In a statement, the Ministry of Local Development and Environment said the new system will create a national environmental database for industrial facilities, covering emissions, fuel, water and energy use, waste data and export-related information linked to the European Union’s Carbon Border Adjustment Mechanism (CBAM).

Minister Manal Awad said the platform is designed to simplify registration and reporting procedures for industrial facilities and connect relevant government bodies through one digital portal, including the Egyptian Environmental Affairs Agency, the Ministry of Industry, the Industrial Development Authority and the Ministry of Electricity.

She said the registry would help the government prepare detailed reports on fuel use across industrial sectors, identify non-compliant facilities and track emissions reductions resulting from environmental compliance plans.

The system will also enable authorities to calculate and monitor carbon emissions, including direct emissions from fuel and industrial processes, indirect emissions from electricity consumption and embedded emissions in exported products.

Industry Minister Khaled Hashem said the platform represents an important step toward accelerating the green transition in Egypt’s industrial sector and improving the competitiveness of Egyptian exports amid growing global requirements to reduce carbon emissions.

He said the digital link between the Industrial Development Authority and the environmental regulator marks a shift in industrial and environmental data management through interactive maps and sectoral and geographic analysis to support planning and decision-making.

The ministry said the new industrial environmental registry focuses on reducing emissions inside facilities and production lines, improving water and energy efficiency, and monitoring production inputs, including raw materials and intermediate goods.

Further development phases will link the platform to inspection and violation systems, interactive maps and other government bodies, including the Waste Management Regulatory Authority, the Ministry of Investment and the General Organization for Export and Import Control.

The meeting also discussed preparing a regulatory decision to require industrial facilities to register and update their data regularly, as well as possible incentives for compliant facilities.

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The discussions addressed key challenges facing the mining industries sector, including the need to increase value-added production, reduce carbon emissions in line with Carbon Border Adjustment Mechanism (CBAM) requirements, and expand the use of alternative fuels such as refuse-derived fuel (RDF), which remains limited due to quality concerns in the domestic market.

Participants also highlighted constraints related to mineral exploration licences, notably their short one-year duration and the limited areas allocated for exploration.

At the outset, Hashem said the mining sector holds strong potential to attract new investments, generate higher value-added output, and support local manufacturing as part of efforts to reduce imports and boost exports.

He noted that the ministry is placing increasing emphasis on CBAM compliance to enhance the competitiveness of Egyptian companies and improve their access to European and global markets. He also pointed to ongoing coordination between the ministries of Industry, Local Development, and Environment to establish an environmental registry for measuring, reviewing, and verifying carbon emissions across industrial activities.

Hashem underlined broader efforts to advance the transition towards a green economy and improve industrial efficiency, particularly amid ongoing global energy challenges. In this context, he revealed that the ministry is working with the ministries of Electricity and Renewable Energy and Petroleum and Mineral Resources to develop energy maps for industrial zones, identifying the most suitable renewable energy sources—such as solar and wind—for each area to reduce reliance on the national grid.

The minister also stressed the importance of expanding the role of energy service companies (ESCOs) in auditing factory energy consumption and recommending efficiency improvements. He added that the government is moving to enable the private sector to develop, install, and operate renewable energy systems within industrial zones.

On alternative fuels, Hashem said the ministry will coordinate with relevant authorities to diversify fuel sources used in cement and other energy-intensive industries. He also affirmed the ministry’s readiness to provide technical and research support to the Petroleum and Mining Chamber through the Mining and Marble Technology Center.

For his part, El-Sewedy highlighted the role of the Environmental Compliance Office affiliated with FEI, noting that it offers a range of services, including a revolving loan programme to finance industrial firms, access to environmentally compliant technologies, energy efficiency solutions, renewable energy applications, and waste management systems. These efforts, he said, aim to support the industrial sector in meeting Egypt’s sustainable development goals.

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El-Lethey noted that the mechanism—aimed at preventing carbon leakage—affects industries making up 33% of GDP that rely on natural gas for 81% of energy. “Without action, losses could hit $1.2-1.8 billion annually from 8-12% cost increases,” he told reporters, citing aluminium (78% EU-directed, $1.8 billion), cement (1.2 million tonnes a year as EU’s No. 2 supplier) and fertilisers ($4.5 billion last year toward $11 billion target).

