EU’s Green Bonds to Slash 55 MTS of CO₂ Annually. Can it Hit Europe’s 2050 Net Zero Target?

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EU

The European Commission released its NextGenerationEU (NGEU) Green Bonds Allocation and Impact Report 2024 explaining how proceeds from green bonds are being used to combat climate change. The report highlights substantial achievements in reducing greenhouse gas (GHG) emissions. Therefore, the EU estimated that 55 million tons of CO₂ emissions should be avoided annually across the European Union to meet Europe’s net zero target.

Estimated impact per expenditure categoryEU green bonds

Source: EU Green Bonds Allocation and Impact Report 2024

Key Climate Impacts of EU’s Green Bond Projects

This year’s report has refined 2023’s methodologies for assessing the environmental impacts of green bond-funded projects. The findings reveal significant progress:

1. GHG Reductions

Projects funded by NGEU Green Bonds can avoid ~ 54.7 million tons of CO₂ annually. This is much higher than that of last year’s estimate of 44.2 million tons This accounts for approximately 1.5% of the EU’s annual emissions in 2022.

2. Sectoral Contributions

Investments focused on Clean Transport & Infrastructure in rail networks and zero-emission vehicles lead to a reduction in emissions. Clean Energy & Networks projects span solar and wind energy are significant. Additionally, Nature Protection and Biodiversity, sector although comparatively smaller, are also included in the analysis focusing on environmental restoration and preservation.

3. Methodology Enhancements

The analysis evaluated 2,096 milestones and targets robust quantifiable data. This expanded scope allows for a more comprehensive understanding of the climate benefits. Significantly, some sectors achieve higher emissions reductions per euro spent. Nonetheless, all investments must achieve climate neutrality by 2050.

NextGenerationEU: A Green Recovery Initiative

Launched in 2021, NextGenerationEU is an €800 billion recovery program meant to boost Europe’s post-pandemic recovery while advancing its green and digital transformation. The EU explains that the initiative aims to make the body more resilient and sustainable. A significant portion of its funding comes from NGEU Green Bonds, which play a critical role in financing climate-friendly projects.

To date, the EU has issued €12 billion in green bonds and notably, it’s the world’s largest green bond transaction. The European Commission plans to fund 30% of the NextGenerationEU program through green bonds. Consequently, this will make the EU the largest green bond issuer globally.

EU Issuancesgreen bonds EU ISSUANCESSource: EU

Strategic Importance of NGEU Green Bonds

NextGenerationEU Green Bonds are not only transforming Europe’s environmental landscape but also boosting global sustainable finance. Their benefits include:

  • Sustainable finance commitment reinforces the EU’s dedication to environmental sustainability.
  • Market liquidity introduces a highly rated and liquid green asset to investors.
  • Investor confidence attracts a broader range of investors while offering portfolio diversification.
  • Market growth inspires other issuers and strengthens the green bond market.
  • EU leadership enhances the European Union’s role in sustainable finance globally.

The European Commission issues its NextGenerationEU Green Bonds based on a structured framework designed to ensure transparency and accountability. This framework aligns with international standards, setting a strong foundation for sustainable investments across the EU.EU green bondsSource:

Inside the NextGenerationEU Green Bond Framework

The NextGenerationEU Green Bond framework revolves around four key pillars:

1. Use of Proceeds

Funds raised through these green bonds are allocated to nine key categories, including energy efficiency, clean energy projects, and climate change adaptation measures.

2. Expenditure Evaluation and Investment Selection

Investments are guided by the Recovery and Resilience Plans, which allocate 37% of their budgets to climate-related projects. These plans serve as the blueprint for the Recovery and Resilience Facility at the core of NextGenerationEU.

3. Management of Proceeds

The European Commission carefully monitors and tracks how the funds are spent, ensuring they are used for eligible green initiatives.

4. Reporting

The Commission provides two types of reports: Allocation Reports which highlight how funds have been distributed and Impact Reports demonstrate the achievements and environmental impacts of these investments. The first allocation report was released in 2022, followed by a comprehensive allocation and impact report in November 2023.

EU NextGenerationEU (NGEU) Green Bonds

Source: EU

Alignment with Global Standards

Noteworthy, the framework adheres to the Green Bond Principles of the International Capital Market Association (ICMA), a global benchmark for green bond issuances. This compliance was independently verified by Vigeo Eiris, part of Moody’s ESG Solutions.

They confirmed that the framework aligns with the EU’s broader Environmental, Social, and Governance (ESG) strategy. Furthermore, the evaluation assures investors that the framework contributes immensely to Europe’s sustainability goals.

Financing Mechanisms and Future Goals

The European Commission utilizes diverse instruments such as EU bonds, EU bills, and NGEU Green Bonds to fund policy programs. Funding plans are communicated bi-annually, with €712 billion expected to be raised through NGEU bonds by 2026.

Additionally, the EU also highlighted that it leverages funding to support external needs, including financing loans for Ukraine. Under the Ukraine Facility, the Commission plans to raise €33 billion in EU bonds from 2024 to 2027.

EU Green Bond Supporting Europe’s Green Transition

The NextGenerationEU Green Bond framework is one of the key propellers of the EU’s fight against climate change. As outlined before it follows strict principles, ensures transparency, and provides detailed reporting to ensure that “every euro” raised supports environmental and economic resilience. Investments funded by NGEU Green Bonds span critical sectors like clean energy, transport, and nature restoration, highlighting the importance of diverse efforts to achieve net-zero emissions by 2050.

The EU’s proactive strategy, supported by robust funding and transparent practices truly makes it a leader in sustainable finance. By fostering innovation and scaling investments, NGEU Green Bonds are shaping a greener, more resilient Europe.

Source:

  1. NextGenerationEU Green Bonds – European Commission
  2. Green Bonds Allocation and Impact Report 2024

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BHP’s $14B Investment Plan for its Chile Copper Mines. Will it Impact Global Copper Supply?

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BHP COPPER

BHP has set ambitious plans for its largest copper mine i.e. its Escondida mine and other operations in Chile, with investments ranging from $10.7 billion to $14.7 billion over the next decade. The mining giant aims to address declining ore grades and prepare for the eventual closure of the Los Colorados plant. The Escondida mine plays a significant role in this strategy, with its upcoming projects projected to initiate production between 2027 and 2032.

