UAE and Germany discuss carbon pricing and hydrogen certification at COP28

In focus of the activities hosted by the Emirati-German Energy and Climate Partnership at COP28 have been carbon pricing, green hydrogen certification and the EU Carbon Border Adjustment Mechanism. An important milestone was the high-level panel to announce the upcoming Middle East Europe Future Energy Dialogue (MEFED) taking place in Thessaloniki in September 2024. Other highlights were the launch of a bilateral study on the UAE wind energy potential.

UAE and Germany discuss carbon pricing and Carbon Border Adjustment Mechanism (CBAM) at COP28

The high-level dialogue “The Future of Carbon Pricing in Europe and the Middle East” attracted great interest and was attended by at least 170 participants. The UAE Minister of Climate Action and Environment, Mariam Al Mheiri, recognized the importance of a carbon price for climate protection in her opening statement. She added that the UAE is aims to introduce a system for monitoring, reporting and verification (MRV) of emissions by the end of 2024. Parliamentary State Secretary Stefan Wenzel responded in his opening that emissions trading is the most important policy instrument for achieving climate goals and welcomed the exchange with the UAE on carbon pricing. In the subsequent panel discussion, Malte Bornkamm (BMWK) addressed the Carbon Border Adjustment Mechanism (CBAM) and the German national emissions trading. UAE Undersecretary for Energy and Petroleum Affairs, Sharif Al Olama followed the event from the audience. The event was concluded by the UAE Ambassador to Germany H.E. Ahmed Alattar. Moderation was carried out by Henrik Schult (Guidehouse) and Eva Ramos (EAD).

Another high-level side event addressed the implications of the EU Carbon Border Adjustment Mechanism (CBAM) on bilateral trade between the UAE and Germany. The trade volume between UAE and EU has a rapidly increasing trend and amounted to 50 billion euros in 2022. Foreign trade with Germany has also increased significantly since 2020 (+51%) with strong import increases for LNG, heating oil and diesel from UAE to substitute Russian imports. Further strong increases can be observed in imports of iron and steel from the UAE. CBAM is expected to have a particular impact on the UAE's aluminum exports to the EU, with a volume of EUR 2.1 billion in 2022. In addition, impacts on the exchange of steel and iron as well as chemical products and fertilizers are expected. For the targeted hydrogen import from UAE, CBAM is providing incentives for a low carbon footprint.

Launch of joint study on wind energy potential of the UAE at COP28

The potential of wind energy has been explored in a joint study carried out by Guidehouse in collaboration with the UAE Ministry of Energy and Infrastructure. Offshore wind energy conditions are less favorable due to lower wind speeds in UAE’s territorial waters. Best onshore wind conditions have been identified in the Southwestern desert region of the UAE with mean wind speeds between 7.5 to 8 m/s at 150 m on annual average. Wind is stronger at night than during the day in the UAE. Combining wind and solar resources balances the power mix and allows for a higher utilisation of electrolysers to produce green hydrogen resulting in lower levelized costs of hydrogen. Find the full report in the publication section.