Many Opportunities Identified for Reducing GHG Emissions in Industrial Sectors in Egypt

Egypt image 1Egypt became a party to the United Nations Framework Convention on Climate Change (UNFCCC) in 1994. An assessment of greenhouse gas (GHG) emissions for Egypt for 2000 revealed  increase of 5.1%, annually since 1990. The energy sector, including transport, is the primary contributor to GHG emissions in the country.

Egypt has framed its vision of its energy future in its National Energy Policy, which promotes enhanced use of natural gas, an energy price adjustment, and the removal of subsidies, as well as energy conservation and more efficient energy use. Goals are to supply 20% of the nation's electricity through renewable energy by 2020 and to reduce future energy consumption by 10% by enhancing conservation and efficiency.

In support of these ambitious goals, Egypt's Low-Carbon Economy Strategy aims to redirect the country's economy towards investments in clean technology.

In this context, the industrial sector is an increasingly important sector with respect to climate change mitigation. Based on current trends, it is estimated that by 2030, GHG emissions in important national industries such as cement, fertiliser, and iron and steel will increase substantially unless action is taken. However, research undertaken through the Low Emission Capacity Building (LECB) project in Egypt shows that these same sectors have the most potential for producing significant reductions in GHG emissions.

In Egypt, the project is implemented by the Egyptian Environmental Affairs Agency, in collaboration with several other key ministries. As a result of a nationally-driven process, the LECB project in Egypt is develop Nationally Appropriate Mitigation Actions (NAMAs) in the energy and transport sectors; elaborate a Low Emission Development Strategy; and to work with industry on mitigation action plans. This requires collaboration among policy makers and industry leaders in order to understand the potential of Egypt's industries for enhancing profitability while improving energy efficiency.

Egypt image 2As part of the decision-making process, the LECB project supported an analysis in 2012 of three of Egypt's most important industrial sectors: cement, fertiliser, and iron and steel. This study not only provided information on areas in which NAMAs might be developed, but also established criteria for evaluating the viability of potential NAMAs and focusing joint efforts in order to achieve the most significant economic impacts. The analysis concluded that the cement sector should be given the highest priority for implementing NAMAs in Egypt, followed by fertiliser and iron/steel. The work also opened up important dialogue on the business case for energy efficiency, since the industries have seen increases in energy prices since the beginning of 2012.

Next Steps

One of the main objectives of the analysis was to identify target sectors for industrial mitigation actions in a systematic manner. Using criteria such as total GHG contribution, readiness of the industrial sector to cooperate, and future growth possibilities, the cement sector was identified as having the greatest potential for reducing emissions and energy consumption. In addition, its high level of profitability, liquidity and low debt ratio make the sector strong enough to implement mitigation actions without seriously affecting the competitiveness of companies involved. Recommendations for more in-depth studies include:
  • a comprehensive survey of all of Egypt's cement plants to collect data on capacities, technology used, production rates and other technical data;
  • energy audits of plants selected to pilot NAMA implementation;
  • identification of potential improvements and best available technology; and
  • a thorough financial and economic analysis of NAMAs implemented at selected cement plants.

The industrial sector analysis established the overall context for implementing mitigation strategies, including the identification of key stakeholders and focus areas. While it yielded a wealth of information on Egypt's major industries and their potential for reducing emissions, this analysis is only a beginning for LECB efforts in Egypt. Government and private sector must now respond to the opportunities identified in the analysis and work together to define NAMAs and build capacities for their successful implementation.

Lessons Learned and Good Practices

In the process of gathering information about industries' needs and opportunities for increasing efficiency, this sector analysis was an invaluable tool for enhancing communication between government and the private sector. It allowed national experts to learn about the problems, needs and constraints faced by some of Egypt's most important industries. Such learning is crucial for achieving a discussion on how the private sector can contribute to overall national emission reduction goals. By opening up dialogue related to energy consumption and emissions reduction, Egypt's industrial sectors have become important partners in formulating effective mitigation efforts.

Key Messages

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Egypt is seeing an average annual increase of 5.1 percent in greenhouse gas emissions.

It is estimated that by 2030 emissions from important national industries such as cement, fertiliser, iron and steel will grow substantially unless action is taken.

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An industrial sector analysis carried out by the LECB project shows that these sectors also have the most possibility for significantly reducing emissions, with the cement sector having the greatest potential.

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The analysis also established the overall context for implementing mitigation strategies, including the identification of key stakeholders and focus areas.

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This work opened up important dialogue on the business case for energy efficiency, since the industries have seen increases in energy prices since the beginning of 2012.

More Info

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