BHP Americas president Brandon Craig told Reuters in a recent interview,

“We think the deficit is going to be around 10 million tons by 2035.”

He further estimated a $250 billion cost to develop enough mines to match demand and hailed it as quite a challenging task for mining companies.

BHP Copper forecast

Source: BHP

Escondida: BHP’s Copper Catalyst

Located in the Atacama Desert of Northern Chile, Escondida, the largest copper mine lies 170 km southeast of Antofagasta. Escondida in Spanish means “hidden,” which is synonymous with the copper deposit that’s buried under hundreds of meters of overburden. The mine feeds three concentrator plants and two leaching operations, producing copper essential for global industries.

BHP owns a 57.5% stake in Escondida, with Rio Tinto holding 30% and JECO Corp controlling the remaining 12.5%. Their joint efforts have made Escondida a vital player in boosting Chile’s GDP.

We also discovered from its corporate deck that BHP’s Chilean mine has delivered 38 million tons of copper since 1990 which accounted for 7% of global copper mine output.

BHP’s Chilean Copper Dominance

BHP COPPER chile

Source: BHP

To address declining ore grades, BHP plans to expand its processing facilities and implement advanced copper extraction technologies. For example, introduce leaching technologies to extract copper from sulfide ores.

The company will launch four new projects at Escondida, starting between 2027 and 2032, with peak investments expected during fiscal years 2030 and 2031.

Key Projects Supporting BHP’s Investment Plans

Let’s take a look at the investment breakup as outlined by MINING.COM.

  • The new concentrator will have a capacity of 220,000 and 260,000 tpa from 2031 or 32, with an estimated capital budget of $4.4 billion to $5.9 billion.
  • Expand production at Laguna Seca by 50,000 to 70,000 tpa starting in 2030/31, with an investment of $2 billion to $2.6 billion.
  • New leaching facilities will add ~ 35,000 to 55,000 tpa from 2030/32 onwards, requiring a capital expenditure of $900 million to $1.3 billion.
  • The Los Colorados facility will continue operations until fiscal year 2029, maintaining an output of 130,000 to 145,000 tpa before its scheduled closure.
  • Allocate $2.8 billion to $3.9 billion for its Pampa Norte division, which includes the Spence and Cerro Colorado mines.
  • Boost production at Pampa Norte by 125,000 to 155,000 tpa. Restart the Cerro Colorado mine, using supergene leaching to deliver 85,000 to 100,000 tpa.

Through these investments, the company expects to stabilize production at 1.4 Mtpa by the early 2030s and maximize output from Chile’s copper-rich regions, including Escondido.

With these strategies and rationale, BHP aims to overcome the challenges of depreciating ore grades and increasing project complexities. Significantly, the investment, ranging between $10 and $14 billion, will be at a capital intensity of $23,000 per tonne of copper equivalent (CuEq) to achieve its targeted expansion plans.

BHP’s Copper Output: Meeting the Demand Surge

Copper, a pinkish-orange metal known for its exceptional conductivity and non-corrosive properties makes it a daily life metal. It’s widely used in electrical systems and has antimicrobial properties as well. The global copper demand is projected to rise in the coming years, but BHP has warned of a possibility of a 10mmt supply deficit by 2035.

Chile, the world’s largest copper producer, contributes 28% of the global supply annually. BHP’s operations contribute solely to 27% of Chile’s copper output.  

  • In 2023, BHP produced 1,716 kilotons (Kt) of copper. The company forecasted global demand to be approximately 2X in the next 30 years.

The rising demand for copper will be driven by the global energy transition and advancements in technology. Particularly by the growing adoption of electric vehicles and the rapid expansion of data centers.

Copper demand is projected to grow ~70% through to 2050.
(Copper semis end-use demand by key theme, Mt)

Copper demand BHP

Source: BHP

Streamlined Operations and Strategic Advantages

Further putting the expansion plans into perspective, BHP expects to boost copper production by 430,000 to 540,000 tpa in its Chile operations. It shows the company’s adeptness in streamlining its operations and managing fewer but larger assets by efficiently using its infrastructure and workforce.

Being a pioneer in mining, it has time and again proved its deep geological knowledge to minimize technical risks while exploring low-risk brownfield opportunities.

Even though the global copper industry faces significant challenges, with a looming supply deficit nearly equal to 50% of today’s production, BHP remains committed. It’s adopting new technologies over time and fostering strong, mutually beneficial relationships with stakeholders to ensure sustainable growth amid market downturns.

As outlined earlier, by investing heavily in advanced technologies and strategic expansions, BHP ensures Escondida remains a critical pillar of the global copper supply and continues supporting the world’s current and future energy transition goals.

Data sources:

  1. BHP to spend up to $14bn in Chilean copper expansion – MINING.COM
  2. BHP bets billions on Chile mines to face global copper crunch – MINING.COM
  3. BHP 2024 Chilean copper site tour

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HSBC Drops Carbon Credit Trading Amid Voluntary Carbon Market’s $1B Decline

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HSBC Drops Carbon Credit Trading Amid Voluntary Carbon Market’s $1B Decline

HSBC Holdings Plc, Europe’s largest bank, has abandoned its plans to establish a carbon credits trading desk, per a Bloomberg report. The decision reflects mounting concerns about the voluntary carbon market (VCM), which has been plagued by greenwashing allegations and declining corporate confidence. 

Originally intended to trade credits and finance project developers, HSBC’s carbon credit desk initiative was short-lived, with the team now reassigned to other roles.

From Pledges to Pivots: HSBC Rethinks Carbon Market Role

HSBC unveiled its HSBC Infrastructure Finance (HIF) last July, a new business unit dedicated to infrastructure financing and project advisory for low-carbon initiatives. The unit seeks to capture significant deals in major markets with expertise from the bank’s Global Banking Real Asset Finance.

This move aligns with HSBC’s broader climate strategy, including its 2050 net-zero target and Net Zero Transition Plan. During the launch, HIF underscores HSBC’s commitment to supporting the low-carbon economy through sustainable financing and risk management initiatives. But only four months later, the unit had to stop operating. 

