If Egypt is going to make good on its goal of becoming a regional leader in sustainable aviation fuel, it’s going to need a whole lot of used cooking oil. In preparation for the launch of state-led efforts to begin locally manufacturing sustainable aviation fuel — known more commonly by its acronym SAF — the government has greenlit a decision to set up a used cooking oil collection network of 30 collection and processing plants across 24 governorates, a senior government source told EnterpriseAM. Under the decision that will soon be announced in the Official Gazette, the 30 plants will collect and process the oil before sending everything off for conversion into SAF.

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The collection network will feed a planned USD 530 mn SAF production complex in Alexandria, which has been set up by the Sustainable Aviation Fuel Production Company, which was set up by the Oil Ministry in November of last year. Five ministries are jointly overseeing the project and developing incentives and investment options, according to our source. Construction and financing arrangements are currently underway through several international entities.

The launch of locally made SAF is now pencilled in for 2028, with a targeted 160k liters a year under the project’s first phase, according to our source. The government had initially been targeting a 2025 launch as recently as last year.

SOUND SMART- 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 International Air Transport Association estimates. Due to its chemical composition being incredibly similar to traditional aviation fuel, SAF can be mixed in ratios currently reaching up to 50% in commercial use, with 100% SAF-fueled planes being the end goal.

Egypt uses plenty of cooking oil, much of which can be recycled. Out of the 2.5 mn tons of cooking oil used by Egyptians every year, some 1 mn tons of this can be collected, our source told us. Estimates from a 2020 paper by the National Research Center, which align with figures from our source, said that some 90% of the 2.5 mn tons is thrown down the drain. On top of missing out on recycling the used oil, throwing oil down the drain also causes serious sewer blockages, spiraling maintenance bills for the government, and even social discontent, according to some.

But the real challenge is in collection. Most Egyptians throw their used cooking oil down the drain, so getting enough people to agree to bottle up their used oil and to efficiently collect it is no easy task. The mostly informal used oil collection industry’s margins are tiny, and we’re yet to hear what offtake price the Sustainable Aviation Fuel Production Company will offer and if it will be more or less than what it is currently exported for.

This should help us play our part in reaching the International Civil Aviation Organization’s goal to reduce CO2 international flight emissions by 5% by 2030, as laid out in its Global Aspirational Goal for the decade. But reaching this is only the first step in some major changes to come for the jet fuel industry, with the UN agency pencilling a net-zero target for the entire aviation sector by 2050.

EgyptAir’s SAF targets will also drive demand, with the national flag carrier already aiming to have SAF represent a 2% share in its fuel mix this year, which can currently only be achieved through imports. Fast forward to 2030, and EgyptAir is looking to increase that further to 6%.

But demand for Egyptian-made SAF may also come from overseas, as the EU’s ReFuelEU aggressively pushes for 2% by 2025, 6% by 2030, 20% by 2025, 42% by 2045, and 70% by 2050 for jet fuel supplied at EU airports. Failing to meet these targets can mean large fines, potentially putting Egypt in a prime position to provide SAF to Europe if it can ramp up used oil collection and SAF production quickly enough.

FYI: If you don’t know your blue hydrogen from your green hydrogen or your biodiesel from your sustainable aviation fuel, you can check out our explainer on green fuels.

It’s not just Egypt upping its SAF manufacturing efforts, as the supply of sustainable aviation fuel globally is set to expand, with 2 bn gallons expected to hit the market by 2028, bringing the industry closer to its 3 bn-gallon target for 2030, according to the SAF Grand Challenge report (pdf). But despite a threefold increase in production last year, SAF still accounts for less than 1% of global jet fuel demand, International Air Transport Association’s (IATA) Gulf and Near East manager Khaled Al Eisawi said at an aviation conference in Dubai back in November.

Your top green economy stories for the week:

  • Total installed wind capacity in Egypt hit 3.03 GW after the Red Sea Wind Energy consortium fullycommissioned its 650 MW wind farm in Ras Ghareb. The country now has 5.5 GW of total renewable energy capacity, with wind and solar power making up 6.7% of the country’s total power generation.
  • China’s state-owned utility giant State Grid will invest USD 500 mn to develop twosolar projects in Egypt, with a combined capacity of 900 MW. The first project will be located in Minya and will have a capacity of 500 MW, while the second one will be in the Western Desert with a capacity of 400 MW.
  • Egypt is planning to issue new tranches of Panda and Samurai green bonds to finance a range of sustainable development projects, a senior government source told EnterpriseAM. The sales would mark the second Panda bond issuance and the third Samurai issuance for Egypt.
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