With the increasing pressure of a chronic energy crisis and a growing shortage in the natural gas supply, importing coal as an alternative source of energy has been debated for months now. Regardless of Minister of Industry and Investment Mounir Fakhry Abdel-Nour's recent announcement that Egypt's cement companies could use coal as an alternative source of energy as early as September, the cabinet has now said that the government is moving towards developing an energy mix for use in the industry, including renewable energy, refuse-derived fuel (RDF) and agricultural waste. Minister of Environmental Affairs Laila Iskander has said that the energy shortage and the industry's demands cannot justify the turn to coal, the most polluting fuel of all. Coal was unlikely to get the necessary environmental supervision under the lax environmental regulations in Egypt, she added. Ahmed Al-Droubi, coordinator of Egyptians against Coal, a pressure group opposed to the idea of expanding the use of coal for energy, said that the government had not yet reached a final decision with regard to importing coal. However, foreign cement companies operating in the country have been proceeding as though they had received consent to use coal as an alternative to natural gas and diesel and have started to alter their infrastructure to consume coal, he said. The government has been cutting back on natural gas supplies to energy-intensive industries for months now in favour of household consumption, forcing plants to use more diesel and RDF. “The cement companies are undermining the sovereignty of the state and ignoring the best interests of the Egyptian people,” Al-Droubi said, adding that the industry had been lobbying the government in order to get permission to use coal, a fuel that was gradually being phased out in developed countries. Coal contaminates everything it comes into contact with and creates problems throughout its life cycle. By far the biggest problem of using coal in industry is the enormous amount of carbon dioxide emitted, however. According to the United States Environmental Protection Agency (EPA), coal contributes 31 per cent of all carbon dioxide, the largest of any source of greenhouse gases, and it is the largest contributor to global warming. People who support the use of coal to generate energy for industry say that it is a necessary evil, however, since coal is the only source of energy within reach that can keep up with the enormous need for energy. However, this argument scarcely applies to Egypt, since the country would have to import the coal it needs for increased utilisation. “Supporters of the change to coal allege that using coal is much cheaper compared to resorting to renewable energy, but the real price will be paid from the health, environment, agriculture and tourism budgets,” Al-Droubi said. “The EU pays an estimated 43 million euros annually on health bills as a result of using coal. We have to take into consideration that European environmental standards are also highly enforced compared to the lax environmental regulations in Egypt, which Abdel-Nour claims will control the transition to coal,” Al-Droubi commented. He argued that recent increases in cement prices had been used by manufacturers to blackmail the government into agreeing to import more coal despite the huge risks in the long term. The country's Consumer Protection Agency announced last week that the current increase in cement prices, from LE800 to LE850 per ton, was not the result of a true shortage, but was a means to influence the decision to import more coal. Industry representatives have repeatedly said that the production of cement declined by 15 to 20 per cent in recent months due to shortages in the gas supply needed for energy. “The cement companies, mostly owned by foreign investors, are threatening to withdraw their investments from Egypt, making handy use of the government's confusion,” Al-Droubi said. For years the cement industry has benefited from investors' incentives, such as low-priced electricity and gas supplies, a low-cost work force, cheap raw materials and quarries, and tax facilities. The industry is responsible for 1.5 per cent of the country's GDP, employs about 21,000 workers, and consumes nine per cent of Egypt's energy resources. “The industry sells cement at global prices and gains enormous profit margins,” Al-Droubi said adding that “even if the government agreed to import coal, the industry would probably demand custom exemptions on imports.” The ministry of petroleum has allowed cement and other energy-intensive industries to import natural gas in order to support production, but the industry has still chosen to use coal. “Importing gas at international prices of $12, compared to $6 for local gas supplied by the government, would surely put pressure on their profit margins,” Al-Droubi commented. Many factories meet 20 to 70 per cent of their energy requirements from alternative fuels and choose to rely on refuse-derived fuel for 30 per cent of their energy needs, with the government supplying 20 per cent of their need for gas. Al-Droubi said that the industry had faced difficulties when investors had wanted to build RDF plants in order to find more sustainable sources of energy, as municipal regulations permitted leasing garbage dumps and sanitary landfills for five years only whereas they would need at least ten-year leases. “The cement industry could have pushed for amendments in the municipalities law to have 10-year leases instead of five, and this would have been easier and more sustainable than their current campaign to import coal,” Al-Droubi said. “It would have solved the energy problem and the garbage problem, injected new investments, created jobs and preserved the environment. There is also the problem of the efficiency of the cement plants in Egypt compared to in other producing countries. While other countries have managed to be efficient in using less fuel and energy in production, the local cement companies have not felt the need to develop and apply simple and cheap technologies to increase fuel efficiency,” he added. In 2009, Cyprus consumed 140 kg of oil equivalent to manufacture one ton of cement, whereas in 2013 it needed 90 kg of oil equivalent to manufacture one ton of the same material, compared to 122 kg of oil equivalent in Egypt and 58 kg in Greece. “They updated their technology in the interest of efficiency,” Al-Droubi commented. “Eventually we will be importing coal as we are importing wheat now, except that we don't have the hard currency to sustain both. We aren't even sure of the amount of coal that will need to be imported, as it may range between 6.6 and 8.5 million tons at the cost of $1 billion annually.” “This will not be a temporary solution, as changing the infrastructure to use coal instead of gas is costly. One furnace costs LE150 million, in addition to the other costs of transportation, storage, preparation, and rinsing the coal before use. There are also the costs of the railway that will carry the coal during shipment and developing the port infrastructure to receive coal shipments and so on,” he added. Any increase in coal imports would further dampen efforts to change over to renewable energy, he said. “If the cost of generating energy from coal increased by 13 per cent from 2008 to 2013, by comparison the cost of generating energy from solar power declined by 80 per cent. If we change to coal now, we will miss out on the chance of developing new, cheaper and sustainable sources of energy,” Al-Droubi concluded.
