on who should fund the Loss and Damage Fund, where it should be based, and who would be eligible for support, the Financial Times reported on Saturday. The TC members were set to meet over three days — which was extended to four after it was clear no consensus was in sight — to agree on the recommendations the committee would put forth in the upcoming COP28 for the operationalization of the fund. They have decided to schedule another two-day meeting in Abu Dhabi on 3 November in a “last-ditch attempt” to bridge the differences, head of Global Political Strategy at Climate Action Network International (CAN) Harjeet Singh said.

The west are insisting Saudi + China contribute to the fund: While developed countries led by the US were responsible for the vast majority of historical greenhouse gas emissions behind global warming, they were not prepared to shoulder the responsibility of funding, special climate envoy to Barbados and a member of the transition committee Avinash Persaud told FT. Developed countries said they want heavy emitters like China and Saudi Arabia to put money into the fund, arguing that “the world has significantly changed in 30 years and those two are now wealthy enough to provide such aid,” Bloomberg writes.

And are pushing for the fund to be hosted by the World Bank: The G77 developing economies bloc plus China considered walking out of the talks earlier this week over a key dispute over the role of the World Bank in hosting the fund, FT reports. While developed countries see the World Bank as well-placed given its global outreach, its move to boost its commitment to funding climate goals, and its experience with similar financial bodies (such as the Green Climate Fund), developing countries would rather create a standalone facility under the remit of the UN. “The World Bank is not the institution that can best respond, that can best comply with what we’re looking for for this fund,” the Cuban chair of the G77 negotiating group told Bloomberg. The Loss and Damage Corporation also mentioned concerns over the Bank’s heavy emphasis on loans and debt in its approach, as well as the control that the US and other developed countries have on its decision making.

The COP28 presidency may be feeling the heat: If the members of the 24-person transition committee negotiating the global loss and damage fund “cannot reach common ground at the final gathering in Abu Dhabi next month, we are destined for very rocky negotiations in Dubai,” senior adviser in the global climate programme and the finance center at the World Resources Institute Preety Bhandari told FT.

WATCH THIS SPACE #1- KSA expected to ink an agreement with South Korea on clean hydrogen: South Korea’s President Yoon Suk Yeol landed in Riyadh yesterday to attend a bilateral investment forum that will reportedly see Saudi Arabia sign 51 agreements with the country worth USD 15.6 bn across several sectors including clean hydrogen production, Yonhap reports. South Korea and the kingdom are expected to sign off on a joint “hydrogen oasis cooperation initiative,” which aims to establish committees managing each step of the clean hydrogen value chain from production to storage and distribution, and facilitate partnership agreements between developers from both countries. Both countries' statistics agencies are also expected to ink a knowledge transfer agreement on “material on statistical production” of clean hydrogen, the news agency notes. In November last year, Saudi Arabia’s Public Investment Fund signed a USD 6.5 bn agreement with Korea Electric Power Corp (Kepco) and four other South Korean firms to build a hydrogen and ammonia production plant in KSA which is expected to have an annual generational capacity of 1.2 mn tons.

WATCH THIS SPACE #2- Hyundai and Kia eye 20% of MENA’s EV market by 2030: Hyundai Motor Company and Kia are targeting 550k of combined annual unit sales in the Middle East by 2030, snapping up 20% of the regional market, Korea Economic Daily reported on Friday. Hyundai Motors aims to sell 350k units by 2032 and Kia is targeting 210k unit sales by 2030. Hyundai also aims to double its portfolio by releasing six new EV models and Kia will nearly triple its EV lineup from the current four up to 11 models by 2027. The group is eyeing KSA's EV market as the biggest in the region, KED adds.

REMEMBER- Hyundai announced in September that it is planning to ink a formal agreement with Saudi Arabia to set up an EV assembly plant in the country. KSA also signed an MoU with Hyundai Motor Company for the construction of an EV and internal combustion engine manufacturing plant in January. Kia also debuted its EVs dedicated to the regional market earlier this month, two of which are expected to hit the market by 4Q 2023.

WATCH THIS SPACE #3- The global shipping industry is missing the emissions target: The world’s shipping industry is on course to miss the International Maritime Organization’s (IMO) target of having zero-emission fuels comprise 5% of its energy mix by 2030, according to a new report (pdf) presented during the Global Maritime Forum summit last week. The global pipeline of planned zero-emission fuel projects to power the IMO’s shipping industry decarbonization target would only meet a quarter of the sector’s 2030 target, the assessment notes. The report warns the global scale of zero-emission maritime vessels is inadequate to meet revised IMO targets of aiming for a net-zero mix of fuels by the end of the decade, noting that as of the end of last year there were a meager 24 ships adept at running of zero-emissions fuels, with another 144 in pipeline orders.

REMEMBER- Earlier this month, UNCTAD voiced concern over the aging of the global shipping fleet, saying that more than half of the world’s fleet is over 15 years old, leaving ship owners facing the challenge of renewing the fleet without clarity regarding alternative fuels, green technology and regulatory regimes to guide ship owners and ports. Decarbonizing the world’s shipping industry would require an additional USD 8 bn to USD 28 bn annually by 2050. IMO member countries gave the green light to a revised greenhouse gas strategy last July that outlines a net zero emissions goal for the shipping industry by mid century.


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Saudi Arabia will host the Future Investment Initiative from Tuesday, 24 October to Thursday, 26 October in Riyadh. The three-day event will bring together state leaders, policymakers, executives, academics, NGOs, entrepreneurs, and scientists to host panels on how to scale green technologies, mining, AI’s role in the energy revolution, and how geoeconomics will impact critical minerals, the program (pdf) outlines.

Tunisia will host the International Fair of Energy Transition from Wednesday, 25 October to Friday, 27 October in Tunis. The event will host global stakeholders in the energy sector and will focus on promoting financing energy transition and discussing the challenges of renewables, energy efficiency and storage, and electric mobility.

Cairo Water Week is taking place from Sunday, 29 October to Thursday, 2 November. This year’s event will focus on global green developments in the water sector with sessions discussing the development of scientific solutions, practical tools, policies, and concrete measures to overcome today’s water challenges. The five-day event is organized by Egypt’s Ministry of Water Resources and Irrigation, in partnership with the EU and FAO.

India will host the International Solar Alliance from Monday, 30 October to Thursday, 2 November in New Delhi. Some 96 member countries will participate and discuss mobilizing funds to accelerate solar deployments, the universalization of energy access through solar mini-grids, and diversifying manufacturing and supply chains for solar energy production.

The UAE will host the Forbes Middle East Sustainability Leaders Summit from Wednesday, 1 November to Saturday, 3 November in Abu Dhabi. The summit will gather international leaders in sustainability, technology, finance, and policy to drive green strategies globally. The agenda includes sessions on climate-smart cities, green mobility, sustainable finance, and sustainable tourism. The summit is expected to set the tone for international and regional dialogue and decision-making, including COP28 which will kick off in late November.

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

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