Egypt’s oil sector gears up for a low-carbon future: A couple of years back, the Oil Ministry unveiled a strategy aimed at reducing carbon emissions and increasing reliance on natural gas. The strategy serves as the backdrop of some ambitious targets — with the country’s oil sector previously being given a target cut down its carbon emissions by 17% by 2025.

Why this matters: Oil and gas operations contribute some 15% of global energy-related emissions, according to the International Energy Agency.

The ministry’s carbon reduction plan is anchored in six main pillars: Reforming energy subsidies, increasing reliance on natural gas, enhancing energy efficiency, reducing carbon emissions, integrating renewable energy at petroleum sites, and developing biofuel and increasing the use of hydrogen as an energy source.

Boosting energy efficiency is key to achieving these goals — as it offers economic returns and substantial emission reductions. The ministry has implemented around 340 projects aimed at optimizing energy use, resulting in annual savings of USD 135.5 mn and reducing 1.2 mn tons of CO2 emissions a year. These efforts include detailed energy audits in five key companies and training some 250 engineers.

Energy efficiency centers lead these initiatives: Building on these efforts, the ministry is establishing an energy efficiency center in Alexandria, complementing an already existing center in Cairo that develops and oversees energy-saving policies. Along with optimizing energy use, these centers also train employees and contribute to sustainable development and emission reduction. There is also a plan for every local petroleum company to have its own energy efficiency department to further this mission.

Also helping: Carbon capture and storage (CSS) is another promising solution for reducing emissions in the oil and gas industry, seeing as they enable industry players to minimize their carbon footprint while boosting production. Shell Egypt, in collaboration with the Egyptian Natural Gas Holding Company (EGAS), is implementing a framework to manage and reduce emissions. The issue with such solutions however remains their economic feasibility, former Oil Minister Tarek El Molla said.

Utilizing captured CO2: The ministry is working with the World Bank to develop sustainable economic models for CCS projects. Captured carbon can be used to enhance oil recovery through CO2 injection processes and manufacturing synthetic fuels or chemicals.

Some missing pieces of the puzzle: Financing is a key obstacle to decarbonization, as deploying carbon reduction and capture technologies requires significant investment. There’s also the need to introduce policies and regulations ensuring long-term storage safety, reducing economic costs, and providing infrastructure and suitable project sites.

Steps in the right direction: Last month, a number of state-owned oil and gas firms and international energy companies inked MoUs to enhance cooperation in areas such as operational safety, carbon capture and storage, and decarbonization.

There are several noteworthy success stories: The state-led National Initiative for Smart Green Projects has spotlighted key achievements in the petroleum sector — Alexandria National Refining and Petrochemicals Company was recognized for its project to use hydrogen to power boilers, reducing dependency on natural gas. And the Assiut National Oil Refining Company was recognized for its eco-friendly project that uses treated industrial water and planting carbon-reducing jojoba trees.

And more: Qalaa Holdings’ subsidiary Egyptian Refining Company has introduced several energy-reduction initiatives that helped it reduce its emissions by over 110k tons a year, a company representative told EnterpriseAM, adding that the company is also working to reduce direct emissions by enhancing its recovery of flare gasses.

LNG as a transition fuel: Liquified natural gas is positioned as a practical, lower-emission alternative among fossil fuels. To meet global demand, there is a need to tap into all energy sources, so implementation of projects to help boost LNG production in tandem with investing in green alternatives will help us achieve a balanced and sustainable shift towards decarbonization, according to Shell Egypt Vice President Dalia El Gabry.

Egypt has been steadily climbing up the Energy Transition Index (pdf), which measures 120 nations’ “current energy system performance and on the readiness of their enabling environment.” Egypt ranked 75 in this year’s index, up from 79 last year. “The country’s commitment to enhancing the diversity of its energy mix, increased contribution of renewable energy and advancing infrastructure development has effectively mitigated these risks over the past year,” the report read.

Leveraging technology for decarbonisation: Digital tools and solutions are being increasingly incorporated by companies to monitor emissions. Shell Egypt for instance is employing advanced technology to help reduce and manage emissions in its operations.

Shell’s road to net zero: Shell aims to achieve net zero by 2030, El Gabry said, pointing to the company’s efforts to align its global targets with its operations in the Egyptian market, ensuring the transfer of the best global practices.

The Egyptian General Petroleum Corporation is also making strides on that front: The EGPC has collaborated with Schneider Electric and China’s Huawei to deliver integrated energy solutions tailored for the oil sector in Egypt — helping set up digital centers in oil facilities and aid the sector with its digital transformation.

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