The road to a green Suez Canal: Last year, the Suez Canal Authority (SCA) unveiled its plansto turn the shipping corridor into a “green canal” by 2030 that is in line with Egypt’s sustainable development goals. Now the project is underway, with the environmental impact study in motion ahead of moving forward with the first phase.

Remember: The Suez Canal is a vital source of FX for cash-strapped Egypt and it accounts forabout 12% of global sea-borne trade — or at least it did before recent disruption to the Red Sea shipping as the number of ships passing through the waterway fell nearly 37% in January. Annual receipts from the canal came in at USD 9.4 bn for the previous fiscal year.

The move is part of a wider plan to gradually greenify all of the country’s ports so they aremore sustainable. The plan also includes shifting maritime services to rely on renewables and treating waste from ships.

Incentives to help the plan gain momentum: The SCA is mulling a comprehensive program that would introduce incentives for vessels using green fuel alongside other steps to help reduce emissions, sources in the maritime transport sector told Enterprise.

The Suez Canal is already helping reduce emissions: The canal helps reduce the shippingdistance between India and Europe by some 7k km, helping cut down on some 31 mn tons of carbon emissions in 2021 alone — saving vessels some 10.3 mn tons of fuel — in comparison to alternative routes.

On the waste management front: The SCA last year inked an agreement with Antipollution, amember of the Greek environmental firm V Group, to set up a local waste management company in West Port Said, which Egypt will use to provide solid and liquid waste management services to ships using the canal. The project’s environmental impact assessment is currently underway.

What Antipollution said: “The project is the first step towards localizing the technology for thesustainable and safe collection of ship waste,” V Group Chairman Vyron Vasileiadis said. The project will create a sustainable future for the Suez Canal and its surrounding area, he added, explaining that it will be implemented over several stages, the first of which will cover the collection of solid waste from ships in waiting areas.

What the experts have to say: Egypt's geographical location helps it attract more investmentsin the logistics sector. Instead of ships getting their maintenance services and fuel needs before reaching Egypt, the availability of solid waste disposal, maintenance, and fueling services will help drive more investments in the area, Mohamed Daoud, the vice president of the Arab Academy for Science, Technology and Maritime Transport, told us.

The shift towards green fuel can help untap a new revenue stream: Egypt faces stiffcompetition when it comes to fuel supply, with its prices being the highest in comparison to fuel supplied by Greece, Cyprus, and Italy. However, with rapid developments in renewable energy and green hydrogen projects, Egypt stands to reap the benefits of vessels making the shift towards clean energy.

We have a lot of green fuel projects on the way: Last year, Egypt inked a frameworkagreement with Maersk’s green methanol company C2X to produce green fuel in the Suez Canal Economic Zone. The first phase of the project will require USD 3 bn of investment and will produce 300k tons of green methanol per year. The company expects to increase capacity to 1 mn tons a year by the final phase of the project. The project will also use a mix of solar and wind power to generate electricity for pilot stations.

Your top green economy stories for the week:

  • Schneider and ADCB Egypt ink green financing MoUs: Schneider Electric and Abu Dhabi Commercial Bank’s Egypt wing inked two MoUs to finance green and sustainable projects in Egypt, according to a statement (pdf)
  • EAIC to target green investments: The Egyptians Abroad Investment Company (EAIC) will likely kick off operations this year and will initially target investments in agriculture and trade, before expanding into renewable energy and green hydrogen.
  • KSA ups the competition in the green energy sphere: The Saudi National Grid and Greece’s Independent Power Transmission Operator have set up an SPV to prepare feasibility studies for connecting the power grids of the two nations.
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