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Weekly review of key events in Azerbaijan's green economy

Green Economy Materials 22 April 2024 14:59 (UTC +04:00)
Lada Yevgrashina
Lada Yevgrashina
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BAKU, Azerbaijan, April 22. The first press conference was held at the COP29 headquarters in Baku on April 15 in connection with the upcoming 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29) in Azerbaijan, Trend reports.

The event was addressed by COP29 President Mukhtar Babayev, COP29 Chief Negotiator Yalchin Rafiyev, COP29 Director General Elnur Soltanov, COP29 Operating Company Chairman and CEO Narmin Jarchalova, UN High-Level Leader on Climate Nigar Arpadarayi, and COP29 Youth Climate Advocate for Azerbaijan Leyla Hasanova. The COP29 logo was presented, and the venue (Baku Olympic Stadium) was announced.

Mukhtar Babayev, Minister of Ecology and Natural Resources, stated that hosting COP29 in the country demonstrates the international community's confidence in President Ilham Aliyev's national and international policy, as well as Azerbaijan's efforts to contribute to the solution of the climate change problem. According to him, the green transition is one of Azerbaijan's national priorities. In particular, the government has joined the Global Methane Commitment Program, which envisions states adopting voluntary methane emission reduction measures, and has set a goal of increasing the share of renewable energy sources in installed power capacity to 30 percent by 2030.

Babayev believes that Azerbaijan will set an example for other oil and gas countries since COP29 opens up new opportunities for Azerbaijan's green growth programs.

He stated that financing steps to reduce carbon dioxide and methane emissions is one of the top priorities for both COP29 and Azerbaijan's individual state programs.

Babayev noted that Azerbaijan is already seeing the effects of climate change.

"Reduced water availability in rivers has had a serious impact on the decline of water levels in the Caspian Sea. Discussing such issues will create new opportunities. The mentioned issues will be discussed within COP29," Babayev added.

He also noted in an interview with the Associated Press that COP29 is crucial in planning aid to poorer countries.

The International Monetary Fund (IMF) is committed to working to ensure the success of COP29 in Azerbaijan, as Kristalina Georgieva, IMF Managing Director, said on her social network X page that she met with Azerbaijani Finance Minister Samir Sharifov, Central Bank Chairman Taleh Kazimov, and COP29 President Mukhtar Babayev in Washington.

At a Fiscal Monitor briefing during the IMF's spring meetings in Washington, DC, IMF Director of Fiscal Affairs Department Vitor Gaspar stated that addressing climate change will necessitate a comprehensive set of national and regional measures.

Another IMF delegate, Era Dabla-Norris, stated that carbon dioxide pricing should be an intrinsic part of any strategy since it allows governments to raise the funds required for green initiatives. However, this should be supplemented by a variety of other regulatory and incentive measures to encourage businesses and families to decarbonize.

Simon Stiell, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), stated during the IMF and World Bank Spring Meetings in Washington, DC (April 15-20), that climate finance drives climate change action. He stated that this year's WB and IMF spring meetings in Washington are a key step toward establishing credible and ambitious financial targets at the next COP29 in Baku.

COP29 Director General Elnur Soltanov stated that COP29 will be a broad platform of action to speed the transition to green energy and expressed optimism that new chances will emerge in terms of fulfilling Azerbaijan's commitments in this regard. According to him, the energy sector accounts for 70% of total greenhouse gas emissions. However, Azerbaijan is attempting to convert inefficient energy facilities into efficient ones.

The UN High-Level Leader for Climate at COP29, Nigar Arpadarai, emphasized that the participation of private sector representatives in COP29 is important, as climate finance is key at COP29. According to her, the role of non-governmental organizations and civil society is also important.

COP29 Chief Negotiator Yalcin Rafiyev explained last week that Azerbaijan, within the mandate of COP29, approaches the negotiation process with all participating parties through the prism of transparency, inclusiveness, and neutrality. According to him, the key topics of the COP29 negotiations, including climate finance, are comprehensively discussed with all parties, and work on possible solutions for the successful outcome of the negotiations is being actively carried out.

Last week, it also became known about the prepared amendment to the Tax Code. According to it, the income of non-resident individuals involved in the supply of goods, works, and services in connection with the 29th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) in the Republic of Azerbaijan will be exempt from income tax for 9 months, starting on March 1, 2024.

Azerbaijan and the World Bank (WB) discussed cooperation within COP29. CBA Chairman Taleh Kazimov wrote about it on X.

"It was a pleasure to meet with World Bank CEO Axel van Trotsenburg and the WB team. There was a useful exchange of ideas on the Bank's current activities in our country, on the Country Partnership Framework for the next period [2025–2028], as well as cooperation opportunities related to COP29," the publication said.

Also in the past week, the upcoming participation of the Afghan delegation at COP29 became known.

Representatives of the COP29 Chairmanship discussed the process of preparation for COP29 with the delegation of the Permanent Mission of Finland to the OSCE.

