Energy Transition Digest: 8-21 July 2024

This newsletter will take you ~3 minutes to read.

1. Saudi Arabia Advances Renewables Localization

Public Investment Fund (PIF) signed three agreements to localize the manufacturing of renewable energy equipment and components.

So what? Saudi Arabia is transforming its electricity sector by pushing for two ambitious targets: achieving 30% of electricity from renewables by 2030 and increasing the local content percentage. The new agreements will help establish a manufacturing base in the kingdom through joint ventures with foreign investors to support these targets.

Details:

• JV with Envision Energy (holding 50%) and Vision Industries | ???? ??????? (10%)will manufacture wind turbines and components with a total capacity of up to 4 GW.
• JV with Jinko Solar Co., Ltd. (40%) and Vision Industries | ???? ??????? (20%) will produce up to 10 GW per year of photovoltaic cells and modules.
• JV with TCL ZHONGHUAN (40%) and Vision Industries | ???? ??????? (20%) will localize the manufacturing of ingots and wafers for solar power with 20 GW annual capacity.

2. 1.5-degree Threshold Crossed in the Previous 12 Months

June 2024 was the twelfth month in a row when the average global temperature was more than 1.5°C higher than the pre-industrial level.

So what? Bad news. Although this chain of extremes doesn't mean we have failed to deliver on the 1.5°C target yet (this target is measured over longer periods), it shows a sustained shift in climate. We must adapt to the new patterns while pushing for mitigation actions.

Details:

• June 2024 was the warmest June on record in the ERA5 database maintained by Copernicus ECMWF Climate Change Service.
• The global average temperature for the past 12 months was 1.64°C above the 1850-1900 pre-industrial average.

3. European Commission President Re-elected

Ursula von der Leyen was re-elected as the President of the European Commission for another 5-year term as a result of the vote in the European Parliament .

So what? As far as climate policy is concerned, it means sticking to commitments of the European Green Deal and continuing the energy transition.

Details:

• To get re-elected, Ursula von der Leyen secured support from several groups in the European Parliament: the European People's Party, the Socialists, Renew Europe, and the Greens.
• In her candidacy speech, she promised to adhere to the targets of the European Green Deal and implement the policies that have already been approved.
• She will now assemble the new cabinet of commissioners, for which she has asked each EU member state to submit two candidates, a man and a woman, aiming for gender balance.

4. SHEIN Launches Venture Capital Arm

SHEIN announced the launch of the Circularity Fund and broader ESG efforts with a total investment commitment of €250M over five years.

So what? The initiative seems to be driven by visibility rather than actual impact. The total 5-year commitment is less than 15% of SHEIN's annual net profit, and the company's ultra-fast fashion business model is not really aligned with the concept of circularity.

Details:

• SHEIN is the largest fashion retailer in the world, accounting for just under 20% of the global market and having $23bn in sales in 2022.
• Last year, the company filed for IPO in the US and is now waiting for approvals from both US and Chinese regulators. It was valued at $60bn in the latest funding round.
• The newly launched Circularity Fund will invest in startups in the EU and the UK working on textile-to-textile recycling innovations.

Other Notable News Headlines

• EU nuclear energy plans face funding uncertainty.
• 百事 and Yara International will support farmers with decarbonization.
• The UK launches GB Energy to invest in clean energy and mobilize private funds.