HSBC Net Zero Pathway

HSBC net zero journey to 2050

HSBC’s operational and supply chain emissions are modest compared to its financed emissions. Still, cutting these emissions is vital to its net zero goals. 

The bank aims to achieve carbon neutrality by 2030 through 100% renewable electricity and minimized environmental impacts. Key measures include reducing emissions from energy use, travel, and supply chains. 

HSBC also pledged $1 billion last year to accelerate global climate technology advancements, particularly in the following areas:

This is part of HSBC’s broader commitment to achieving 2050 net-zero emissions across its financed portfolio.

The funding builds on HSBC’s existing climate initiatives, including HSBC Innovation Banking and Climate Tech Venture Capital. Both are designed to advance cleantech sectors like energy and transportation. 

Additionally, HSBC invested $100 million in Bill Gates’ Breakthrough Energy Catalyst Fund, further supporting green projects and scaling climate-focused innovations.

Earlier this year, the bank teamed up with Google Cloud to support companies driving climate innovation via the Google Cloud Ready-Sustainability (GCR-Sustainability) program. This initiative aids businesses in reducing carbon emissions, improving supply chain sustainability, and managing ESG data to address climate risks.

Through this collaboration, HSBC will provide financial backing to selected companies, aligning with its $1 billion commitment to climate tech ventures in areas such as EVs, battery storage, and sustainable food systems by 2030.

However, its recent decision to drop its carbon credit trading desk speaks of a sudden shift in the financier’s strategy. It sent shockwaves in the VCM, showing how corporates are taking market issues into account.

Why Pull Back From the VCM?

The voluntary carbon market, which peaked a few years ago, experienced a sharp contraction in 2023, shrinking by nearly 25% to an estimated $1 billion. 

carbon credit offsets annual retirements
Source: MSCI Note: Data sourced from registries ACR, ART Trees, BioCarbon, CAR, CDM (NDC eligible credits only), Climate Forward, EcoRegistry, GCC, Gold Standard, PlanVivo, PuroEarth, UKPC, UKWCC and Verra.

Concerns about the market’s integrity have driven major companies to scale back their reliance on offsets. These include Google, Delta Air Lines, and EasyJet. They are now prioritizing direct emission reductions over purchasing credits, reflecting a broader trend across industries.

One major issue undermining the VCM’s credibility is the over-issuance of carbon credits. Some of these credits, intended to represent the avoidance or removal of one metric ton of CO₂, fail to deliver the promised climate benefits as reported by studies. This has led to a loss of trust among buyers and a corresponding decline in market activity.

HSBC’s decision follows a similar move by Shell Plc, which recently announced plans to divest a majority stake in its nature-based carbon projects. Despite being the largest publicly disclosed buyer of carbon credits last year, Shell is reevaluating its approach amid market uncertainties.

Banks like Bank of America have also exercised caution toward the VCM due to its lack of liquidity. Abyd Karmali, Bank of America’s environmental business advisory lead, described the past two years as challenging for the market, which has seen declining participation and interest.

Shifting Priorities: HSBC Targets Cleantech

HSBC’s decision aligns with the vision of its new CEO, George Elhedery, who assumed the role in September. The new leadership has since focused on streamlining the organization. 

While HSBC steps back from direct involvement in carbon credit trading, it remains committed to addressing emissions. The bank’s latest transition plan emphasizes purchasing credits to address residual emissions and supporting Climate Asset Management, its joint venture with Pollination, to develop new carbon credit pipelines.

The regulatory landscape is also evolving, with COP29 negotiators advancing Article 6.4. It is a framework that allows countries and corporations to trade carbon reductions. This development, along with new quality standards from the Integrity Council for the Voluntary Carbon Market, aims to restore confidence and liquidity in the market.

HSBC’s retreat from carbon credit trading underscores the challenges facing the VCM as it struggles with integrity issues and waning demand. Europe’s largest bank pivot reflects a broader trend of recalibrating strategies to align with evolving market and regulatory conditions.

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Zefiro Methane Tackles Methane Emissions: Completes its First Oklahoma-Based Gas Well Remediation Project

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Zefiro Methane

Zefiro Methane Corp. (ZEFI) announced that its subsidiary, Plants & Goodwin, Inc. (P&G), has successfully completed its first gas well remediation project in Oklahoma. The project involved a complex operation known as “plug and abandonment” on a deep gas well in Custer County, Oklahoma. The well, 15,000 feet deep, required the removal of 5,000 feet of casing to seal it permanently. This operation is expected to generate carbon offset products approved by the American Carbon Registry. 

Zefiro Methane’s Founder and Chief Executive Officer Talal Debs commented,

“Too many Oklahomans and Americans living across the south-central United States are still forced to navigate the public health threats posed by these vestiges of a bygone era. The completion of this project not only represents Zefiro’s successful entry into a key marketplace but also reinforces the Company’s forward momentum and total commitment to executing our growth strategy by helping more of our neighbors combat this legacy issue.”

Unplugged Wells: A Major Challenge Across the U.S.

For decades, fossil fuel companies in the United States have drilled oil and gas wells to boost production, consumption, and exports. Once these wells become unprofitable, they are often abandoned. Many are left unplugged or improperly sealed, leading to environmental risks and fueling climate change.

Zefiro Methane’s press release explained that in the U.S., millions of oil and gas wells remain unplugged. For example, Oklahoma has about 18,000 known abandoned wells, while Texas and Louisiana have thousands more.

  • Experts estimate it could cost up to $158 billion just to plug the suspected 1.14 million unplugged wells in these three states alone.
  • Nationwide, sealing all abandoned wells could cost as much as $435 billion.

Dangerous Methane Source

Abandoned and unplugged oil and gas wells are leaking methane which is a potent greenhouse gas. Methane is 25X stronger than carbon dioxide at trapping heat and is a powerful contributor to global warming. This gas causes climate change, pollutes water, and is harmful to human health.

oil and gas methane emissions EPA

Source: EPA

Financial Burden on States

Unplugged oil and gas wells create significant environmental and financial risks. When these wells become orphaned, meaning abandoned without responsible parties, they pose a burden on taxpayers with the costly cleanup. The responsibility to manage these wells falls on the states. Moreover, funds from industry fees and bonding requirements might not cover the costs.

