Weekly Highlights | From questionable Saudi Arabia net zero targets to Toyota investing in batteries

1. The Problem with Solar Energy in Africa​

By Real Engineering

• A 1000 km2 solar field located in the Saharan Desert could generate almost 7 TWh of energy each day. This quantity would satisfy nearly 100% of Europe’s energy needs

• Transporting electricity out of these remote regions is one of the major challenges. Currently, there are only two interconnections connecting North Africa to Europe

• Noor Solar Project in Morocco uses 2.5 to 3 billion litres of water every year for cooling, steam turbine and to keep the mirrors clean, making the issue of water stress relevant in the development of solar projects in Africa

2. Broken Promises, Energy Shortages and Covid-19 Will Hamper COP26

By The Economist

• Amidst the submission of new climate targets and commitments to climate finance by rich economies, the COP26 is set to be the most important climate conference since COP15 in Paris

• Current climate pledges – Nationally Determined Contributions (NDCs), which are voluntary targets set by each states – would only give a 50% chance of keeping warming under 2.1°C, and a mere 5% to stay below 1.5°C warming if met

• Hot issues to be discussed include carbon accounting, loss and damages, sector level pledges and keeping commitments to a 1.5°C increase maximum. Most of the discussions will gravitate around finance and responsibilities of individual countries

3. The Era of Cheap Oil May Be Gone for Good, These Experts Say​

By Bloomberg

• Instead of growing supply, companies are under pressure to limit their spending, causing a structural under-investment in new production that will keep oil prices higher for longer

• Among the banks seeing higher prices for longer, Goldman says $85 for 2023. Morgan Stanley bumped what it calls its long-term forecast up by $10 to $70 this week, while BNP Paribas sees crude at almost $80 in 2023

• While some of the key OPEC+ producers find themselves with spare capacity that they can dip into next year, others including Nigeria and Angola are already showing signs of struggling to lift production further

4. Brussels to Delay Decision on How to Classify Nuclear Power for Green Finance​

By Financial Times

• Brussels will delay long-awaited proposals on how to classify nuclear power and natural gas under the EU’s landmark labelling system for green finance

• Ten countries, including France, Finland, Poland and Hungary this week said it is “absolutely necessary that nuclear power was included in the taxonomy framework”

• The taxonomy will be used to judge whether investments made by member states are truly green and will form the basis for an EU “green bond standard” that will be used to issue €250bn in sustainable debt under the bloc’s recovery fund

5. Saudi Arabia, a Major Oil Producer, Targets Net Zero Emissions by 2060​

By NBC News

• The announcement was made by Crown Prince Mohammed bin Salman in brief scripted remarks at the start of the kingdom’s first-ever Saudi Green Initiative Forum

• Sausi Arabia will do so through a so-called “Carbon Circular Economy” approach, which focuses on carbon capture and storage technologies

• The announcement only pertains to Saudi Arabia’s efforts within its national borders, and does not impact its continued aggressive investment in oil and exporting its fossil fuels to Asia and other regions

6. All Manner of Industries Are Piling into the Hydrogen Rush​

By The Economist

• Hydrogen is expected to play a big role in greening hard-to-decarbonise sectors such as cement and steel, as well as in long-term energy storage

• In September Chevron, an American oil titan, unveiled a $10bn strategy for “new energy” that bets big on low-carbon hydrogen

• The other supermajors—bp, ExxonMobil, Royal Dutch Shell and TotalEnergies—have also announced investments in hydrogen clusters and technologies

7. Bringing Finance to Bear on the Just Transition

By Energy Monitor

• A successful green transition needs to be just and fair; effectively, the right climate policy tools can have negative social impacts if the social dimension is not included. For example, fear of losing jobs related to the fossil fuel industry must be addressed

• Issues surrounding the green transition, climate change and nature and social and inequality issues should make two sides of the same coin also for investors, as social backlash linked to the green transition could create financial risks

• Net-zero strategies are being implemented by an ever increasing number of actors, from governments to companies. The challenge will now be to ensure a just transition to net-zero economies

8. Toyota Pumping $3.4 Billion Into U.S. Battery Production To Amp Up Electric Vehicle Push​

By Forbes

• The move is part of the Japanese industrial giant’s broader initiative announced last month to spend $13.5 billion globally to catch up with competitors including General Motors, Ford and Volkswagen and Tesla

• Toyota has been a leader in hybrids for decades with the Prius and is the biggest seller of hydrogen fuel-cell electric cars with its zero-emission Mirai sedan. They have been slow to add models powered solely by batteries to its lineup

• The company also provided a game-changing boost to Tesla in 2010 when CEO Akio Toyoda gave Elon Musk’s company an idled auto plant in Fremont, California

9. Managing Water and Climate Risk with Renewable Energy​

By McKinsey

• McKinsey analysts examined data from more than 1,500 companies on the water consumption and carbon emission associated with their electricity purchases in 2019, in chemical and food-and-beverage processing sectors

• Companies in the chemicals sector recorded a 40% fraction of their purchased energy coming from water-stressed countries, while food-and-beverage processing sector just 20%

• It has been found that a 50% increase in renewables in water-stressed countries would lower chemical companies’ global carbon emission by 36%, and food-and-beverage processing companies’ emissions by 23%

10. Next 1,000 Unicorns to Come From the Green Industry, BlackRock CEO Says​

By The National

• “It is my belief that the next 1,000 unicorns won't be a search engine, won't be a media company. They will be businesses developing green hydrogen in green agriculture, green steel and green cement” said Larry Fink, BlackRock’s CEO

• About $20 trillion in investment is needed over the next two decades for companies and countries to become carbon neutral by the middle of the century

• In the first nine months of 2021, green social and sustainable bonds raised more than $777bn. That's more than 60% higher than the same period last year