Such pressures threaten jobs in production centres like Nag Hammadi, Helwan and 10th of Ramadan City, with ripple effects on supply chains, El-Lethey added. But he pointed to upsides: domestic carbon taxes creditable against CBAM could cut net costs 25%, while opening $3-5 billion green financing from World Bank ($700 million pledged) and EBRD, leveraging Benban solar park (1.8 GW) and Gulf of Suez wind farms.

El-Lethey outlined nine interconnected strategies—four government pillars supporting five industry tactics under MRV frameworks—for full 2026 compliance. “This creates a virtuous cycle of savings, resilience and leadership in MENA green exports, up 25% by 2030,” he said.

Government pillars

He called for immediate EU negotiations to extend transitional periods to 2028 and launch a national carbon market covering 50 million tonnes of emissions yearly, generating $800 million savings. A parallel $15 billion push would raise renewables to 42% of energy mix by 2030 via Suez expansions, reducing industrial emissions 25%.

Capacity building would train 10,000 engineers in MRV, with 35% tax incentives for 300 priority factories. A $2 billion sovereign green fund at 4% interest rates would mobilise FDI and public-private partnerships for retrofits.

Industry tactics

El-Lethey detailed rapid CCS rollout in cement and steel for 22% emissions cuts within 18 months, financed by green banks. Firms should shift to blue hydrogen from gas reserves, cutting costs 15% and enabling CBAM certificates.

Supply chain alliances with solar farms would shrink footprints 18%, he said, while diversifying 20% of exports to Asia and Africa via Environmental Product Declaration (EPD) and ISO 14067 certifications draws $2 billion FDI. Advanced digital MRV platforms would ensure real-time reporting, avoiding €100/tonne penalties.

“CBAM shifts from threat to opportunity when executed cohesively,” El-Lethey said. “Egypt can redefine its industry, protect livelihoods and lead the global green economy.”

Mohamed El-Lethey is an International Quality and Sustainability Consultant with extensive expertise in developing and auditing management systems across industries. As a Certified Lead Auditor in ISO 42001, 9001, 27001, 14001, 45001, and 50001 standards and a Six Sigma Black Belt, he aids organizations in achieving world-class standards in quality, environmental performance, and sustainable business practices.

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Heiba announced that several solar panel factories are scheduled to start operations in the first quarter of 2026, adding that Egypt is expected to witness a renewable energy boom over the next two years.

Heiba highlighted the government’s efforts to stimulate renewable energy investment, including the approval of a new law that provides incentives for green hydrogen projects and their derivatives. He noted that GAFI has made “environmental protection” a core criterion for awarding investment incentives across all sectors — the more sustainable a project, the greater the benefits it receives.

“For example, manufacturers of electric vehicles receive higher incentives than producers of conventional, fossil-fuel cars,” he explained.

Heiba added that GAFI is actively raising awareness about environmental sustainability within Egypt’s business community. In cooperation with other government entities, the Authority has organized awareness workshops on the EU’s Carbon Border Adjustment Mechanism (CBAM) — which will take effect in 2026 — to help Egyptian exporters prepare for the new regulations aimed at reducing the carbon footprint of imports into the EU.

The GAFI chief noted that the Authority has succeeded in attracting major European and Chinese investments in renewable energy, particularly those that help reduce the carbon footprint of Egyptian industries. Renewable energy, he said, remains a top priority in Egypt’s investment promotion strategy.

Through its Egypt Entrepreneurship and Innovation Center (EEIC), GAFI is also encouraging startups to develop eco-friendly technologies and green solutions, supporting Egypt’s long-term sustainability goals.

Heiba called on Egypt’s business community and academic institutions to strengthen collaboration and take advantage of the country’s recent accession to the EU’s Horizon Europe research and innovation program, announced during President Abdel Fattah Al-Sisi’s participation in the first Egypt-EU Summit last month.

