{"id":676968,"date":"2025-12-09T00:00:00","date_gmt":"2025-12-09T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/govt-expands-alternative-fuel-production-as-demand-accelerates\/"},"modified":"2025-12-09T00:00:00","modified_gmt":"2025-12-09T00:00:00","slug":"govt-expands-alternative-fuel-production-as-demand-accelerates","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/govt-expands-alternative-fuel-production-as-demand-accelerates\/","title":{"rendered":"Gov\u2019t expands alternative-fuel production as demand accelerates"},"content":{"rendered":"

T<\/strong>he Environment Ministry has drawn up a plan to localize the production of <\/strong>alternative fuels from agricultural and industrial waste<\/strong> amid offers from Chinese and Gulf companies looking to enter the sector, sources told EnterpriseAM. Work is currently underway to expand the number of refuse-derived fuel (RDF) and biomass plants to recycle Egypt\u2019s annual waste stream \u2014 which includes 25 mn tons of municipal solid waste \u2014 with the goal of supplying energy-intensive industries, such as cement.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

Market watchers say local demand for RDF continues to climb<\/strong> as cement producers increase their mandated RDF usage rates to counter higher fuel prices \u2014 and to meet environmental compliance standards for exports. The result: a widening supply gap and heightened competition for feedstock.<\/p>\n

The Madbouly government is now exploring new potential investments in the production <\/strong>of RDF, biomass (agricultural waste), and pulp-based fuel from industrial waste. <\/strong>Official data points to a growing market, with the country now housing around 35 recycling facilities producing RDF, with a total annual output of up to 1.4 mn tons, according to Environment Minister Yasmine Fouad. Meanwhile, 19 out of 24 cement factories have completed environmental correction plans to raise their share of alternative fuels in the energy mix, she added.<\/p>\n

T<\/strong>he ministry\u2019s push to increase the use of RDF in energy-intensive industries has driven <\/strong>a wave of private-sector expansion<\/strong>, a senior government source told EnterpriseAM. RDF output reached 1.4 mn tons last year, up from 850k tons in 2023, while the number of private producers rose to 22 after the tariff was revised to make the sector more attractive. Improvements in waste-collection and treatment systems have also resolved bottlenecks that previously discouraged companies from entering the market.<\/p>\n

REMEMBER-<\/strong> A government source told EnterpriseAM earlier this year<\/a> that steel and petrochemical plants have joined cement factories in using alternative fuel as an energy source, with the mandatory share of clean fuel revised from 10% to 15%. Furthermore, some cement factories are exceeding this percentage due to rising energy prices. Glass, metal, and aluminum industries will also join the system soon.<\/p>\n

Egypt collects some 100 mn tons of waste annually, but only 37% is currently recycled<\/strong>, the source said. The government aims to raise this gradually to 60% by 2027, driven by greater private-sector participation and a global shift toward low-emissions energy sources.<\/p>\n

But the private sector sees challenges<\/strong>, including the government largely having stopped issuing new waste-collection and processing licenses due to rising costs, leaving only a handful of licensed facilities operating, recycling and alternative fuels firm BioEnergy<\/a> CEO Mohamed Omar Barakat told EnterpriseAM. Many companies have exited the market or scaled back production, even as industries increase their demand for alternative fuel to cut costs and comply with cement-sector clean-fuel mandates.<\/p>\n

This retreat in government financial and project support is affecting production levels<\/strong>, said waste management firm Ecaru<\/a> Project Director Mahmoud El Saeed Ali. Without adequate compensation from the state or new project tenders, companies may reduce RDF output and shift toward alternative products to offset losses.<\/p>\n

S<\/strong>ector players recently met with Deputy Prime Minister of Industrial Development Kamel <\/strong>El Wazir, who rejected requests to open the door for RDF exports<\/strong>, citing the need to prioritize the needs of the local market. Barakat and El Saeed added that stronger demand from cement producers \u2014 especially those seeking to meet European environmental requirements \u2014 has already prompted some factories to request permission to import RDF, which could unlock up to USD 50 per ton in international support. <\/p>\n

Why not expand production to match demand?<\/strong> Barakat and El Saeed argue that the investment return remains low. Factory leases from governorates can run up to EGP 10 mn per year, while RDF prices are constrained by their connection to imported coal and global fuel movements, keeping the selling price between EGP 1.5k-2k per ton. Cement companies also wield significant pricing power over producers. Energy makes up 60% of cement production costs, El Saeed noted, incentivizing cement manufacturers to cut their own costs \u2014 sometimes by leasing municipal RDF plants and producing only the quantity required for compliance.<\/p>\n

Barakat warned that the lack of new licensing rounds has opened space for an informal, <\/strong>lower-quality production tier that undercuts formal players <\/strong>on price and impacts sector standards. El Saeed added that governorates have shifted from tenders to auctions for waste-processing contracts, limiting participation to large companies at high prices \u2014 a move that restricts competition. Despite these challenges, RDF still sells at low market prices, while production costs keep rising as quantities shrink.<\/p>\n

T<\/strong>he government is moving to revise the waste-to-energy tariff and raise RDF quality <\/strong>standards <\/strong>to boost the calorific value delivered to energy-intensive industries, aiming to lower emissions, expand formal-sector production, and create a more stable, investible alternative-fuel ecosystem in Egypt, government sources told EnterpriseAM.<\/p>\n

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