Egypt is working towards finding a new energy mix for industry, and particularly for cement plants, according to the environment minister.
Denying reports that officials decided to allow coal imports, Minister of State for Environmental Affairs Laila Iskandar says that the plans for determining a more efficient energy mix include renewable sources, energy conservation and heat recovery.
Conflicting statements emerged from officials after a Sunday meeting of the Cabinet and cement industry players, making it seem like Egypt was making strides towards opening the door for coal imports.
Iskandar, a vocal critic of coal usage, says that these conflicting statements are deliberate, clarifying that her ministry is studying the use of several energy sources. Sunday’s meeting pressured cement manufacturers to reduce recently surging prices and to discuss solutions to avoid the energy crunch, she adds.
On Monday, Reuters quoted Minister of Industry and Investment Mounir Fakhry Abdel Nour as saying that Egypt would allow cement companies to use coal to power factories, “but in parallel they must abide by strict environmental regulations.”
His announcement clearly overlooked months of resistance against this decision by environmentalists and the minister of environment herself.
Amidst a crippling natural gas shortage that has hindered cement companies’ production and fueled a wider energy crisis, the debate over whether to allow energy-intensive industries to import coal has been one of the most divisive issues facing the previous and the newly appointed Cabinets.
Iskandar, who remained in her post in the new Cabinet after a major reshuffle, has for months resisted the government’s urging to move forward with these plans amidst intensive lobbying for coal imports by the cement industry.
Abdel Nour’s statement made it seem like the battle was lost and that Iskandar had been pressured to concede to the inevitable, on condition that the industry abide by strict environmental standards which her ministry would draw up.
The newly appointed Prime Minister Ibrahim Mahlab held a meeting on Sunday with the ministers of industry, petroleum, electricity and environment, along with representatives of the cement division in the Federation of Industries, to discuss the country’s energy crisis.
According to a statement on the Industry Ministry’s website, those present in the meeting agreed that the Environment Ministry would study European standards for the use and handling of coal so it could be used to power cement factories. The statement said that once implemented, the usage of coal could save 450 million cubic feet of natural gas per day, which could be rolled over for use in non-energy intensive industries.
Once Egypt creates a system for coal imports, the statement added, factories would prepare to start implementation by next September.
“The government will implement strict measures and penalties, to the extent of closing factories, for those who do not abide by the Environment Ministry’s standards,” the statement read.
Iskandar responded with a statement Monday that her ministry would “review the European energy mix and accompanying standards as an alternative to the energy mix currently used by Egypt’s cement industry, ensuring that it does not harm the environment under any circumstances.”
Cement prices have surged over the past weeks, eliciting an uproar from market players and prompting Mahlab to convene an emergency meeting of stakeholders on Sunday in an attempt to bring prices down to reasonable levels.
Some see this as a form of arm-twisting by the cement industry, which has been intensively lobbying for the coal imports.
At Sunday’s meeting, industry representatives blamed skyrocketing cement prices on the sharp drop in production, which was previously reported to have reached 20 percent, as well as the complete halt of some production lines.
“Several possible solutions to the energy crisis were discussed, among them rationing consumption in all sectors, improving usage efficiency, […] developing heat recovery processes [and] enhancing the use of new and renewable energy,” according to the Environment Ministry’s statement.
The ministry would prepare a comprehensive study on the use of coal as a source of energy, it said.
“The purpose of the study is to say that if Egypt decides to import coal, these are the measures it has to ensure are in place. These measures cost money and whoever imports it has to calculate these costs,” says Iskandar.
Iskandar, who has worked extensively with the Egyptians Against Coal campaign, stresses the need to consider health, social, economic and environmental factors when allowing the use of coal.
“It is shocking to us that there are contradictory statements from the government, especially since the government had decided to form a committee to study the potential impact of coal and to study other solutions to the fuel crisis,” says Ahmed Droubi, coordinator of the Egyptians Against Coal campaign.
Led by Essam Heggy, science advisor to the president, along with Anhar Hegazy from the energy efficiency unit at Cabinet’s Information and Decision Support Center, results of the study were due to be released in early April.
“This is an interim government that does not have the right to take a decision that will bind Egypt to importing coal for decades to come,” says Droubi.
The health minister said it will be a serious threat to Egyptians for which his ministry and the healthcare system will be paying the price. The tourism minister said it would harm tourism, especially in Ain Sokhna and Safaga, which are the potential points for importing coal via the Red Sea.”
Amr Ali, the executive director of the Hurghada Environmental Protection Conservation Association (HEPCA), says this week’s developments reflect the “complete irrationality of the decision-making process in Egypt, to a laughable degree.”
Investors in touristic developments in these areas would flee along with the tourists if factories there began using coal, Ali warns.
He accuses the industry minister of being a direct representative of cement manufacturers, not the overall industry in Egypt, saying the decision shows that personal interests override public interests.
“Foreign investors don’t care to solve national issues. They just want cheap energy to increase their already skyrocketing profit margins, and use the shortage of natural gas as an excuse. There are environmental taxes abroad so coal is not such a cheap source of energy,” Ali adds.
But there are several industries that could use coal, and this would solve the natural gas shortage, contends Alaa Ezz, secretary general of the Federation of Egyptian Chambers of Commerce and advisor to the Federation of Egyptian Industries.
“I’m also an environmentalist, and I say there are technologies that are feasible, cost-effective, available and applied by these same multinational companies in other countries to have zero emissions,” says Ezz, who is also secretary general of the Association of Enterprises for Environmental Conservation.
“A watchdog is needed to measure emissions,” he says, adding that this is the job of the Environment Ministry. “If the factories violate standards, you can close them down.”
“You’re talking about multinationals with their own standards worldwide regardless of the country they operate in. Many of them surpass Egypt’s regulations regarding child labor and emissions, and this is part of their social responsibility wherever they operate,” Ezz says.
Mahmoud Kaissouni, environmental adviser to the Ministries of Tourism and Environment, is certain that Iskandar is coming under intense pressure.
“I am sure that if she agreed to complete this study it will be to point out the hazards of coal use, and if she is pressured to agree to this move, then she will probably resign,” says Kaissouni.
As for the environmental standards that are supposed to be set by the ministry, he says, “I don’t think these standards will be met. At first, maybe there will be some caution to comply with these, but over time it will fade.
“Over the past years, the Environment Ministry did not have the power to close down factories with reported violations, and this is without the use of coal,” he says, adding that it would be detrimental to citizens’ health.
The recent surge in cement prices, which have exceeded international prices, led many to accuse industry players of manipulation. Ezz explains that there are fixed costs which are divided on production, so when production decreases due energy shortages, prices increase.
In addition, the on-off natural gas supply to factories damages the furnaces, which comes at a great cost, he asserts.
“This is an industry continuous process. If it stops, the furnace cracks from the inside and you have to restart it, and the cost is astronomical,” he claims. “The only solution is to switch to coal.”
Confident that the mostly multinational companies that operate in Egypt’s cement industry could implement technologies to make emissions negligible, Ezz argues that civil society should instead focus on the supply chain.
“The problem may arise when the coal makes its way from the port to the factory. You have to ensure contained environments during the transportation process,” he says.
However, coal critics still see cause for grave concern.
Kaissouni says, “The black cloud we have been suffering from for years will be insignificant compared to the impact of coal.”