Under Horizon Europe, Egyptian institutions gain access to the same funding and research opportunities as their European counterparts, particularly in fields such as water management, sustainable agriculture, and food security — areas that directly benefit environmentally responsible sectors.

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El-Shimy underscored the ministry’s strong focus on the CBAM, which the EU plans to implement on imports from non-member states. He noted that the mechanism will have a direct impact on the competitiveness of Egyptian exports, particularly in high-emission industries such as aluminium, fertilisers, and cement.

He explained that a comprehensive implementation plan has been developed in coordination with relevant authorities to ensure that companies are fully prepared to meet European requirements. This plan includes awareness programmes to familiarise employees with the technical and regulatory standards, as well as to highlight the potential implications for industrial performance and export operations.

The minister stressed the importance of regular carbon emission monitoring and of enhancing environmental and production efficiency. He added that specialised task forces have been formed within companies to prepare carbon footprint reports in line with international standards. Additionally, workshops on carbon markets and green financing mechanisms are being organised to support Egypt’s transition towards a green economy and sustainable development.

As part of these efforts, Kima Aswan is implementing advanced projects aimed at reducing emissions and improving energy efficiency. These include the KIMA 3 project for nitric acid and ammonium nitrate production; a feasibility study to establish a solar power plant to meet part of its clean energy needs; and a project to capture surplus carbon dioxide through a new liquefaction unit for industrial use. The company is also conducting a comprehensive carbon footprint assessment and working to integrate older production lines with newer ones to enhance operational efficiency and reduce energy consumption.

Similarly, Egyptalum continues to advance its decarbonisation plans and strengthen its export capacity. In March 2025, the company signed a long-term power purchase agreement with Norway’s Scatec to establish a solar power plant that will supply the Nagaa Hammadi complex—one of Egypt’s largest renewable energy projects in the industrial sector. Egyptalum has also obtained the ASI Performance Standard V3 certification, reaffirming its commitment to the highest environmental, social, and governance (ESG) standards.

El-Shimy emphasised that these initiatives are part of the ministry’s broader strategy aligned with Egypt’s national vision for green transformation. The goal, he said, is to boost the competitiveness of state-owned companies’ products in European and global markets, expand the use of renewable energy, reduce industrial emissions, and strengthen sustainability and environmental governance across the public enterprise sector.

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The meeting, held during the Global Gateway Forum in Brussels, focused on the Egyptian government’s efforts to enhance the competitiveness of its exports, improve energy efficiency in the industrial sector, and advance the green transition in light of the new mechanism.

Al-Mashat affirmed the close cooperation with the European Union as a key development partner, with economic relations spanning decades. She explained that Egypt’s new national economic narrative, which targets a model focused on productive sectors, also includes policies to mitigate the impact of the CBAM on Egyptian exports.

The ministry is coordinating with various international institutions to provide technical support, grants, and concessional financing to reduce carbon emissions in industry and promote the green transition, she said.

Al-Mashat noted that through the Green Sustainable Industries (GSI) programme, development partners have provided €271m to reduce pollution in the industrial sector, encourage the use of renewable energy, and develop sustainable industrial practices.

She also reviewed the partnership with the European Bank for Reconstruction and Development’s (EBRD) Green Climate Fund (GCF) to leverage concessional financing and grants for the private sector, which she said enhances Egypt’s position as a strategic partner for the EU in green energy and supports competitiveness and exports.

The minister also outlined Egypt’s green transition efforts through the “NWFE” national platform for mobilising climate investments in the water, food, and energy sectors, which aims to accelerate the implementation of the National Climate Change Strategy 2050.

The meeting was attended by Ahmed Abou Zeid, Egypt’s ambassador to Belgium, Luxembourg, the European Union, and NATO.

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During the meeting, Deputy Prime Minister for Industrial Development and Minister of Industry and Transport Kamel Al-Wazir presented a detailed update on the implementation of the CBAM general plan, which was approved by the Cabinet in December 2024. He noted that work is currently underway to finalise sectoral plans and establish specific targets and timelines. This includes comprehensive studies of global markets for the products of targeted sectors, supported by marketing studies in collaboration with foreign trade offices and export councils.