Due to improper management, they release harmful pollutants, leading to air pollution, groundwater contamination, and degraded soil quality. These environmental impacts are highly detrimental to ecosystems, wildlife, and the land.

Safety Hazards

Another significant hazard of these unplugged and abandoned wells is the risk of explosions. It then becomes a persistent threat to both communities and the environment. Thus, addressing these wells is crucial to minimizing their long-term impacts.

Zefiro Methane

Source: Zefiro Methane

Let’s see what other leaders of Zefiro Methane remarked on this project.

Zefiro’s Chief Commercial Officer Tina Reine commented,

“Now more than ever, investors throughout the international voluntary carbon marketplace are seeking offset products that can immediately help clean up our critical air, land, and water resources. The expertise of the oil and gas well remediation specialists on this project have further diversified both Zefiro’s operational presence and unique portfolio of high-quality, verified carbon credits, and our entire team cannot be more excited to continue meeting this long-unaddressed sector demand.”

Senior Vice President of Business Development and Chief Executive Officer of P&G Luke Plants commented,

“The Custer County project is the largest leap forward that our environmental remediation and carbon markets teams have taken together to help solidify Zefiro as the methane abatement sector’s leading comprehensive service provider. This successful effort is indicative of our environmental service division’s drive to help plug more of these wells throughout the south-central United States and in every corner of the country by expanding technical capacity, making operations even more efficient, and helping generate high-quality carbon credits.”

Zefiro Methane Credits: Maximizing Climate Impact

Zefiro also noted that its methane abatement credits deliver immediate and impactful climate solutions. As said before, methane has a significantly higher global warming potential than CO2 and has contributed to 30% of global temperature rise since the Industrial Revolution.

By focusing on methane reductions, Zefiro provides high-value credits that have significant demand for their ability to create measurable environmental benefits. These credits not only help bridge the gap for companies striving to meet net-zero goals but also play a crucial role in tackling the urgent challenge of climate change.

Expanding into New Regions

All said and done, the company is tackling the unplugged abandoned wells crisis seriously. It recently launched operations in West Virginia and acquired companies in Ohio and Pennsylvania to strengthen its capabilities nationwide. The company has partnered with federal and state agencies, including the National Park Service and the Commonwealth of Pennsylvania, to seal orphaned wells.

Additionally, it plans to expand its remediation efforts into other southern states like Texas and Louisiana within the next year. These regions also harbor thousands of abandoned oil and gas wells, many of which are not yet properly sealed.

By addressing methane leaks, which trap heat 25 to 85 times more than carbon dioxide, Zefiro is protecting communities and combating climate change efficiently.

Sources:

  1. Zefiro Methane – News: Zefiro Methane Corp. Completes Its First Ever Oklahoma-Based Well Remediation Project
  2. Zefiro Corporate Presentation 

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COP29: Singapore and Peru Seal the Deal on Article 6 Carbon Credits Framework

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Singapore carbon credits

Singapore’s Ministry of Trade and Industry (MTI) announced on Nov. 21, during the COP29 climate summit in Azerbaijan, that it has substantively concluded negotiations on a bilateral carbon trading agreement with Peru. The Implementation Agreement (IA), aligned with Article 6 of the Paris Agreement will allow Singapore to purchase carbon credits from Peru.

Singapore’s Minister for Sustainability and the Environment and Minister-in-charge of Trade Relations, Ms Grace Fu, said,

“The successful conclusion of substantive negotiations on the Implementation Agreement with Peru marks a significant milestone in our collective efforts to combat climate change and achieve our climate targets through cooperation. We thank our Peruvian counterparts for their partnership to advance global climate action. When the agreement is signed, we look forward to the private sector utilizing this agreement to develop carbon credits projects to actualize concrete environmental outcomes.”

Carbon Credits Cooperation: Unlocking the Implementation Agreement

This partnership builds on a 2022 memorandum of understanding (MOU) between the two countries, which laid the foundation for bilateral cooperation in carbon markets.

The next step involves formalizing the agreement through an implementation signing. The key highlights of the collaboration and the agreement include the following:

  • The collaboration aims to boost mitigation efforts and scale effective climate solutions, helping both countries advance their climate goals.
  • The agreement also creates a framework for generating and transferring Article 6-compliant carbon credits internationally.
  • It defines clear criteria and processes for developing carbon credit projects. It also outlines how credits will be transferred between Singapore and Peru.
  • The agreement outlines steps to ensure independent and robust accounting and eliminate double counting of carbon credits.

Once completed, Singaporean companies liable for carbon taxes can purchase credits from Peru to offset up to 5% of their taxable emissions. This marks a significant step in Singapore’s efforts to explore alternative pathways to reduce its carbon footprint.

COP29 Spotlight: Singapore Expands Carbon Market Ties

Singapore has been active in advancing carbon credit initiatives at COP29 and achieved some important milestones in this space. On Nov. 18, the Singapore Sustainable Finance Association signed a pact with five major carbon market associations representing Malaysia, Indonesia, Singapore, Thailand, and ASEAN to create a unified ASEAN Common Carbon Framework. This collaboration aims to reduce implementation costs and unlock regional carbon project opportunities.

Recently, Singapore and Zambia signed a similar Memorandum of Understanding (MOU) to collaborate on carbon credits aligned with Article 6 of the Paris Agreement at the COP29 summit. This was announced on November 19. The MOU enables both countries to share best practices and knowledge on carbon credit mechanisms. It also helps identify carbon credit projects that benefit both nations and support their climate goals.

Singapore carbon credits

Source: The Straits Times

Singapore has already signed implementation agreements with Papua New Guinea and Ghana, although trading under these agreements has not started.

The country is actively engaging with over 20 countries on carbon markets, most of which remain in the MOU phase. MTI revealed that the country has signed similar agreements with Cambodia, Chile, Fiji, Kenya, Lao PDR, Mongolia, Peru, Rwanda, Senegal, Sri Lanka, and the Philippines.

Peru now joins Bhutan, Vietnam, and Paraguay as countries that have reached the advanced stage of finalizing crucial issues on carbon trading with Singapore.

A Win-Win for Sustainability and Development

Singapore faces significant challenges in decarbonizing due to its lack of alternative energy resources Therefore, buying carbon credits seems like the most viable solution. Thus, the country can mitigate carbon emissions by funding projects with the parenting county.

