The UAE and GER taking strides towards climate protection at COP29 with discussions on carbon pricing, industry decarbonization and cross-regional energy cooperation

During the United Nations Climate Change Conference COP29 in November 2024 in Baku, Azerbaijan, the UAE and Germany tackled some of the most pressing issues in the energy and climate sphere. Through several exchanges, they paved the road for effective carbon pricing policies in the UAE, identified key conditions to build new leading green industries in both the UAE and Germany and promoted energy cooperation between Europe and the MENA region. The discussions took place in two joint side events hosted by the Emirati-German Energy and Climate Partnership and a multilateral side event.

UAE and GER explore foundations for effective carbon pricing

The side event “Next Steps for Effective Carbon Pricing” featured a fireside chat between Prof. Dr. Ottmar Edenhofer, Director at the Potsdam Institute for Climate Impact Research (PIK) and leading expert on carbon pricing, and Mrs. Athra Alblooshi, Climate Change Analyst at the UAE Ministry of Climate Change and Environment (MOCCAE), exploring the UAE's plans for implementing carbon trading mechanisms. Welcome remarks from the German side were delivered by Dr. Dirk Weinreich, Head of Division of Climate Legislation and Emissions Trading at the German Federal Ministry for Economic Affairs and Climate Action (BMWK) and H.E. Dr. Alanoud Al Ali, Acting Assistant Undersecretary at MOCCAE, shared some insights on the discussions on carbon markets in the UAE.

The UAE are currently preparing a benchmarking study on carbon pricing and evaluating options for the introduction of a carbon market. In doing so, key points also include safeguarding corporate competitiveness, avoiding carbon leakage, and aligning with mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM).

Some of the key takeaways from the German and EU experience on carbon pricing shared during the event included the importance of clear policy including concrete integration pathways for each industrial sector to provide stability and planning security for companies. Furthermore, International and regional coordination on carbon markets is vital for increasing impact and addressing competitiveness.

All sides expressed strong interest in continuing these exchanges on carbon pricing in the framework of the Climate Partnership.

Hydrogen will be a key lever for decarbonizing industry

In a bilateral Emirati-German side event on “Decarbonizing Hard-to-Abate Sectors” representatives from EMSTEEL, Masdar, VNG and UNIDO discussed the role of hydrogen for industrial decarbonization. With the EU CBAM applying its definitive regime from 2026, companies in the UAE will be faced with carbon price signals when exporting products to Europe. This creates both pressure for transformation but also opportunities to build up new leading green industries.

The discussion emphasized the need for clear and harmonized standards and regulations, such as quotas and mandates, to stimulate hydrogen demand and provide investment security for hydrogen production and decarbonization projects. Stakeholders highlighted the importance of defining stringent parameters, such as emission thresholds for hydrogen production, to ensure sustainability and scalability.

International collaboration is an important lever for developing a robust hydrogen economy and supporting the creation of green industries. In his welcome remarks, H.E. Sharif Al Olama, Undersecretary at the UAE Ministry of Energy and Infrastructure (MOEI), highlighted the critical importance of the Emirati-German Energy and Climate Partnership in that regard, a sentiment echoed by the German representatives.

Continuing the exchange on energy cooperation between the EU and the MENA region

Building on the MENA-Europe Future Energy Dialogue 2024 (MEFED24) conference, a multilateral panel explored energy cooperation between Europe and the MENA region. The high-level panel discussion was organized by BMWK and IRENA, together with partners from Europe and the MENA region. Discussions focused on the implementation of the COP28 renewable energy expansion target and the role of storage and grid solutions.

Dr. Eng. Nawal Al Hanaee, Director of the Future Energy Department at MOEI, shed light on plans for an Arab electricity market and a grid interconnection with India. To integrate growing shares of variable renewable energy, the UAE will build on a diverse range of storage technologies. Speakers also stressed financing mechanisms and public-private partnerships as essential for advancing energy infrastructure, alongside long-term regulatory stability and strategic planning.

The events highlighted the UAE and Germany’s shared commitment to advancing climate solutions, fostering innovation, and deepening global partnerships.