{"id":556311,"date":"2021-10-19T04:11:35","date_gmt":"2021-10-19T04:11:35","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/what-would-a-green-manufacturing-future-look-like-for-africa-and-egypt\/"},"modified":"2021-10-19T04:11:35","modified_gmt":"2021-10-19T04:11:35","slug":"what-would-a-green-manufacturing-future-look-like-for-africa-and-egypt","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/what-would-a-green-manufacturing-future-look-like-for-africa-and-egypt\/","title":{"rendered":"What would a green manufacturing future look like for Africa, and Egypt?"},"content":{"rendered":"

<\/a> Can Africa\u2019s manufacturing go entirely green by 2050? Mckinsey seems to think <\/strong>so: <\/strong>With Africa\u2019s manufacturing making up only 2% of the global value-added output, there could be a unique chance for manufacturers to entirely sidestep a trajectory of carbon intensive development and avoid the costs of going green at a later stage once these industries have already been built out, according to this McKinsey & Company report (pdf)<\/a>.<\/p>\n

A USD 2 tn pipe dream, or the wave of the future? <\/strong>The report estimates that reaching net zero emissions would require a hefty USD 2 tn investment over the next three decades, with a number of long-term upsides to committing to this ambitious goal. The report points to the creation of a total 6.6 mn \u201cgreen jobs\u201d \u2014 with 3.8 mn of those being newly created \u2014 and avoiding the more costly transition to low carbon manufacturing in the future.<\/p>\n

Today, we look at the policies McKinsey recommends and how far along Egypt is in implementing them <\/strong>\u2014 especially as Egypt contributes 20% to the total manufacturing emissions of the continent, which themselves make up 30-40% of the continent\u2019s total emissions.<\/p>\n

The report outlines three broad pathways to development: <\/strong>The most ambitious net-zero scenario would ultimately reduce emissions by 90% relative to 2018 levels, which the report has soberly labeled \u201cvery difficult to achieve.\u201d<\/p>\n

Five highly polluting industries need to be reformed:<\/strong> Cement, petroleum refining, iron and steel and ammonia\u2014would have to undergo a major overhaul.<\/p>\n

Cement tops the handful of high-polluting industries,<\/strong> currently accounting for 32% of total African manufacturing emissions, and 23% of Egypt\u2019s total GHG emissions in 2015<\/a>. Decarbonizing the cement industry on the continent would require CAPEX of some USD 12 bn between 2021 and 2030, if countries stick to their current commitments under the 2015 Paris Agreement (what the report refers to as the \u201cbase case\u201d), and USD 15 bn under the net-zero route. Between 2030 and 2050, the base case costs rise to some USD 37 bn, while only inching up to USD 17 billion in the net zero scenario, meaning that costs associated with a net-zero-oriented transition would fall significantly over the long term.<\/p>\n

But what does it actually mean to decarbonize the cement industry?<\/strong> Factories could phase out their coal-based heating processes for biomass fuels, which could be complimented by utilizing carbon capture storage to offset the emissions linked to cement production \u2014 though this could lead to additional costs of some USD 35 to USD 70 per ton of cement, the report suggests. Substituting clinker, a mixture of limestone and minerals essential to the production of cement, for energetically modified cement and calcined clays could reduce CO2 emissions by 50%. Some companies in Egypt have already begun<\/a> this transition. The report also floats the idea of using cross-laminated timber in construction as an alternative to cement altogether, saying that 40% of cement demand would have to move over to timber to meet targets.<\/p>\n

How exactly are companies in Egypt adapting to the times? <\/strong>Suez Cement currently uses<\/a> low-emissions pozzolanic and limestone (blended) cement and Lafarge Egypt introduced a PZZ cement earlier this year. Otherwise only a handful of companies produce low emissions PZZ cement. Setting CO2 emissions quotas, like those outlined in Mckinsey\u2019s report, could have a much more substantial impact.<\/p>\n

When it comes to coal, however, we\u2019re still far behind.<\/strong> Some 16 of the 18 cement companies in Egypt use coal<\/a> in at least a portion of their manufacturing processes \u2014 after a number of them outfitted their facilities to run on coal in 2016 in response to the lifting of fuel subsidies. Coal consumption is expected<\/a> to expand in Egypt over the coming decade to comprise somewhere between 16 - 29%<\/a> of our energy mix by 2035, if no action is taken.<\/p>\n

Ammonia production would also have to undergo a revamp: <\/strong>The ammonia industry relies primarily on methane steam in its manufacturing process, which produces some 1.7 tons of CO2 per ton of ammonia. Otherwise, hydrogen extracted from fossil fuel and coal power ammonia production<\/a>. To reach a net zero emissions target in the next three decades the industry would have to substitute 60% of its greenhouse gas emitting energy sources for green hydrogen, and boost its carbon capture and storage capabilities by 40% before 2030.<\/p>\n

The hurdle lies in the price tag for carbon capture and storage<\/strong>, which would run companies some USD 30-40 per ton. Domestically, carbon capture has yet to reach<\/a> wide scale adoption as it is very expensive relative to other decarbonization strategies, like renewable energy development.<\/p>\n

Iron and steel manufacturing would need to undergo changes as well:<\/strong> Currently, an estimated<\/a> 1.83 tons of CO2 are emitted for every ton of steel produced. Utilizing green hydrogen in direct reduced iron (DRI) electric arc furnaces \u2014 which bypasses traditional extraction of iron from iron ore without using coal \u2014 could become the primary pathway towards zero emissions steel production. Commercial level production of this alternative is expected to become feasible by 2024, and DRI would need to replace traditional iron extraction by 2030 in order to reach that net zero target. Steel recycling also needs to see at least 45% growth by 2050. Egypt is the largest steel consumer<\/a> in the MENA region, and steel production was responsible for 1% of the country\u2019s CO2 emissions in 2015.<\/p>\n

Every other manufacturing process would have to rely on substantial developments in<\/strong> green energy<\/strong>. Solar and wind-generated power would have to be scaled up on the continent by 70% from current levels, and 95% of power would need to come from renewables by 2050 to provide for industrial operations under a net zero goal, according to the report. In Egypt, the government has set its sights<\/a> on having 42% of the country\u2019s electricity generated from renewable sources by 2035, but as of 2019 renewables only accounted for 3.4% of our energy mix.<\/p>\n

Green hydrogen is high up on the list of supplemental cross-sector strategies for meeting the net-zero target:<\/strong> Hydrogen produced using renewable energy \u2014 which by some estimates contains almost three times as much energy as fossil fuels<\/a> \u2014 must become a crucial driver of the continent\u2019s transition, and the cost of production of green hydrogen should fall to some USD 2 per kg by 2030, according to the report.<\/p>\n

Egypt is already on the road to large-scale green hydrogen production<\/strong> and could soon launch an initial phase<\/a> of projects worth some USD 3-4 bn. Taqa Arabia is among the private sector players that have already signed an MoU with German-based Man Solutions to pilot a green hydrogen project in Egypt, but we\u2019re still not at a commercial level, executive chairman of the New and Renewable Energy Authority (NREA) Mohamed El Khayat previously told us.<\/p>\n

And the cost of all this? <\/strong>That estimated USD 2 tn in additional investments the report suggests will be needed, some USD 600 bn will go to transitioning existing manufacturing industries to low carbon processes, with the remaining USD 1.4 tn going towards creating new industries that supplement or substitute cement, coal to liquids, and petroleum refining sectors. Besides funding, an immense challenge lies in getting countries to commit to these transformational strategies today, when fuel sources with no GHG emissions remain out of reach.<\/p>\n

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