Singapore carbon emissions

For Peru, this agreement provides access to international carbon markets, bringing investments into sustainable projects such as reforestation. Such projects not only address environmental goals but also promote local development, create green jobs, and foster innovation.

Peru’s Deputy Minister of Strategic Development of Natural Resources of the Ministry of Environment, Ms Raquel Soto, said,

“The Implementation Agreement with Singapore brings significant benefits for Peru, enhancing our ability to address climate change while driving sustainable development. Through this agreement, we can access international carbon markets to channel investments into high-quality mitigation projects that support our environmental and economic goals. It reinforces Peru’s leadership in leveraging Article 6 mechanisms of the Paris Agreement to promote innovation, create local green jobs, and achieve our climate commitments in a transparent and effective manner. This partnership with Singapore underscores the power of international cooperation in building a more sustainable future.” 

MTI emphasized Singapore’s commitment to upholding transparency, quality, and accountability in carbon markets. With these growing partnerships, the Southeast Asian nation can eventually be a leader in global carbon markets and trade carbon credits effectively. Last but not least, the country is leveraging international cooperation to address its sustainability challenges while supporting global climate goals.

Sources:

    1. S’pore and Peru’s carbon trading agreement reaches advanced stage | The Straits Times
    2. Conclusion of Substantive Negotiation on IA with Peru

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Indonesia’s Bold Push to Net Zero: Shutting Down All Coal Plants in 15 Years

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Indonesia’s Bold Push to Net Zero: Shutting Down All Coal Plants in 15 Years

Indonesia has unveiled an ambitious plan to transition away from fossil fuels and achieve net-zero emissions by 2050, a decade earlier than its previous target. Speaking at the G20 Summit in Brazil, President Prabowo Subianto announced a timeline to retire all coal-fired and fossil-fueled power plants within 15 years. 

From Coal to Clean: Indonesia’s 15-Year Plan for Energy Revolution

The Southeast Asian nation aims to replace its fossil fuel capacity with over 75 GW of renewable energy, utilizing its rich geothermal resources and expanding its solar and wind infrastructure. This commitment marks a significant shift for a country heavily reliant on coal and natural gas. These energy sources account for almost 80% of Indonesia’s electricity production. 

Indonesia Power Mix
Source: BloombergNEF

Indonesia’s coal-fired power emissions surpassed 185 million metric tons of CO₂ equivalent (MtCO₂e) in 2023. This makes the country a significant contributor to global power sector emissions. With coal dominating its electricity mix, Indonesia remains heavily reliant on this fossil fuel for energy production. 

As of the end of 2023, Indonesia’s combined wind and solar capacity was less than 1 GW, per BloombergNEF data above. This underscores the vast scale of transformation required to meet its targets. 

Despite these challenges, the country is determined to pivot towards renewable energy and be a regional leader in the green energy transition.

Building on Global Partnerships

Indonesia’s ambitious agenda builds on the $20 billion Just Energy Transition Partnership (JETP) deal signed in 2022. This initiative, co-led by nations like the U.S., Japan, and European countries, aims to fund early coal plant retirements and accelerate renewable energy adoption. 

However, progress has been slow. Much of the pledged funding remains undelivered, with officials expressing the urgency of receiving the support to achieve its goals.

President Prabowo’s announcement underscores Indonesia’s intent to lead by example, revealing a more aggressive approach toward reducing carbon emissions. His predecessor initiated the JETP deal, but Prabowo’s leadership seeks to overcome the challenges that have stalled its progress.

Earlier this month, Indonesia inked a $10 billion agreement with China at the Indonesia-China Business Forum. The event focuses on economic growth in clean tech, biotechnology, water conservation, and mining. 

Indonesia’s nickel industry remained a focal point, with Chinese firms like GEM Co. partnering with PT Vale on a $1.42 billion HPAL plant. Investments by Tsingshan and Huayou Cobalt further affirm Indonesia’s vital role in supplying nickel for EVs, batteries, and green technologies.

Nickel and Nature: Leveraging Resources for Climate Goals

Indonesia plans to tap into its vast natural resources to drive its energy transition and reach net zero. The country is rich in geothermal energy, making it an ideal candidate for large-scale renewable energy projects. 

Geothermal reserves distribution in Indonesia
Source: Research Gate

Alongside geothermal, the government plans to expand solar and wind capacity to bridge the gap left by retiring fossil fuel plants.

Additionally, biodiesel production will play a significant role in the transition. Indonesia has been using palm oil to produce biofuels, and President Prabowo emphasized its importance in reducing dependence on coal and gas. 

Beyond energy generation, Indonesia’s expansive rainforests offer a unique opportunity to generate carbon credits. The country aims to produce over 550 million tons of carbon credits, helping offset emissions and contributing to the global fight against climate change.

In September, President Prabowo unveiled plans for a $65 billion green economy fund by 2028. This innovative fund will leverage carbon credit sales from large-scale environmental projects, including forest preservation and reforestation. Managed by a “special mission vehicle,” the initiative will centralize sustainable activities nationwide. 

Indonesia’s nickel industry is also pivotal to its economic strategy. In 2023, the country produced over half of the world’s mined nickel, solidifying its position as a leading global supplier of metallic commodities. Despite falling nickel prices, Indonesia’s cost-efficient production remains robust.

  • S&P Global Commodity Insights forecasts Indonesia’s mined nickel output to hit 2.1 million metric tons in 2024. This exceeds 50% of global production and doubles the country’s 2020 levels, reinforcing Indonesia’s dominance in the nickel market.

Bold Targets, Big Challenges: Will Indonesia’s Green Vision Succeed?

Hashim Djojohadikusumo, Indonesia’s climate envoy to COP29, outlined the nation’s target to install 100 GW of new energy capacity over the next 15 years. Of this, 75%—or 75 GW—will come from renewable energy sources. These projects will add to the country’s existing installed capacity of over 90 GW, of which coal currently dominates.

The plan involves a massive budget of $235 billion, technology, and scientific expertise.

However, the scale of these ambitions raises questions about feasibility. With renewables currently accounting for less than 15% of Indonesia’s energy mix, the road to 75 GW of renewable capacity will require significant investments in infrastructure, technology, and workforce training.

