Egypt has expressed interest in carbon capture and storage (CCS), yet progress on the ground remains modest. Unlike some peer nations in the GCC that have launched large-scale CCS projects, our efforts are still largely in the feasibility and pilot stage.

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CCS? The CCS market covers technologies that trap CO2 from industrial processes or directly from the air and store it to prevent emissions. Capture methods include pre-combustion (removing CO2 before burning fossil fuels), post-combustion (capturing CO2 from flue gases), and direct air capture, or DAC (extracting CO2 directly from the atmosphere).

The main issue for Egypt and others continues to be cost, as the needed infrastructure and technology for CCS is both complex and expensive — often in the bns. The largest proposed project by price tag is the Pathways Alliance project in Canada, whose CSS network in Alberta would cost around USD 12 bn.

But the costs aren’t just upfront, as you also have to account for operating costs that push the cost for capturing each ton of carbon to between USD 15-120, depending on the CO2 source, according to the International Energy Agency. To make the economics more attractive, there’s also CCUS — or carbon capture, usage, and storage — which gives the captured carbon commercial use by reusing it, though uses like enhanced oil recovery are criticized as harmful to climate goals.

It’s little surprise that our wealthier Gulf neighbors have made more progress with CSS. While Egypt’s CSS achievements are limited to a few small-scale and pilot projects, alongside MoUs to develop the technology, the UAE hosts the Middle East’s first commercial-scale CCUS facility, Al Reyadah, which began operations in 2016. Alongside this project — which captures around 800k tns of CO2 annually from Emirates Steel’s Abu Dhabi plant and pipes it to Adnoc fields for enhanced oil recovery — Adnoc and other local players are also bullish on CCUS projects. Saudi Arabia can also boast operational projects and has plenty in the pipeline, including a USD 1.5 bn carbon capture and storage hub in Jubail, which is planned to store up to 9 mn tons of CO2 a year by 2027 or 2028.

REMEMBER- Egypt’s first CCS initiative was announced in 2022 by the Oil Ministry and Italian energy giant Eni, targeting storage of up to 30k tons of CO2 annually at the Meleiha field. The USD 25 mn project was part of a broader package of Eni-led schemes to use captured CO2, operating in three phases. Also in 2022, Toyota Tsusho presented a feasibility study on applying carbon capture tech at Abu Qir Fertilizers and Misr Fertilizers and Production Company (Mopco).

While there’s little happening on the CSS front at home, Egyptian players are active in the sector abroad, including a USD 2.6 bn expansion by Orascom Construction and Spain’s Tecnicas Reunidas of a power plant in Saudi Arabia that includes carbon capture.

Clarity on the role the technology should play in the country’s wider development plan is also lacking, with the National Climate Change Strategy 2050 only making one direct reference to CSS.

Egypt also lacks a clear legal framework for CCS, with no laws, protocols, or guidelines in place to directly govern project implementation or operations, according to a study (pdf) from the Oil and Gas Climate Initiative. A key regulatory uncertainty is how CO2 will be classified — as waste or as a resource — which will shape how CCS is treated under existing frameworks. The current regulatory environment remains incomplete and uncertain for CCS-specific activities, which isn’t a winning recipe for attracting investment.

Other countries have leaned on incentives to help spur the sector, with tax credits, soft loans, and grants used in the US, Canada, and the EU to encourage investment, the report highlighted. While CCS projects in Egypt are yet to get the same treatment, some effort has been made with CSS projects explicitly listed as able to receive a golden license, providing a simplified one-time approval to streamline the process of obtaining land, permits, and everything in between.

But on the plus side, there has been some movement on the capture front recently, with Mopco tapping Germany’s ThyssenKrupp in February to deploy advanced carbon capture and usage tech across its three ammonia and urea plants in Damietta, with a USD 220 mn investment. The project will strip up to 145k tons of CO2 annually from flue gas and channel it into urea production. We also found out in May that Canada-based clean tech firm Borna is also planning to invest USD 40 mn to set up a facility focused on manufacturing flare gas recovery systems, carbon separation technologies, and reinjection solutions for the Egyptian natural gas network.

The sector has also been featured recently in bilateral talks with our Mediterranean neighbour Greece, which saw the Oil Ministry sign an MoU with Greece’s Environment and Energy Ministry to collaborate on CCUS. The pair agreed to work on proposals for a carbon capture and storage regulatory framework with support from Greece’s industry knowledge and develop models for its possible application within the economy, with hopes of exporting CO2 to European markets for industrial use.

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