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UAE and Germany grow ever closer with shared net zero goals

UAE German leaders WAM
UAE president Sheikh Mohamed bin Zayed and German chancellor Olaf Scholz witness the signing of the Energy Security and Industry Accelerator (ESIA)
  • Countries accelerate joint projects in energy security
  • Masdar and RWE Renewables explore offshore wind projects
  • Etihad Rail and Deutsche Bahn partner for UAE National Rail Network

The first four Mercedes Benz cars arrived in Abu Dhabi in 1965, imported by the Al Fahims, who founded Emirates Motor Company three years earlier. Last year, the UAE imported German automobiles worth nearly $1.2 billion.

Also in the mid Sixties, the German company Siebert discovered enough water close to Al Ain to enable the construction of the first water pipeline from Al Ain to Abu Dhabi. 

Fast forward to 2022 and trade between the UAE and Germany is entering a new era as the countries move increasingly closer on climate action.

The UAE president, Sheikh Mohamed bin Zayed, and the German chancellor, Olaf Scholz, witnessed the signing of the Energy Security and Industry Accelerator (ESIA) on Sunday, aimed at boosting projects of joint interest in energy security and decarbonisation.

It also signalled a new era for the countries away from “old fashioned trade” which helped drive non-oil bilateral exchanges to $9.5bn during 2021.

“The UAE has always been a strategic trade partner for Germany,” Raghu Mandagolathur, CEO of Marmore Mena Intelligence, told AGBI.

“Signing the new pact has further intensified the trade relations and remains pivotal in both nations’ march towards net zero emissions. 

“The nations’ deliberation over renewable energy production indicates a harnessing of partnerships between the countries across the alternative energy value chain.

“The UAE is expected to be one of the most reliable exporters of hydrogen in the world, offering a great edge over other countries in generating export revenue.”

Abu Dhabi Future Energy Company, better known as Masdar, and Germany’s RWE Renewables, also inked a memorandum of understanding (MoU) to explore collaboration on developing offshore wind projects in a range of key markets.

Masdar is increasingly targeting this market as it aims to reach 100 gigawatt (gw) total capacity by 2030.

UAE Germany wide energy venture
Masdar and RWE Renewables collaborate on offshore wind projects

“By leveraging our two companies’ extensive expertise in this sector, we can help other nations to meet their offshore wind targets, transition to clean energy sources, and meet their net zero objectives,” Mohamed Jameel Al Ramahi, CEO of Masdar, said.

Markus Krebber, CEO of RWE, added: “The acceleration of the energy transition remains key to tackling both the current energy crisis and the climate crisis.

“I am pleased we will join forces with Masdar, a known and reliable partner to RWE for years.

“Together we will explore the potential for widening the scope of our partnership in offshore wind to further projects.”

As part of the ESIA, Masdar will explore offshore wind opportunities in Germany’s North and Upper Baltic Sea, with sights set on up to 10gw renewable energy production capacity by 2030.

Abu Dhabi National Oil Company (ADNOC) also entered into a liquefied natural gas (LNG) supply agreement with RWE, with ADNOC providing an LNG cargo for delivery in late 2022, to be used in the commissioning of Germany’s floating LNG import terminal at Brunsbüttel.

ADNOC has also reserved a number of further LNG cargos exclusively for German customers in 2023 as the European powerhouse looks to pivot away from its reliance on energy from Russia.

“We look forward to closely collaborating on offshore wind, other renewables and hydrogen in the UAE and in Germany,” Robert Habeck, vice chancellor and federal minister for economic affairs and climate action, said.

In June the UAE’s ministry of energy and infrastructure also signed a deal with Audi and Siemens to cooperate on boosting electric vehicle charging capacity on federal roads, and increasing adoption of EVs across the country including the deployment of 10 Siemens ultra-fast chargers on the highways in Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah. 

Mercedes Benz electric vehicle
Mercedes-Benz electric cars are coming on stream to meet demand for sustainable trade

But clean energy is just part of a burgeoning trade relationship between the UAE and Germany which currently sees more than 1,000 German companies operating in the emirates.

Non-oil trade rose by more than 10 percent in 2021, with cars ranked first on the list of the most important goods imported from Germany, followed by aircraft, medicines, automotive parts and antiserum products.

The top five commodities exported to Germany included insulated wires and cables, cigarettes, electricity savers, jewellery and raw aluminium.

The trade exchange exceeded $130bn over the past decade, with goods weighing more than 14 million tonnes, according to data from the Federal Competitiveness and Statistics Centre. Imports to the UAE accounted for 89.5 percent of the total.

Transport is also a key sector as Etihad Rail announced on Monday it had concluded the knowledge transfer programme with Berlin-based Deutsche Bahn, Europe’s largest railway operator and infrastructure owner. 

The partnership, which has operated as joint venture Etihad Rail DB since 2013, has been responsible for Stage One of the UAE National Rail Network.

This has transported over 44 million tonnes of sulphur across 4,400 trains and cut more than 370,000 tonnes of CO2 emissions and 2.68 million truck trips, supporting the UAE’s Net Zero 2050 Strategic Initiative.

Etihad Rail
Etihad Rail and Deutsche Bahn partnered for the UAE National Rail Network

Tourism is also growing according to the German National Tourist Board, which revealed the country recorded a 318 percent increase to 335,000 overnight stays from Gulf nationals in the first six months of 2022 compared to the same period last year.

Ernst Peter Fischer, the then German ambassador to the UAE, said in June that while traditionally enjoying a relationship based on “old-fashioned trade”, both countries also “need to invest in technologies and businesses of the new economy”.

ADNOC is leading this after its first shipment of low carbon ammonia left the UAE bound for Hamburg, Germany last month.

The cargo was the first of several test cargoes sold to customers in Germany as ADNOC expands its strategic energy partnership across the hydrogen value chain. 

Fischer said that to achieve its climate neutral target by 2045, Germany will have to import several hundred terawatt hours’ worth of hydrogen and its derivatives.

“The UAE has the capacity to produce those green fuels because you have abundant solar energy and you have the know-how from your history on production of fuels,” he said.

German and Emirati companies are already working together on several hydrogen projects in the UAE.

The first green electrolyser pilot project in the Middle East and North Africa (MENA) region was inaugurated in May 2021 in Dubai jointly by Siemens Energy and the Dubai Electricity & Water Authority (DEWA).

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