Azerbaijani Energy Minister Parviz Shahbazov said at the International Renewable Energy Agency (IRENA) events in Abu Dhabi on April 16–18 that the most pressing topics related to the global climate agenda, including the issue of financing climate change mitigation measures and the development of projects on "green" hydrogen, will be put forward during COP29. The Minister emphasized that Azerbaijan is ready to be a driving force of global solidarity in the fight against climate change at COP29.

At a meeting in Abu Dhabi with Director of the European Energy Group of the European Bank for Reconstruction and Development (EBRD) Grzegorz Zieliński, the head of the Azerbaijani Ministry of Energy discussed projects in which the EBRD may participate, as well as interaction on COP29.

To note, the European Bank for Reconstruction and Development (EBRD) presented initial research in 2023 that showed that Azerbaijan could produce "green" hydrogen that would be competitive in Europe.

But so far, the Azerbaijani Ministry of Energy acknowledges that the country is at the stage of taking preliminary steps to create a hydrogen strategy.

At the same time, the head of the Ministry of Energy of Azerbaijan notes that Azerbaijan considers the development of the hydrogen industry as an important part of the transition to affordable, safe, and clean energy.

Also in Abu Dhabi, Shahbazov met with UAE Minister of Industry and Advanced Technologies and COP28 President Sultan Ahmed Al Jaber to discuss COP28 agenda issues and their continuation in Azerbaijan at COP29, particularly with the assistance of the UAE.

Besides, in Abu Dhabi, the head of Azerbaijan's Ministry of Energy shared information on the country's ongoing as well as future green projects. According to him, green zones have been allocated in the territories of Azerbaijan liberated from occupation, where hydrogen production will be established, and this aspect is one of the cornerstones of cooperation with Europe. The potential of offshore wind energy in the Caspian Sea is 157 GW, and it can be used for the production of environmentally friendly hydrogen with its further supply to the European market.

Shahbazov also stated that by the end of 2024, a feasibility study of the Black Sea Energy project (green energy corridor "Caspian-Black Sea-Europe") for the supply of "green" electricity to Europe will be ready. The supplies themselves may start in 5–6 years.

He also pointed to another project "under realization"—the p project of a "green" corridor across the Caspian Sea from Kazakhstan and Uzbekistan.

From Abu Dhabi, Shahbazov traveled to New York. During a meeting with UN General Assembly Chairman Dennis Francis on April 20 in New York, the Azerbaijani Energy Minister discussed cooperation within COP29. The press release of the Ministry of Energy quotes Dennis Francis as saying that the energy transition contributes to progress in achieving many Sustainable Development Goals (SDGs), and Azerbaijan's rich experience in holding large-scale events will contribute to the success of COP29 as well as the fulfillment of green energy goals.

During a meeting in New York with Deputy Executive Director of the International Energy Agency (IEA) Mary Burce Warlick, Parviz Shahbazov discussed the draft "Energy Efficiency Roadmap for Azerbaijan" prepared by this agency within the framework of the "EU4Energy" program, as well as opportunities for cooperation on COP29.

During one of his speeches last week, Shahbazov noted that finance is one of the important conditions for tripling the use of renewable energy by 2030 globally. In his opinion, investments should be directed to the creation of production capacities, integration into the energy system, increase and modernization of power grid capacities, and construction of interconnectors and energy storage systems. The Minister assessed Azerbaijan's accession to the Global Renewable Energy and Energy Efficiency Pledge as proof of commitment to the transition to green energy.

Referring to plans to increase renewable energy capacity in Azerbaijan, Shahbazov said last week that the country has two phases of plans for green energy on land and sea: until 2027 and until 2030. By 2027, Azerbaijan's RES potential will double and then more than quadruple by 2030. Azerbaijan will have more than 8 GW of green energy by 2030 for domestic needs, decarbonization of the economy, and exports.

Meanwhile, in Baku, the American Chamber of Commerce in Azerbaijan (AmCham) held its second event within the framework of the "Stakeholder Dialogue on Climate Change" launched this year. AmCham has scheduled six Baku Dialogue events this year as part of its assistance to Azerbaijan in the run-up to COP29.

At the end of the week, on April 20, SOCAR Vice President Afgan Isayev, together with representatives of the Oil and Gas Climate Initiative (logic) and the United Nations Environment Programme (UNEP), visited Oil Rocks and discussed the phased implementation of the Leak Detection and Repair (LDAR) project being implemented at Oil Rocks. A trip to Sangachal Terminal, operated by BP, was also organized to discuss the issues of emission reduction during oil and gas operations at the terminal and new technologies used for methane measurement.

To note, SOCAR and bp are jointly implementing the Advancing Global Methane Reduction (AGMR) initiative under the Methane Guiding Principles as leading industry leaders in Azerbaijan.

Additionally, last week it became known that Italian companies are using modern "green" technologies with low environmental impact for the reconstruction of Karabakh. Andrea Maccanico, director of the Italian Trade Agency in Baku, told reporters about it.

Trend referring to a source in the Ministry of Industry and Trade of the Czech Republic reported that the Czech Republic and Azerbaijan may cooperate in the construction of small hydroelectric power plants.

Additionally, Trend exclusively learned about the preparation of the first open auction in Azerbaijan for the construction of a solar power plant with a capacity of 100 MW.

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