The case against coal in Egypt

Egypt was among 23 countries that pledged on Thursday to end the use of coal in generating electricity on the sidelines of the UN climate change conference in Glasgow, COP26.

Yet Egypt has seemingly already abandoned the plan laid out in its 2030 sustainable development strategy to incorporate coal in the national energy mix in favor of cleaner and more readily available energy sources such as natural gas, with coal consumption now concentrated for the most part in Egypt’s cement production industry.

The COP26 pledge allows Egypt to present itself internationally as a climate defender and increase its viability as a destination for much-needed green investments, according to Mohamed Younes, a climate justice researcher at the Egyptian Initiative for Personal Rights. But Younes said Egypt could make a real difference if it were to use the “golden opportunity” of its self-sufficiency in natural gas “to get rid of coal use in all industries,” a transition that both industry and economic experts consulted by Mada Masr said would be feasible.

Carbon dioxide emissions from coal are twice those of natural gas, while burning coal also produces ash containing dangerous components such as arsenic that seriously damage both health and agricultural products.

Cement companies began to use coal in Egypt in 2014, when a natural gas scarcity meant that the electricity sector had priority access to the fuel, leaving the cement sector wanting. The government’s approval for coal imports was met with widespread condemnation at the time, with then-Environment Minister Laila Iskandar standing in opposition to her fellow Cabinet members, while the Egyptians Against Coal campaign, a coalition of experts, academics, environmental activists and non governmental organizations involved in environmental protection, led civil action to contest the decision.

Abolishing the use of coal in Egypt is possible only if the government decides to reduce the cost to industries of alternative energy sources, especially natural gas, said Ahmed Abdel Hamid, the head of the building materials chamber of the Federation of Egyptian Industries.

It is technically very feasible for cement producers to stop using coal, said Abdel Hamid, but he claimed the government would need instead to offer natural gas, which is produced locally, at cost price to the cement industry, as it does to other industries that are less energy-intensive.

The Cabinet hiked natural gas prices for industry in October from US$4.5 per million thermal units to $5.75 for energy-intensive industries, and to $4.75 for less energy-intensive industrial producers. 

With the cost of coal in the global market also spiking, Abdel Hamid suggested that now could be an ideal time for the government to pivot away from the fossil fuel. When coal imports were allowed to counteract the natural gas shortages in 2014, coal cost $130 per ton, according to Abdel Hamid, though prices were as high as$270 per ton this year.

Given that all the coal used in Egypt is imported, Younes suggested that policies being pursued globally such as carbon taxes on industries that consume coal and obliging banks to finance more environmentally friendly projects rather than those where coal is used could be very effective, and even allow for Egypt to abolish coal completely in two to five years. 

A former Egyptian Tax Authority official who spoke to Mada Masr on condition of anonymity said that when cement companies started using coal in 2014 there was no discussion in policy-making circles around a “carbon tax” or any environmental tax. However, the former official said that the tax could be beneficial.

Pollution from industries entails a cost to the taxpayer, especially in terms of public health, said the former official. It is natural, then, for those industries to pay part of the bill for the damage they cause,” the source added.