Al-Wazir highlighted ongoing efforts to identify priority economic sectors for carbon footprint reduction in the first phase, focusing on improving energy efficiency within the industrial sector. He also detailed the criteria being set to select exporting companies and factories that will receive financial support to modernise and green their production lines.

A guide is being prepared to familiarise exporters and investors with the environmental standards required for exports, aiming to attract green financing for eligible companies. Additionally, an environmental registry for industrial firms is being developed to support monitoring and compliance efforts.

Al-Wazir described a range of measures currently being implemented to cut emissions in the industrial sector, which form the backbone of the CBAM plan. These include carbon footprint and emissions measurement reports, monitoring, reporting and verification (MRV) systems, verification and certification procedures, and support mechanisms to help companies reduce emissions.

He noted that the Egyptian Organization for Standardization and Quality has been accredited by the National Accreditation Council, which is recognised by the European co-operation for Accreditation (EA), qualifying it as an official verification and certification body.

As part of the CBAM roadmap, Al-Wazir explained, work is progressing on developing an electronic system to measure pollutants and record carbon emissions, along with establishing a national MRV system. The plan also focuses on raising environmental awareness among companies and directing their investments towards lowering carbon footprints, in line with sustainability and environmental governance standards.

Further measures include providing technical support and green financing to industrial firms, helping them enter new export markets and strengthen their global competitiveness.

Al-Wazir also announced the formation of a permanent committee within the General Authority for Investment and Free Zones to oversee efforts to reduce carbon emissions. This committee is responsible for designing awareness programmes for businesses on carbon-related challenges and opportunities, exploring investment in renewable energy, and conducting field visits to assess the readiness of factories and production lines.

In a related meeting on Monday, Madbouly reviewed broader efforts to support and localise industry in Egypt. He reaffirmed the government’s commitment to developing national industry as a cornerstone of sustainable economic development. This includes improving the business climate, simplifying procedures for local and foreign investors, fostering innovation and technological adoption in industry, and implementing plans to deepen domestic manufacturing across various sectors.

Cabinet Spokesperson Mohamed Al-Homsany stated that the meeting discussed a series of measures to support industry and address existing challenges. It also covered plans to create an integrated industrial environment that enhances production efficiency and quality, and aligns with international competitiveness standards.

Al-Homsany added that discussions also touched on ongoing efforts to localise and deepen national industry to achieve economic growth, greater self-sufficiency, and reduced reliance on imports, in line with the goals of Egypt’s National Industry Strategy 2030. The meeting further addressed government initiatives aimed at attracting investment into the industrial sector across multiple fields.

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The Saturday assembly, which was attended by Egypt’s Minister of Petroleum and Mineral Resources Karim Badawi viavideo conference, also outlined the company’s ambitious green expansion plans.

The meeting was chaired by Ahmed Mahmoud, Chairperson of the Board of Directors, and was also attended by Ibrahim Maki, Chairperson of the Egyptian Petrochemicals Holding Company (ECHEM); Yassin Mohamed, Chairperson of the Egyptian Natural Gas Holding Company (EGAS); representatives of shareholders including the Saudi Egyptian Investment Company, Alfa Oryx Limited, and the Arab Petroleum Investments Corporation (APICORP); as well as representatives from the public offering.

Mahmoud, the MOPCO Chairperson, emphasised the company’s success in achieving its targeted production plan in the first half of 2024, with sales exceeding the target by 100% for urea, reaching 943,000 tonnes, and by 138% for ammonia.

The company supplies approximately 30% of the local market’s urea fertiliser needs and 60% of its ammonia needs, with the remaining production exported to various international markets, primarily Europe for urea, followed by the Americas and Asia.

Mahmoud outlined the company’s three-year plan, which includes new green economy projects. The plan focuses on reducing the carbon footprint through the development of green transformation at the company’s factories, adding new products, and entering into partnerships with attractive economic returns.