Moreover, the nation’s reliance on coal exports as a major revenue source adds economic complexity to the transition. Retiring coal plants will not only require financial support from international partners but also a clear strategy to manage the social and economic impacts on coal-dependent communities. Amid all these challenges, President Prabowo’s leadership signals a new chapter in Indonesia’s energy policy. 

With global eyes on its progress, Indonesia’s journey to net zero will be a litmus test for the feasibility of large-scale energy transitions in emerging markets. If successful, it will show that even coal-reliant economies can shift toward sustainable energy with the right policies and support.

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Nvidia’s $35B Q3 Revenue: Record AI Growth Meets Rising Environmental Challenges

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Nvidia’s $35B Q3 Revenue: Record AI Growth Meets Rising Environmental Challenges

Nvidia posted impressive Q3 results, exceeding expectations with $35 billion in revenue—a 94% year-over-year surge. Driven by booming artificial intelligence (AI) demand, the company’s growth underscores its leadership in tech innovation. However, Nvidia’s meteoric rise also highlights its environmental challenges, as energy-intensive AI operations draw attention to sustainability and carbon emissions.

Nvidia’s Q3 Earnings Surge Amid Booming AI Demand

Nvidia, the world’s largest publicly traded company by market cap, reported exceptional third-quarter results, driven by robust demand for its AI-focused chips. For the quarter ending October 27, revenue soared to $35 billion, a 94% increase from $18 billion last year. It also beats analyst’s estimates of $33.2 billion as shown below.

Nvidia Q3 2024 revenue

  • The chipmaker’s net income more than doubled to $19 billion, compared to $9 billion in Q3 2023. Adjusted earnings per share stood at 81 cents, surpassing Wall Street’s expectations of 75 cents per share.

Nvidia’s data center revenue reached $30.8 billion, marking a 112% year-over-year growth. This was fueled by the Hopper platform’s popularity for AI applications, including large language models and generative AI tools. With gaming revenue also rising 15% to $3.3 billion, Nvidia continues to solidify its dominance across multiple sectors, driving the future of AI innovation.

CEO Jensen Huang highlighted the company’s pivotal role in AI adoption, stating: 

“The age of AI is in full steam, propelling a global shift to Nvidia computing.” 

Looking ahead, Nvidia anticipates Q4 revenue of $37.5 billion, slightly above analysts’ estimates of $37.09 billion. The company also provided updates on its next-gen Blackwell AI chips, set for production shipments in 2025. However, supply constraints are expected to persist through 2026, according to Chief Financial Officer Colette Kress.

Nvidia’s stock, which has surged 195% year-to-date, dipped 1% in after-hours trading despite its strong quarterly performance. Analysts remain optimistic though, emphasizing Nvidia’s leadership in AI. 

Nvidia stock Q3 financial results

Wedbush analyst Dan Ives described the results as a testament to the ongoing “AI Revolution,” projecting the company’s market cap to hit $4 trillion by 2025.

Emerging as a global tech leader, Nvidia captivated investors with its market growth and revolutionary advancements in AI and computing. 

However, as the chipmaker reaches record-breaking valuations, the spotlight on its environmental practices and sustainability commitments has intensified. The company faces increasing scrutiny over its efforts to address climate change and reduce its substantial energy footprint.

Behind the Chips: The Carbon Cost of AI

AI and chip manufacturing are energy-intensive processes that contribute to greenhouse gas emissions throughout the supply chain. From mining rare metals to the high-temperature ovens required during chip fabrication, the production of advanced semiconductors is resource-heavy.

According to researchers, information and communications technologies—including data centers—are responsible for 1.8% to 2.8% of global GHG emissions. This figure is projected to rise significantly as AI adoption accelerates. 

The International Energy Agency (IEA) estimates that the sector’s electricity consumption could double by 2026, potentially consuming 4% of global electricity—an amount comparable to Japan’s entire energy usage.

Nvidia’s Sustainability Initiatives

In response to these challenges, Nvidia has outlined a series of sustainability goals in its 2024 Corporate Responsibility Report. The company is committed to achieving 100% renewable electricity for all its offices and data centers by fiscal year 2025. This ambitious target reflects Nvidia’s dedication to reducing Scope 1 and Scope 2 emissions, which cover its direct operational carbon footprint.

Total FY2024 GHG emissions is 3,692,423 MTCO2e, with the following breakdown per source:

Nvidia GHG emissions 2024

For Scope 3 emissions, which comprise most of the company’s GHG footprint and include those generated by its supply chain, Nvidia is working with suppliers to adopt science-based emission reduction targets. By 2026, Nvidia aims to engage suppliers responsible for at least 67% of its Scope 3 Category 1 emissions, encouraging them to align with the company’s climate standards.

While Nvidia has made significant strides, its lack of a comprehensive net zero strategy has drawn criticism. The company’s report highlights its greenhouse gas emissions and energy use—73,017 metric tons of CO2 equivalent and 496,901 megawatt hours, respectively, in 2023—but provides limited detail on how it plans to reach net zero.

Innovations Powering Nvidia’s Green Goals

Nvidia’s innovations, such as the Blackwell GPUs and its Earth-2 platform, are pivotal in reducing the environmental impact of AI and computing. The Blackwell GPUs consume up to 20 times less energy than traditional CPUs for complex workloads, while the Earth-2 platform offers advanced climate modeling capabilities, using 3,000 times less energy than conventional systems.

Liquid cooling is another area where Nvidia is making strides. Direct-to-chip liquid cooling technology significantly enhances data center efficiency, reducing water consumption and energy demand. This system aligns with Nvidia’s broader strategy to improve the sustainability of its operations and products.

Additionally, Nvidia’s Omniverse platform enables businesses to create digital twins—virtual replicas of physical operations. This innovation helps industries optimize energy use, reduce waste, and cut carbon emissions. For example, Wistron, a manufacturing company, used Nvidia’s Omniverse to save 120,000 kilowatt-hours of electricity annually and reduce CO2 emissions by 60,000 kilograms.

Green AI: A Sustainable Path Forward

The rise of AI has brought immense opportunities but also increased energy demands. Deloitte’s report on AI’s environmental footprint predicts that global data center power demand could reach 1,000 terawatt-hours (TWh) by 2030 and potentially 2,000 TWh by 2050. 

