Cleaner, greener, AND more profitable industrialization? Renewable energy, green industry, sustainability — these are the buzzwords that have dominated the industrial development space of late. Yet, many industries currently being targeted for expansion are not exactly known for their environmental friendliness. Which begs the question: is it possible to square industrial expansion with eco-consciousness?

Enter Egypt’s new eco-industrial parks program: The Trade Ministry is partnering with the United NationsIndustrial Development Organization (UNIDO) to promote eco-industrial parks (EIPs) through its Swiss-funded Global Eco-Industrial Park Programme (GEIPP). This nearly EUR 1.7 mn initiative is piloting a program to transform industrial parks — significant emitters of pollution and waste — into more sustainable industrial ecosystems, right in our backyard.

What exactly are EIPs? In short, EIPs are industrial parks that integrate emissions-monitoring, waste-reuse, and sustainability planning into their operations, all while attempting to optimize across economic, social, and environmental outcomes. The hope is that by scaling these processes up to the industrial park level and coordinating across tenants and sectors, EIPs will be able to take advantage of complementarities across industries to lower the cost of sustainability measures.

Learn the lingo: EIPs are geared toward creating or strengthening the “circular economy” — UN-speak for making sure that virgin inputs are reused or recycled as much as possible. The idea is that in lieu of reducing consumption, we should try to make the products we consume greener through input reuse.

Which parks are participating? Egypt currently has three industrial parks — among a total of 147 nationwide — enrolled in the program: Orascom’s Sokhna complex, Polaris’s Sixth of October complex, and Robbiki Leather City in Badr City. Both the Orascom and Polaris parks have a mix of local and multinational companies working across a number of industries, while the Robbiki park is primarily comprised of small tanneries.

How does the program work? At a 20 May conference the EIP Egypt program held in Cairo, officials shared that the Trade Ministry and UNIDO are working together to design and implement a national regulatory framework for EIPs, alongside relevant government and private-sector stakeholders. This includes drafting legislation that is appropriate for the Egyptian context, but also in line with global EIP standards, communicating the benefits of EIPs to industrial park tenants, installing monitoring and waste reuse infrastructure, packaging the parks for private-sector investment, and putting in place park management teams that can assure continued operation of EIPs.

This is a bit of a fact-finding mission: By comparing outcomes at these facilities over its planned three-year run, the EIP Egypt program hopes to develop a locally appropriate framework for EIP implementation and monitoring, build capacity and facilitate cooperation across government entities, and source knowledge about what challenges broader implementation of the EIP program in Egypt’s — as of 2022 — 147 industrial parks might face.

This program is very much in line with our climate commitments: The Madbouly government has said that it wants to increase the share of renewables in power production to 42% by 2030 and 50% by 2040, while the International Cooperation Ministry is aiming to reduce CO2 emissions by 17 mn tons a year by closing 5 GW of gas-fired power plants by 2025.

You don’t have to be a tree-hugger to get on board with EIPs, though — the “sustainability” in eco-industrial parks is as much about companies’ bottom lines as saving the environment. Beyond saving money on critical inputs, EIPs offer advantages for assuring exports find markets abroad and provide expanded chances for private investment.

One man’s trash is another man’s treasure: A key feature of EIPs is their potential for expanding industrial waste reuse. Wastewater treatment and reuse is particularly important given the high cost of water and its limited availability for industrial use. By installing wastewater processing facilities, industries that use significant amounts of water — such as textile, automotive, and building materials manufacturers — can get a lot more bang out of their buck.

Waste not, want not: Water isn’t the only kind of industrial waste that can be fruitfully recycled. Solid waste and oil sludge can be used to produce biofuel capable of powering industrial production — critical for industries like cement, which has faced fuel price increases in recent years.

Building on existing strengths: Egypt already has legislation in place that can help facilitate waste reuse. In 2020, the president signed into law a waste management law to create a regulatory authority responsible for creating a unified waste management program. In 2022, the Waste Management Regulatory Authority was tasked with formulating strategies for, among other things, expanding recycling and converting waste into profitable resources.

Export sustainability is key: More and more countries want to source products from companies that can provide data on their carbon footprints and demonstrate a tangible commitment to sustainable production. EIPs can help domestic exporters adhere to international regulations and provide others with the data and information necessary to break into the export market.

Incoming EU legislation is making industrial transition a priority rather than a preference: The EU’s Carbon Border Adjustment Mechanism (CBAM), set to take full effect in 2026, will place a tax on EU imports whose carbon price exceeds that in the EU. Intended to encourage countries outside the EU to adopt more environmentally friendly industrial production standards, this legislation will require exporters to provide information about their goods’ carbon footprints. The EU is our biggest trading partner and was the destination for 31.1% of our exports last fiscal year, according to data (pdf) from the central bank.

Attracting multinationals: Being able to market an industrial park as “green” also appeals to multinationals looking to relocate production to Egypt. Having monitoring systems in place that accord with international standards may make production in Egypt more attractive for this segment of companies.

The benefits of EIPs are not just limited to industrial areas, said New Urban Communities Authority’s Samar Khalil Hassan at the 20 May GEIPP conference. NUCA and the Housing Ministry are already exploring ways to integrate EIPs into plans to build smart cities, including constructing industrial parks in these cities and using these parks to produce eco-friendly building materials.

Challenges remain: EIP expansion faces some challenges on the financing and implementation fronts. Significant capital investment will be needed to build utilities and infrastructure to bring existing industrial parks up to international standards. UNIDO is currently in the process of developing an online platform that will showcase potential investments in order to facilitate private-sector participation in bridging this gap.

On the implementation front, UNIDO, the Trade Ministry, and the parks enrolled in the pilot program have faced difficulties explaining the benefits of EIPs to industrial park tenants, building park management capacity, and institutionalizing regulatory best practices across ministries. UNIDO and the Trade and Industry are seeking to address these gaps through regular capacity building and workshops.

Your top green economy stories for the week:

  • Siemens Energy has launched a 1.9 MW, 8.5k sqm solar PV plant that will help power its service center in the Ain Sokhna industrial zone by covering 90% of the center’s energy needs and slashing its CO2 emissions by 1.5k tons annually. (Statement)
  • Cemex to run waste recycling plant in El Mahalla: The Gharbia governorate has signed a partnership agreement with construction firm Cemex Egypt’s Assiut Cement Company to manage and operate a non-hazardous waste recycling and processing plant in El Mahalla El Kubra. (Statement)
  • GAFI looks to drum up Dutch investments in green hydrogen: General Authority for Investment and Free Zones (GAFI) head Hossam Heiba showcased incentives for green hydrogen projects in Egypt in a bid to draw Dutch investors to the sector during his participation in the World Hydrogen Summit in the Netherlands. (GAFI statement)
Tags: