Egypt is moving closer to launching its first SAF production facility: The Oil Ministry has been working on a plan that will see state-owned firm Egyptian Petrochemicals Holding Company producing the country’s first sustainable aviation fuels (SAF). Production from the project is expected to kick off in 2025, after the necessary studies are completed, a government source told Enterprise.

Remember: Unnamed international organizations are set to prepare studies and secure financing for the project during its initial stages, Oil Minister Tarek El Molla said earlier this month. Moreover, the government will form an executive committee featuring teams from its ministries to expedite work on the project. The committee will be tasked with streamlining procedures and working closely with the aviation sector — the end consumer of the biofuel.

What is SAF? SAF is a biofuel used to power aircraft that is made from non-petroleum feedstock such as waste cooking oil, animal fat, and non-food crops. It can reduce carbon emissions by up to 80% compared to traditional jet fuel, according to the International Air Transport Association (IATA) estimates. Aviation was responsible for 2% of energy-related carbon emissions in 2022, the International Energy Agency’s most recent figures show.

SAF global production is moving at a fast pace: IATA expects SAF production to triple to just shy of 1.9 bn liters in 2024, up from 600 mn liters produced last year, which would account for 0.53% of the aviation sector’s fuel consumption. SAF production has already doubled in 2023 compared to a year earlier. The International Airline Transport Association also estimates that SAF could account for 65% of the reduction in emissions needed by the aviation industry to reach net zero by 2050.

THE ROAD TO LOCAL SAF-

Egypt’s very own SAF production facility: US multinational conglomerate Honeywell has teamed up with the European Bank for Reconstruction and Development to complete a feasibility study within the next few months for a proposed SAF production facility in Egypt, a delegation from the firm said last month.

Remember: Honeywell has been considering building a SAF production facility in Alexandria under a public-private partnership with state-run Egyptian Petrochemicals Holding Company and local private companies. The facility is expected to produce 120k tons of fuel per year.

A gov’t platform to procure raw materials? The Environment Ministry plans to roll out a platform to facilitate the procurement of waste cooking oil needed for the production of SAF from the private sector, an official at the Waste Management Regulatory Authority (WMRA) told us.

More efforts to formalize the sector are needed: The government will need to ramp up efforts to license private sector players in the informal sector, given that the collection and refining of waste cooking oil are mainly dominated by the latter, the source said.

A regulatory framework is a must: A regulatory framework for SAF production needs to be passed to encourage investors to participate in the sector, government sources told us. While the current environmental law covers the use of waste cooking oil, more specific regulations on SAF production would fast-track the nascent SAF industry in Egypt, the sources added.

Eyes on FDI: The government aims to attract FDI to the project, the sources told us. The country’s oil refining and derivatives market attracted EGP 263 bn in investments in 2022, they added.

ALSO IN THE PIPELINE-

Sustainable biofuel from jatropha: The government is currently mulling over a project to produce sustainable biofuel from jatropha (nettlespurge) plants, where laboratory studies are being funded via an Italian grant, an Environment Ministry source told us. Once studies are complete, the government will offer the project to private sector players who may be interested.

What else is in the pipeline? Similar projects to produce sustainable biofuel from rice straw, eichhornia (water hyacinths), and arundo donax (giant reed) are also being considered, the source said, adding that some of the output from these projects could be exported to Europe.

European companies are already eyeing biofuel projects in Egypt: Norwegian biogas company Antec has shown interest in working on a biofuel project in Egypt, our source said. Italian oil and gas firm Eni is also working with authorities to prepare studies for a project to produce biogas with a capacity of 4.7 cbm per day, the source added.

Your top green economy stories for the week:

  • Gov’t kicks off new phase of Greater Cairo pollution reduction project: The Environment Ministry has begun the sixth componentof the World Bank-funded Greater Cairo Air Pollution Management and Climate Change Project and will improve the disposal and treatment of e-waste and healthcare waste to reduce unintentional persistent organic pollutants. (Statement)
  • The SCZone will create a route to transport green fuel produced in the zone to the Dutch Port of Rotterdam, which will help the fuel reach European markets, under an MoU inked between the two sides. The MoU will also see the two sides working on a green bunkering corridor that will link Singapore to Rotterdam through the Suez Canal, creating the first corridor for green bunkering between Asia, Africa, and Europe. (Statement)
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