For SMEs operating within European value chains, CO₂ reporting has evolved from a voluntary transparency exercise into a critical operational requirement. While the direct legal mandates of the Corporate Sustainability Reporting Directive (CSRD) primarily target larger entities, the administrative burden has shifted downstream.

The Middle East and North Africa are no longer on the sidelines of the energy transition. The MENA Energy Outlook 2026 by Dii Desert Energy shows the region has reached a turning point. Renewable capacity jumped 44% in 2025 to about 43.7 GW. Solar PV led the surge, accounting for 34.5 GW.

The growth is unprecedented. MENA took five years to rise from about 14 GW in 2020 to 30 GW in 2024. Then, in just one year, it added nearly 15 GW. This was not gradual progress. It was a rapid scale-up driven by cheap solar power, competitive auctions, and a booming project pipeline.

Falling costs are at the core of this shift. In 2025, solar and wind tenders set new global records. Solar PV prices dropped to around 1.09 US cents per kWh. Wind fell to about 1.33 US cents per kWh. These prices are reshaping expectations for large-scale clean energy worldwide.

Policy, Pipeline, and Project Momentum Poised for Scale

The region’s renewable energy project pipeline has ballooned to ~202 GW — a figure that now nearly matches aggregated national targets out to 2030. That pipeline isn’t theoretical; it includes 38 GW under construction and a deep roster of gigawatt-scale solar programs ready to move into execution.

Under Dii’s updated scenario framework for 2030, three pathways emerge:

• A Conservative baseline: 165 GW total renewables.
• A Balanced transition: 235 GW, roughly aligned with national ambitions.
• A Green Revolution: 290 GW, representing full regional potential.

Even the conservative outlook reflects a dramatic acceleration — the result of policy clarity, cost competitiveness, and private capital intent on capturing the region’s unparalleled solar resource.

Saudi & UAE Leading Deployment

Saudi Arabia has emerged as a standout. Operational capacity nearly tripled in one year, reaching around 11.7 GW, and it now stands as a regional leader not only in volume but in setting cost benchmarks.

Meanwhile, the UAE continues to punch above its weight with flagship projects. Masdar and Emirates Water and Electricity Company (EWEC) have begun the construction of a 5.2 GW solar park integrated with 19 GWh of battery storage – one of the largest renewable + storage complexes globally. This project is intended to deliver baseload clean power at scale, significantly reducing reliance on gas-fired generation.

• READ MORE: MENA’s Renewable Energy Boom: Solar Capacity to Hit 180 GW by 2030 

Solar: The Uncontested Leader

Solar is the centerpiece of the MENA transition — and for good reason.

• Market share: Solar PV dominates the region’s current renewable fleet, making up roughly 79% of deployed renewables with 34.5 GW.
• Pipeline strength: Of the total 202 GW pipeline, solar accounts for the majority — around 130 GW — leaving wind and storage to complement its growth.
• Economics: First-of-their-kind auction prices have pushed levelized costs to historic lows, intensifying private-sector interest and reducing capital-cost risk for long-duration financing.

This solar dominance aligns with broader global forecasts that see solar accounting for most of renewable growth in the decade ahead, especially as project cost declines continue to outpace projections.

The critical driver here is not just sunshine but economics: solar power in MENA is now among the cheapest baseload energy available, challenging even entrenched natural gas generation in many markets.

From Panels to AI: MENA’s New Demand Drivers

One of the most interesting insights in the Outlook is the emergence of AI infrastructure as a renewable energy demand driver.

The report highlights that data centers — spurred by the rapid adoption of AI — are becoming “super offtakers” of clean energy. These facilities require long-term, high-capacity power contracts, which in turn improve the bankability of large renewable power purchase agreements (PPAs).

This is a structural shift. Traditionally, renewable PPAs in the corporate sector were dominated by manufacturing and export industries. Now, the AI ecosystem’s appetite for reliable, low-carbon power is helping unlock financing and long-duration contract structures that support gigawatt-scale solar and storage.

In effect, AI is not just a user of clean power — it’s becoming a market catalyst, compressing risk premia and enabling developers to sell projects at scale with predictable cash flows. This is exactly the type of demand signal that carbon markets and corporate net-zero strategists value most: stable, creditworthy offtake linked to decarbonization commitments.

Energy Storage: The Key to 24/7 Clean Power

Solar’s growth creates a natural need for storage solutions, and MENA is responding. Battery Energy Storage Systems (BESS) are rising fast — with about 25 GWh operational today and projections showing ~156 GWh by 2030 (a more than six-fold increase).

This shift is pivotal: storage enables firm, dispatchable renewables, bridging gaps between peak solar output and evening demand. It also reduces grid stress and curtails reliance on fossil peaking units — which, in carbon accounting terms, lowers actual emissions and improves marginal grid intensity.

