Egypt’s building materials industry is seeking to augment its compliance with green manufacturing practices in a bid to boost exports to the European markets and retain a competitive edge. A green transition is seen as feasible, though it requires clear guidelines to meet the European environmental standards, industry players told Enterprise.

Overview of the industry: Egypt saw its exports of construction materials jump 28% y-o-y in2023 to USD 8.8 bn, with the UAE being the top importer, followed by Italy, Turkey, the US, and Canada.

To pivot towards green standards, the building materials industry would need to implement several measures, according to government and industry players that we spoke to:

  • A standard classification system of economic activities corresponding to Europe’s NACE, whereby the building materials industry is designated an international code.
  • Measuring carbon footprints to assess the emission levels of the products and ensure their compliance with European requirements.
  • CE marking: A regulatory standard that verifies the safety of products targeted to the EU.
  • ISO 14001 and ISO 9001: The international standards defining the criteria for environmental management systems and quality management systems.

The Chamber of Building Materials Industries (CBMI) has been backing the shift to more sustainability in the construction materials sector to reduce the industry’s carbon footprint, Ahmed Abdel Hamid, head of the Chamber of Building Materials Industries, told us. The chamber also plans to form joint committees to inspect construction materials factories and implement environmental compliance and recycling measures.

It has never been better for Egyptian refractories to make it to EU markets: Spiking energy costs and brick prices in Europe have boosted demand for Egyptian refractories, paving the way for Egypt to export bricks and insulation and cladding materials amid competition from Algeria and Libya, Ali Singer, head of the refractories division at the CBMI, told Enterprise.

Brick manufacturers have come a long way: Egyptian brick manufacturers have limitedaccess to the European markets, with only five being able to export their output, despite efforts to reduce emissions, Singer said. Some 400 brick factories, out of the current 500, have switched to run on gas and some of them were able to sell carbon credits. The transition to greener production facilities was initiated in 2005 with an EGP 700 mn-initiative — half of which was funded via a Canadian grant — that converted 50 factories to gas power and helped cut emissions by 90%, Singer explained.

But, there’re challenges ahead for cement, glass, marble manufacturers: Cement, glassand marble manufacturers, among others, are ramping up efforts to meet environmental regulations and reduce carbon emissions in order for their exports to remain eligible to enter the European markets as the latter tightens regulations, Sayed Abaza, deputy head of the CBMI, told Enterprise. The EU is gearing up to fully implement the Carbon Border Adjustment Mechanism — more commonly known by its acronym CBAM — in 2026, which will require importers to purchase certificates according to the associated carbon emissions, effectively introducing a tax on high-emission goods from non-European countries such as Egypt.

ICYMI: The EGX in 2022 announced it would set up Africa’s first voluntary carbon market. Themarket aims to allow companies in Egypt and Africa working on emissions-reducing projects to sell certified carbon credits, which can then be bought by other companies wanting to offset their emissions. In addition, two government sources told Enterprise in December that the government is planning to launch a pilot phase for a proposed mandatory carbon market in 1Q 2024.

Your top green economy stories for the week:

  • More green hydrogen agreements: Egypt has inked seven MoUs with international and local companies to develop green hydrogen and renewable energy projects worth USD 41 bn in the Suez Canal Economic Zone over the next ten years.
  • This includes South Korea’s SK ecoplant’s planned USD 2 bn green ammonia plant that will produce 250k tons of green ammonia a year by 2029.
  • Financial facilities for green exporters? The General Organization for Export and Import Control (GOEIC) is reportedly working with several local lenders to provide credit facilities for exporters looking to bring down emissions to comply with EU regulations.
Tags: