Future of Egypt’s coal imports still topic of heated debate
With Egypt in the grips of both an economic crisis and a severe power shortage, the question of whether to allow energy-intensive industries to import coal has been one of the most contentious and divisive issues facing the interim Cabinet.
Egypt’s energy crunch has hit cement companies hard, with a shortage of natural gas causing production in the sector to drop by around 20 percent. In response, the government under former President Mohamed Morsi had given a verbal commitment to allowing cement firms to import coal, so long as they were outside of populated areas.
At the time, it was reported that the cement industry, which accounts for 2 percent of the country’s GDP, would be the first energy-intensive industry to transition from natural gas to coal to power its 43 kilns spread across the country. Concerns were raised about the environmental and broad health impacts of the move.
But before a bill could be passed to legalize this commitment, Parliament was dissolved after Morsi was deposed and his government disbanded. The issue was left unresolved.
When the interim Cabinet was seated in early July, the question of coal fell into the lap of newly minted Minister of State for Environmental Affairs Laila Iskandar.
“A deeper look at coal was very disturbing, particularly from the perspective of a future for generations of Egyptians that is going to be pretty bleak health-wise and resource-wise,” said Iskandar. “So we started forming a team and we said ‘no, we cannot accept coal’.”
Speaking on February 18 at a session of the Cairo Climate Talks, Iskandar gave an update on the ongoing debate.
The cement industry has launched an intensive lobbying campaign, visiting the ministry on an almost daily basis.
“We are almost going to assign them an office in the building,” joked the minister.
The lobbying efforts have been focused on five main talking points, according to Iskandar: Coal is cheap, it can be made safe, it can be put into use in as little as 18 months, usage and emissions can be controlled and monitored by authorities, and it is critical for the economy because of all the jobs in construction.
Facing a constant barrage of industry lobbyists, the Environment Ministry decided to consider and respond to each of these five points. First, to determine whether switching to coal would actually save money, the ministry began collecting data comparing the cost of various energy sources in the medium and long term.
Iskandar also evaluated industry claims that a transition to coal would take as little as 18 months, presenting a quick solution to Egypt’s energy troubles.
“Experts from Europe came and confirmed that it takes eight to 10 years to build the ports and facilities and the roads and the storage and everything,” said Iskandar.
“Next, the efficiency and monitoring: We showed data about how poorly we’re monitoring their emissions right now while they’re using gas. And how impossible it has been to shut down any factory that violates environmental laws in this country,” she explained.
On the question of jobs, she said data from around the world shows that “even though there are a lot of jobs in the construction sector, there are even more jobs in the tourism sector.”
With the fragile Red Sea coast the primary entry point for any future coal imports, the ministry believes damage to the region’s potential for tourism outweighs the benefits it may see from cement plants.
Privately, Iskandar said, industry insiders admitted the ministry’s conclusions were correct.
“Many senior people in the cement industry began coming around to us and whispering in our ears that we were right. So why are you still asking for it? They couldn’t say. So again, it all comes back to money.”
As the debate rages on, Iskandar and her team have managed to score a few small victories.
On February 4, the ministry ordered France-based Lafarge Cement to halt preparations to convert its Suez governorate factory to run on the coal-derivative coke. Last year, the company delivered an impact study on the use of the fuel, which the government has yet to rule on.
According to the ministry, however, site inspections found both coal products and facilities being built to store it. This followed a previous violation, which in November 2013 prompted Iskandar to initiate a legal process against Lafarge.
On February 16, Iskandar joined Suez Cement in inaugurating a facility that converts household waste into fuel that can be used to power the company’s cement kilns. Known as refuse-derived fuel (RDF), this pre-sorted municipal waste has been burned as an energy source for decades in Europe and Japan. It is generally regarded as less polluting than traditional methods of incinerating garbage, with the added bonus of generating energy in the process.
According to Suez Cement, the Kattameya facility will process 35 kilotons of waste, providing 20 percent of the plant’s energy needs.
Constructed over a year with 5 million euros in funds provided by Suez Cement, the facility is the first of its kind in Egypt, and Iskandar hopes a series of similar plants will be set up.
She has already assisted cement firms in Suez, Beni Suef and Alexandria in meeting with local governors to arrange for the right to use domestic waste. Still, she noted, the companies are asking for coal.
Indeed, Suez Cement, though trumpeting its investment in the establishment of the plant as well as other alternative energy projects, such as a wind farm in Gabal El Zeit, has been quite clear that it views such emissions as a complement to fossil fuels, rather than as a replacement.
“The new facility is expected to reduce CO2 emissions by 39,600 tons per year, thus mitigating the possible future negative impacts from coal,” reads a company press release.
Despite her high-profile role, Iskandar is keen to emphasize that final authority on the issue of coal does not rest with her. The Ministry of Environment, along with other ministries, is working on a study to assess the economic, health, environmental and social impacts of coal. How to weigh those various factors is ultimately the responsibility of the prime minister.
In the meantime, she said, the person leading the discussion is Essam Heggy, science advisor to the president, along with Anhar Hegazy from the energy efficiency unit at Cabinet’s Information and Decision Support Center.
“They paint me as such a powerful person who can decide on whether coal comes into Egypt or not,” she says. “This is not the decision of the Ministry of Environment, and definitely not poor little old me.”