The shift toward BESS over thermal energy storage reflects global trends in cheaper lithium-ion systems and increased merchant storage markets, signaling that long-duration storage will be a defining piece of the region’s decarbonization story.

• READ: Sungrow Powers ENGIE’s €290M Vilvoorde Battery Park, Europe’s Largest of Its Kind 

Carbon, Climate, and Forecasts

MENA’s transition — led by solar — has direct implications for carbon reduction pathways:

• The region’s power sector emissions are highly carbon-intensive today. Replacing fossil generation with low-carbon solar and storage can materially reduce grid emissions intensity.
• Large-scale deployment and low costs improve the economics of displacement, especially for gas. That in turn strengthens the case for deeper cuts aligned with Paris Agreement goals.

However, challenges remain. Natural gas still dominates power generation in many countries and will likely remain part of the mix through 2030. That underscores the importance of carbon pricing, power market reform, and long-term PPAs to accelerate coal-to-solar displacement and enable hydrogen sectors to scale.

MENA: Forecast to 2030 and Beyond

• Balanced transition (235 GW): Renewable power capacity grows significantly, narrowing the gap to climate targets and improving energy security.
• Green Revolution (290 GW): If finance, supply chains, and permitting keep pace, MENA could exceed current national goals and unlock deeper emissions reductions.

Global modeling from other sources also suggests that solar and wind could respectively represent the majority of electricity growth in the next decade — a pattern that amplifies the MENA trajectory.

MENA has shifted from potential to performance, driven by low-cost solar, strong project pipelines, and rapid growth in energy storage. New demand from AI is adding fresh momentum.

This progress creates fertile ground for carbon markets. Large, contract-backed renewable projects offer credible, long-term emissions reductions. As power markets mature, MENA is emerging as a key player in energy security and global decarbonization.

• READ MORE: BYD and Saudi Arabia Tandem for World’s Largest Battery Energy Storage Project

The post MENA Energy Outlook 2026: Solar, Storage and AI Reshape Power Demand appeared first on Carbon Credits.

Mitsui O.S.K. Lines, also known as MOL, one of Japan’s biggest shipping companies, announced its first carbon removal results under its long-term environmental plan. This move marks a real step beyond reducing emissions. MOL aims to reach net-zero greenhouse gas (GHG) emissions by 2050 under its Environmental Vision 2.2.

Shipping emissions are hard to cut, so removal methods help tackle the remaining CO₂. MOL’s actions also reflect the global growth of the carbon removal market. Companies and countries are investing more in solutions that take CO₂ out of the air for long-term storage. This trend is rising as climate targets push industries to go beyond emission cuts.

DAC, Ocean Capture & Rocks: A Trio of MOL’s First Carbon Removal 

In fiscal 2024, MOL announced its first verified carbon removal achievements. This progress builds on its Environmental Vision 2.2 strategy. The shipping giant secured measurable removal commitments using several technologies.

In its LinkedIn post, the company notes:

“In FY2024, MOL reported credits equivalent to 2,000 tons of CO₂ emissions- marking the company’s first tangible achievement in CDR… As MOL continues to diversify its CDR portfolio, it remains committed to finding and scaling the most effective solutions- both natural and technological- to advance toward a decarbonized future.”

MOL partnered with Climeworks, a leading Direct Air Capture (DAC) company. Through this partnership, the company agreed to procure 13,400 tonnes of CO₂ removal by 2030 using Climeworks’ DAC systems.

• MOL is the first shipping company globally to set up this type of DAC purchase. DAC pulls CO₂ directly from the air and stores it permanently.

MOL also signed an offtake agreement for 30,000 tonnes of carbon removal credits from Captura’s Direct Ocean Capture technology. This method removes CO₂ from seawater, which draws CO₂ from the air over time.

In addition, MOL made a deal with Alt Carbon for 10,000 tonnes of carbon removal credits. These credits come from enhanced rock weathering in India. Enhanced weathering helps pull CO₂ from the air into minerals in soil, a type of removal considered higher quality and more durable. This deal is the first of its kind between a Japanese shipping company and an Indian climate tech firm.

MOL is also buying enhanced rock weathering removal credits through another multiyear offtake. This brings added diversity to its removal portfolio. These deals help the company support different removal paths rather than relying on a single method.

• SEE MORE: MOL Becomes the First Japanese Shipping Firm to Retire Tech-Based CDR Credits Through NextGen

Why Shipping Needs Removals

The global shipping industry carries about 90% of traded goods by volume. It also produces roughly 3% of global CO₂ emissions. If trade grows, emissions could rise unless action is taken.

The International Maritime Organization (IMO) aims for shipping emissions to drop. The targets are: 20-30% reduction by 2030, 70-80% by 2040, and net-zero by 2050, all compared to 2008 levels.