Nevertheless, AI can significantly contribute to climate-neutral economies, as outlined in Deloitte’s study on Green AI. This concept focuses on minimizing AI’s environmental footprint by adopting renewable energy and optimizing hardware design.

Industry leaders have spearheaded Green AI efforts, particularly in accelerated computing. This approach relies on specialized hardware like GPUs, enabling faster, energy-efficient processing compared to CPUs, which handle tasks sequentially.Nvidia accelerated computingSource: “Powering artificial intelligence” report by Deloitte Global

Notably, Nvidia is among the tech companies exploring nuclear energy as a sustainable solution to meet the growing energy needs of AI and data centers. Nuclear power provides a reliable, compact, and low-carbon energy source that can sustain the rapid expansion of AI technologies while mitigating their environmental impact. 

The Path Ahead

The current COP29 discussions highlighted the need to power AI infrastructure with renewable energy and establish ethical guidelines for its use. By prioritizing environmental innovation, industries can leverage AI to foster a more sustainable and climate-conscious future.

Nvidia has demonstrated a commitment to energy-efficient innovations and renewable energy adoption, but a clear roadmap to net zero is highly significant. 

By integrating sustainability deeper into its business strategy, Nvidia has the potential to lead not only in technology but also in climate action, setting a benchmark for the industry and ensuring its long-term success.

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Duke University Achieves Carbon Neutrality: How Do Carbon Offsets Help?

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Duke University Achieves Carbon Neutrality: How Do Carbon Offsets Help?

Duke University achieved carbon neutrality in 2024, marking a significant milestone in its sustainability journey. However, achieving this status does not mean the university eliminated all its emissions. 

Instead, it represents a strategic balance between reducing emissions and offsetting those that remain. In Duke’s case, this included a $4 million investment in carbon offsets to neutralize its greenhouse gas (GHG) emissions. 

Duke’s Path to Carbon Neutrality: Balancing Reductions and Offsets 

Duke University, under the American College and University Presidents’ Climate Commitment, pledged to achieve carbon neutrality across its emissions-generating activities. Its Climate Action Plan (CAP) categorizes emissions into three scopes: 

Duke University GHG emissions sources

Duke’s approach aligns with GHG accounting standards from the World Resources Institute, ensuring comprehensive tracking and reduction strategies for all emission sources. The university has significantly cut GHG emissions through various levers including: 

  • Eliminating coal use, 
  • Boosting building and utility efficiency, and 
  • Reducing commuting emissions. 

Future reductions are planned through off-site solar investments and campus upgrades like steam-to-hot-water conversions and heat recovery chillers. Duke remains on track to achieve its 2030 emissions goals. 

However, 2023 emissions rose 9% compared to 2022, primarily due to air travel nearing pre-pandemic levels. Despite this, energy-related emissions are down 41% since 2007, and 2023 levels remain 21% lower than in 2019. 

Duke University carbon offsets for neutrality
To meet the 2024 goal, Duke redeemed 232,000 carbon offset credits to reduce emissions it has been unable to mitigate yet. The university developed a rigorous review process to ensure these credits meet its high-quality standards. Source: Duke University website

Duke’s progress toward carbon neutrality began in 2007 when it launched an institution-wide effort to measure and reduce emissions. By fiscal year 2022, Duke had reduced its emissions by 43%, with plans to reach a 45% reduction by its 2024 deadline. 

Duke University GHG emissions
Chart from Duke’s website
  • However, emissions rose slightly, requiring Duke to offset nearly 69% of its 2007-level emissions instead of the planned 55%.

This reliance on carbon offsets underscores a critical reality: achieving net-zero emissions without offsets is nearly impossible for large institutions. Matthew Arsenault, Duke’s assistant director of carbon and sustainability operations, highlighted that: 

“No institution, no company is going to be carbon neutral without using carbon offsets. There’s literally no way to reduce your emissions actually to zero.” 

Carbon offsets provide a mechanism to balance emissions from essential activities, such as powering campus buildings and transportation. These activities, while minimized through efficiency measures, can only be partially eradicated. 

How Carbon Offset Credits Work 

Carbon offsets allow institutions to balance emissions by funding projects that either reduce GHG emissions or remove existing emissions from the atmosphere. Institutions like Duke use these tools to purchase carbon accounting units traded on carbon markets. These markets enable organizations to buy and sell surplus credits to meet their sustainability and net zero goals. 

For Duke, offsets became a practical and ethical way to achieve carbon neutrality, given the current limitations of emission reduction technologies. 

Carbon Offsets in Action: The Key to Duke’s Carbon Neutrality

Duke’s approach to carbon offsets has evolved over the years. In 2009, the university launched the Duke Carbon Offsets Initiative (DCOI), the first university-based program of its kind. This initiative focused initially on developing new offset projects, such as a methane-capture effort at a North Carolina hog farm, where methane was converted into usable electricity instead of being released into the atmosphere. 

Other early projects included residential energy efficiency upgrades, urban tree plantings, and solar installations. These efforts were designed to both reduce GHG emissions and align with Duke’s broader sustainability values. 

As the 2024 carbon neutrality deadline approached, Duke University shifted its strategy to focus on larger, externally sourced projects to meet its offset needs.

Almost 80% of Duke’s carbon offset portfolio consisted of projects targeting ozone-depleting refrigerants, which contain potent GHGs that can leak into the atmosphere. These projects, developed in collaboration with international partners, represented a significant step in reducing emissions from refrigerants. 

The remaining offsets focused on methane capture from dairy farms and landfills, similar to Duke’s earlier hog farm project. By investing in these projects, Duke ensured its offsets addressed emissions effectively and sustainably. 

Ensuring Quality and Accountability 

Duke’s commitment to sustainability extends beyond simply purchasing offsets. The university employs a rigorous verification process to ensure the quality and ethical standards of its investments. This process involves collaboration with Ruby Canyon Environmental, a registered verifier on carbon markets, to vet prospective offset projects. 

To guide decision-making, Duke developed a comprehensive evaluation tool that includes detailed questions about each project. Criteria such as “additionality” (ensuring the emissions reductions would not occur without the project) and “permanence” (long-term commitment to emissions reductions) are prioritized. 

