India, UAE enhance green partnerships

In line with their climate change objectives and to sync with the global climate agenda, India and the United Arab Emirates (UAE) have been having a series of discussions and agreements with each other and with other countries to enhance mutual cooperation in environmental issues. Late last year, the two countries agreed to cooperate on a range of issues, including the supply of liquid natural gas (LNG), civil nuclear cooperation and development of food parks.

Bilateral trade and investments have grown over the last two decades — $85 billion in 2023, compared to about $7 billion in 2003. The UAE is now India’s third-largest trade partner after China and the United States. With an estimated investment of $18 billion in 2023, the UAE is also the seventh-largest investor in India. The Comprehensive Economic Partnership Agreement with India, the first such deal that the UAE signed in 2022, amid several since then, could lift bilateral trade to $115 billion before 2030.

Shifting away from traditional areas of engagement of oil, trade and expatriates, the two countries have emerged as leaders in global renewable energy efforts. Over the last decade, they have also found multiple channels to explore cooperation in green hydrogen, solar and wind energy, as well as grid connectivity involving undersea cables. Together with food processing projects, the two countries are now engaged in a new and strategic food security-for-energy security arrangement that opens doors for greater synergy in trade and investments.

India’s current renewable energy capacity is targeted to reach 500 GW by 2030. It is also targeting a non-fossil electricity generation capacity of 50% by the end of the decade. Partnering with the UAE, India launched the Green Credit Initiative during COP28, which is set to become a global collaboration. At COP28, the UAE announced it would develop 6.6 GW of clean energy capacity in India, including production of 10 MW of wind and solar energy. These projects are expected to be financed by the UAE’s $30 billion climate fund Alterra. India’s robust economic growth potential, its ambition to achieve net-zero emissions by 2070, and the estimated need for $10 trillion investment to achieve this target are expected to make green ventures financially sustainable and rewarding.

The Abu Dhabi National Oil Company (ADNOC) will supply more than one million metric tons per year of LNG for the next 15 years. In nuclear energy, the two countries signed an MoU to enhance cooperation in nuclear power plant development, energy procurement and exploration of mutual investment opportunities. Meanwhile, the ADQ Holding Company has committed to establishing an agricultural and food processing industrial complex using advanced technologies.

These initiatives coincide with the UAE’s announcement of the commercial plant of Unit 4 of the Barakah nuclear power plant. The UAE-India Civil Nuclear Energy Agreement is expected to bolster energy security by diversifying sources, reducing dependence on fossil fuels and promoting the use of clean energy. This will contribute to both countries meeting their climate goals. It is also expected to facilitate exchange of technology and expertise in the nuclear energy domain, thus boosting innovation and safety standards. The nuclear energy agreement adds on to a few other MoUs signed during UAE President Sheikh Mohammed Bin Zayed Al Nahyan’s visit to India earlier. Together, they are not only significant steps towards strengthening their thriving strategic bilateral partnership but also target carbon footprint reduction in the energy sector.

While coal will remain a major part of the energy mix for India, the UAE, via the Abu Dhabi Investment Authority, for example, has invested in some of the largest Indian renewable energy companies — ReNew and Greeenko Group. Such partnerships allow the UAE to diversify its export portfolio, reducing dependence on fossil fuels while capitalising on India’s vast market potential. They also promote the UAE’s strategy to “decarbonize the energy of today while investing in the energy of tomorrow.” The UAE has set a target to achieve net zero emissions by 2045 and ADNOC is investing as much as $5 billion annually in low-carbon energy, both initiatives better than its regional peers.

Beyond the bilateral, there are also other climate change mitigation bids intersecting with wider partnerships involving other countries.