The government’s used cooking oil (UCO) collection network to feed a planned USD 530 mn sustainable aviation fuel (SAF) production complex is advancing, with the Environment Ministry launched a comprehensive program last month to regulate the network, a government source told EnterpriseAM. The program establishes clear mechanisms for collecting and directing used oil for industrial purposes.

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REFRESHER– Last July, a government source told us the Environment Ministry was preparing to issue a decree, to be published in the Official Gazette, to launch the used oil collection system. The decree includes regulating the issuance of licenses for activities related to the handling of UCO and implementing an integrated management system for used oils, encompassing collection, transportation, storage, and export, according to our source.

But why UCO? The MENA region produces very little first-generation biofuels, which are derived from commodities like corn and sugar or vegetable oils, according to a report by Fitch Solution’s BMI. The reason why? The region’s climate and land stock is mostly unsuitable to efficient crop production, and the areas that are are in short supply. Even Egypt — with the largest agriculture sector in the region — doesn’t produce enough surplus crops to be used for first-generation biofuel production, leaving UCO as the obvious viable option.

Biofuels also have many applications and advantages beyond SAF, including cutting emissions in the industrial sector by some 85%, Bio Rotterdam CEO Ibrahim Farouk told EnterpriseAM. The feedstock UCO can also be used to manufacture soap, animal feed, some lubricants, and reduces the import bill for petroleum products, another source said. Improper disposal of UCO also raises wastewater treatment costs and complicates recycling as just one kg of oil can contaminate 1k cbm of sewage.

The system aims to collect 500k tons of UCO by 2030 and 730k tons by 2035, compared to the current collection of 100k tons. The system also includes granting licenses to collect oil from residential units, hotels, central kitchens, and restaurants. Household use accounts for 65% of the targeted amount of used oil, compared to 25% from restaurants and hotels, and 10% from food processing plants, according to a study seen by EnterpriseAM.

Our move into SAF has caught the attention of a sovereign wealth fund, with the Abu Dhabi Investment Authority partnering with the Arab Organization for Industrialization to develop the USD 530 mn SAF plant, a senior government source told us. The fund will manage the financing and construction of the project.

Saudi firms are also scaling up operations in Egypt’s biofuel sector, while foreign companies are entering the market through agreements with local factories to lower their carbon footprint by substituting part of their fuel use with biofuel, according to our source. Saudi Arabia’s Al Faleh Company has already opened a biodiesel and cooking oil refining plant in Sixth October and plans to establish another large plant in Alexandria next year for export to Europe as part of its expansion plans in the Middle East, the source added.

And we’re already seeing demand from offtakers at home and abroad. EgyptAir’s SAF targets will 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. 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.

But Pricing is a challenge. To discourage improper disposal, UCO is collected at EGP 35 per liter, then sold to factories for EGP 48 and processed into biofuel retailing at EGP 75, Farouk said. The price makes it way less competitive locally with subsidized diesel priced at EGP 17. But it’s hoped that scaling up collection, boosting production, and tapping into European export markets could drive demand and lower costs over time.

Securing enough feedstock is also an issue, as many companies export raw UCO to Europe for biofuel production overseas, Farouk added. To get around this, the government should halt exports of UCO, industry insiders told us. Another option could be to impose export fees to incentivise the feedstock being used domestically for the production of biofuel.

Egypt, along with its regional peers, might even need an import-dependent strategy to advance biofuel plans, according to BMI. Imports are also essential to reach industrial scale for the next three to five years, Delta Oil’s CEO Serag Moussa told us. For SAF production, a hybrid model maximizing local UCO recovery while importing certified volumes is essential, Moussa told us.

REMEMBER- The launch of locally made SAF is 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.

Your top green economy stories for the week:

  • The Environment Ministry and GIZ are preparing to launch the fourth phase of the National Solid Waste Management Program, with new projects planned in Greater Cairo and Alexandria, along with a strategic master plan starting with Qena. (Statement)
  • Port Said Governorate signed a ten year agreement with Nahdet Misr for Environmental Services to handle waste collection, transport, and street cleaning in Port Said and Port Fouad, with operations starting January 2026. (Statement)
  • The Environment Ministry and the Chamber of Diving and Water Sports signed two cooperation protocols to strengthen marine protection and pollution control. The agreements focus on reducing single-use plastics, improving waste management during marine excursions, and launching underwater cleanup campaigns along Egypt’s coasts. (Statement)
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