Projects that meet these standards are further reviewed by an advisory committee of faculty and students before purchase. Fewer than 10% of potential projects pass Duke’s initial evaluation, highlighting the university’s commitment to investing in high-impact and high-integrity carbon offsets. 

What’s Next? Duke’s Plan Beyond Neutrality

While offsets played a key role in Duke’s 2024 achievement, the university recognizes the importance of continuing to reduce its emissions. Efforts are ongoing to expand energy efficiency measures on campus and integrate more renewable energy sources into operations. 

Duke University’s carbon footprint will significantly decrease by mid-2025 when three off-campus solar facilities come online. They have a combined capacity of 101 megawatts. These projects will provide about 50% of the campus’s electricity and contribute renewable energy to North Carolina’s grid for decades. 

Additionally, Duke is exploring ways to include its health system and international campuses, such as Duke Kunshan University, in future emissions tracking. 

The university is now determining its “next-generation” climate goals, focusing on sustaining its carbon-neutral status and further reducing its offset dependency. This includes exploring innovative carbon offset projects, expanding renewable energy use, and encouraging campus-wide engagement in sustainability initiatives. 

Carbon offsets will remain an essential tool in the university’s strategy, but Duke aims to rely on them less as it continues to refine its emissions reduction efforts. With its comprehensive approach and commitment to quality, Duke serves as a model for other institutions seeking to balance sustainability goals with the practical realities of carbon offsetting.

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BlackRock Bets on Abu Dhabi for Strategic Growth. Is Crypto Part of the Plan?

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blackrock

BlackRock, the world’s largest asset manager has obtained a commercial license to conduct operations in Abu Dhabi with a motive to expand its regional presence. Abu Dhabi is a global hub for digital assets and has immense opportunities to attract business from other regions of the world.

Charles Hatami, head of the Middle East for BlackRock highlighted Abu Dhabi’s transformation into a global financial center and emphasized the following:

“Its strategic location, proactive government policies, and commitment to sustainable growth make it an ideal location for capital markets.”

BlackRock Anchors in Abu Dhabi’s Financial Hub

According to Bloomberg, BlackRock revealed it is now seeking regulatory approval to operate in the Abu Dhabi Global Market (ADGM) which is an international financial center for top financial and crypto firms.

Last year, ADGM launched its sustainable finance regulatory framework which strengthened its position to be the top hub for sustainable investments. It’s mandatory for the ADGM companies to meet their ESG disclosure requirements. These measures aim to boost sustainable finance in the region and support the UAE’s net-zero emissions goals.

Focus on the Private Market and AI               

The new office will allow BlackRock to work closely with Abu Dhabi’s sovereign wealth funds, wealth managers, and investment vehicles. The company also aims to leverage opportunities in AI infrastructure and sustainable investment solutions.

Abu Dhabi is competing with Riyadh and Dubai to bolster itself as the Middle East’s main business hub. Abu Dhabi and Riyadh have control over more than $1 trillion in sovereign wealth which could be some of the largest capital pools globally.

Growing Presence in the Middle East

The report also revealed that last month BlackRock received approval from Saudi Arabia to establish regional headquarters in Riyadh. This shows that the asset manager, overseeing $11.5 trillion, is actively growing its footprint in the kingdom.

Significantly, earlier this year, the company announced that it would receive up to $5 billion from the Public Investment Fund to invest in Middle Eastern ventures. Taping on these opportunities the company is building a Riyadh-based investments team to focus on regional opportunities.

Saudi Arabia has been encouraging international firms to enhance their local presence, and BlackRock has responded proactively. The company has partnered with Abu Dhabi’s Sheikh Tahnoon bin Zayed Al Nahyan to support major initiatives. These include funding data warehouse development and energy infrastructure projects which mark one of the largest collaborations in the region.

Betting on Strategic Opportunities

Under CEO Larry Fink’s leadership, BlackRock is betting on the competitive landscape of the Middle East. Media agencies reported that with dual operations in Abu Dhabi and Riyadh, the asset management firm can easily deepen relationships with influential sovereign wealth funds and private investment entities.

Furthermore, BlackRock will focus on advanced infrastructure projects and sustainable investment that will drive financial innovation across the Middle East. This is how BlackRock can strategically align itself to benefit from the region’s growing economic power.

Is BlackRock Expanding its Crypto Business in Abu Dhabi?

Well, BlackRock manages the iShares Bitcoin Trust ETF and has recently achieved a record $10.6 trillion in assets under management (AUM). The company recently reported an increase in both revenue and profits, thereby showcasing its robust financial structure. Its Bitcoin Trust ETF has given exposure to many investors in the U.S. to the world of crypto.

Now speculations are rife whether the company has plans to expand its crypto business in Abu Dhabi also?

Abu Dhabi’s Crypto-Friendly Ecosystem

The UAE has moved beyond oil, focusing on technology and finance as key drivers of economic growth. Subsequently, the government has built a strong and flexible regulatory framework after recognizing the potential of digital assets.

Over the past two years, Abu Dhabi and Dubai have attracted global businesses in digital assets. This shift has drawn in top talent, significant investment, and positive attention to the region.

Notably, the Abu Dhabi Global Market (ADGM) has been a pioneer in cryptocurrency and digital asset regulation. In 2018, its Financial Services Regulatory Authority introduced guidelines on crypto. These rules have been updated regularly since then and have now set transparent and high standards for regulation worldwide. This has reinforced Abu Dhabi’s position as a leader in digital finance.

BlackRock’s Zacks Rank & Price Performance

According to Zack Investment Research: Year to date, shares of BlackRock have gained 29.3% compared with the industry’s 37.5% growth.

BlackRock

BlackRock’s move to establish a presence in the region is a huge milestone for Abu Dhabi’s crypto and financial sectors. However, the company has not disclosed specific crypto-related plans for its UAE operations, nonetheless, it will continue to influence the digital finance infrastructure in Abu Dhabi.

Sources:

  1. UAE, Saudi Arabia: BlackRock Gets Abu Dhabi License Weeks After Nod for Saudi HQ – Bloomberg
  2. How The UAE Became A Crypto Hub Poised For Explosive Growth

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