Even with cleaner fuels like ammonia or hydrogen, some emissions will remain hard to avoid. Energy efficiency and fuel switches help, but they cannot remove all CO₂ from long ocean voyages. Carbon removal fills this gap. It helps shipping companies offset their leftover emissions while future fuel solutions scale up.

• RELATED: Shipping Toward Net Zero: Maritime Turns to Green Hydrogen and Ammonia

MOL’s Environmental Vision 2.2 plan aims to remove 2.2 million tonnes of CO₂ by 2030. This goal covers all its removal initiatives. This creates demand for early‑stage removal solutions and helps scale emerging technologies.

Partnerships on the Horizon: Forests, Carbon Credits, and Cross-Industry Moves

MOL’s carbon removal work includes broader moves with partners and industry players. The company is supporting carbon credits to cut emissions and expand negative emissions. All credits are third-party certified and independently verified to ensure quality and impact.

In January 2025, MOL and Marubeni Corporation started Marubeni MOL Forests Co. This joint venture will create, trade, and retire nature‑based carbon credits. Its first project aims to plant around 10,000 hectares of new forest in India. This will generate credits from afforestation and reforestation. These forests will start producing removals around 2028. Nature‑based solutions help store carbon while boosting biodiversity and soil quality.

Also, MOL signed a deal with ITOCHU Corporation. This agreement aims to promote environmental attribute certificates. These certificates help cut Scope 3 emissions in transportation. This work is the first Japanese model linking shipping and aviation in environmental certificate use. Scope 3 emissions come from supply chains and end‑use.

Another related program is the NX‑GREEN Ocean Program by Nippon Express, launched in February 2025. It uses carbon inset certificates tied to low‑carbon shipping by MOL vessels. These certificates help companies reduce their Scope 3 freight emissions. The program shows how removal and decarbonization can work together for supply chains.

Together, these partnerships show MOL’s expanding role. The company is connecting technical and natural removal solutions with marine decarbonization and cross‑industry climate efforts.

Riding the Carbon Market Wave

The global carbon removal market is growing fast. Corporations and governments are investing more in long-lasting removal methods. These include DAC, ocean capture, enhanced weathering, and nature-based solutions. This growth matches scientific calls for big removals to keep warming under 1.5°C.

MOL is helping to expand the removal market by investing in multiple technologies. A joint venture for a NextGen CDR Facility, including MOL and other buyers, aims for over 1 million tonnes of certified removals by 2025. These projects include DAC and biomass removal with long-term storage. Early demand helps drive down costs over time and encourages more technological development.

Shipping companies are also investing in emission reduction technologies. These include more efficient ship designs, alternative fuels, and onboard carbon capture systems.

Global shipping firms continue to align with the IMO’s decarbonization goals through technology upgrades, fuel changes, and climate partnerships. This includes work on hull design, logistics efficiency, and fuel alternatives such as ammonia and hydrogen. Those efforts reduce emissions intensity and support long-term climate targets.

Challenges Ahead: Cost, Permanence, and MRV

Despite progress, carbon removal faces challenges.

• High Costs and Early Stage Technology: Direct Air Capture and ocean capture remain expensive and are still early in deployment, making them less appealing than traditional emission reductions.
• Need for Strong MRV and Certification: Measurement, Reporting, and Verification systems must stay robust to ensure credits reflect real and lasting CO₂ removal. Independent certification is critical for market trust.
• Nature-Based Risks: Forest and land projects require careful planning. Carbon storage can be reversed if forests burn, degrade, or are mismanaged. High-quality MRV standards help protect long-term carbon value.

Sailing Toward 2050: MOL’s Vision for Net-Zero Maritime

Despite challenges, experts say removals will be necessary for sectors that cannot eliminate emissions by 2050. Shipping, aviation, and heavy industry will likely cut emissions and use durable removals to meet climate goals.

For MOL, investing in removal markets, partnerships, and strong MRV frameworks positions the company as a leader in maritime decarbonization. The first results under Environmental Vision 2.2 show how shipping firms can add new climate solutions to their sustainability plans.

By partnering with DAC, ocean capture, and enhanced weathering technologies, and by investing in nature-based solutions, MOL is expanding its climate action beyond traditional emission cuts.

As shipping and corporate climate planning evolve, carbon removal will remain a key part of long-term strategies. MOL’s progress with Environmental Vision 2.2 shows how companies can blend technology, nature, and market forces to achieve bold climate goals.

• READ MORE: Maritime Decarbonization: Japanese Shipping Giant NYK Partners with 1PointFive for DAC Credits

The post Japan’s Mitsui O.S.K. Lines, MOL, Unveils First Carbon Removal Results Sailing Toward Net Zero appeared first on Carbon Credits.