He explained that MOPCO successfully completed the construction of a new production unit this year, adding a new product with a capacity of 20,000 tonnes per year of Adblue, a 32.5% urea solution. Global demand for this product is rising as it reduces harmful emissions from diesel engines. The company has already exported its first shipment of the product to European markets, with a quantity of 36 tonnes and a price of $195 per tonne. This represents a 200% increase in the export price per tonne of urea.

Mahmoud also highlighted the company’s plans for two new projects: a green ammonia production project with a capacity of 150,000 tonnes per year in partnership with Scatec, for which the shareholder agreement and basic principles have been signed with major global companies for the purchase and marketing of green ammonia, and a melamine production project with a capacity of 42,000 tonnes per year, for which the detailed feasibility study has been completed and negotiations are underway to sign a marketing agreement for 30,000 tonnes.

He also mentioned the project to build a carbon dioxide recovery unit to comply with the requirements of the EU’sCarbon Border Adjustment Mechanism (CBAM) and the European market. Additionally, he noted that the company is considering joining other projects with economic returns, such as silicon and soda ash production projects in the NewAlamein City, methanol derivatives projects in Damietta, and a natural gas pipeline manufacturing plant for EGAS.

During the meeting, Badawi emphasised the importance of implementing MOPCO’s expansion plan, which includes several new projects. One of the key projects is the reduction of emissions, which represents a positive development in the field of green production.

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While CBAM might initially seem like a threat to Egypt’s export-dependent economy, it actually offers a unique chance for the country to accelerate its transition to a sustainable and competitive future.

Understanding CBAM

CBAM aims to level the playing field by ensuring that imported goods are subject to the same carbon costs as products manufactured within the EU.

This move is intended to prevent carbon leakage, where companies relocate production to countries with looser climate regulations to evade costs associated with carbon emissions. The mechanism will apply to high-emission sectors such as steel, cement, and fertilisers, with the scope expected to broaden in the coming years.

Egypt’s Vulnerability and Opportunity

Egypt, with its significant exports to the EU, particularly in industrial products, could face increased costs and competitiveness challenges under CBAM. However, this policy also presents an opportunity for Egypt to enhance its environmental standards and pivot towards a low-carbon economy. By investing in cleaner technologies and sustainable practices, Egypt can not only comply with CBAM requirements but also position itself as a leader in sustainable production.

Steps Towards Adaptation

To turn CBAM from a threat into an opportunity, Egypt needs to take proactive steps:

1. Adopting Green Technologies: Egyptian industries need to invest in advanced technologies that reduce carbon emissions. This includes upgrading machinery, adopting energy-efficient processes, and transitioning to renewable energy sources.
2. Government Support and Policies: The Egyptian government can play a pivotal role by implementing supportive policies and providing incentives for businesses to go green. Subsidies for renewable energy projects, tax breaks for sustainable practices, and support for research and development in green technologies can drive this transition.
3. Strengthening Industry Standards: By aligning local industry standards with international benchmarks, Egypt can ensure its products remain competitive in the global market. This includes adhering to environmental regulations, obtaining certifications, and fostering transparency in carbon reporting.
4. Capacity Building and Training: To successfully navigate the CBAM landscape, Egyptian businesses and workers need to be equipped with the necessary skills and knowledge. Investing in training programmes and capacity-building initiatives will ensure a smooth transition to sustainable practices.
5. Leveraging International Support: Egypt can tap into international funding and expertise, such as the Green Climate Fund (GCF) and partnerships with organisations like UNIDO, to finance and implement green projects. Collaborative efforts can accelerate the adoption of low-carbon technologies and infrastructure.

Economic and Environmental Benefits

Embracing CBAM compliance can yield significant benefits for Egypt. Environmentally, reducing carbon emissions aligns with global climate goals and contributes to mitigating the impacts of climate change. Economically, green technologies and practices can lead to cost savings in the long run, open up new markets for green products, and attract foreign investment.

While CBAM may initially appear as a challenge for Egypt’s industries, it offers a golden opportunity to transform threats into strengths. By adopting sustainable practices, investing in green technologies, and leveraging international support, Egypt can not only meet the requirements of CBAM but also lead the way in the global transition towards a greener economy. This proactive approach will secure Egypt’s place in the future of international trade and contribute to the global effort against climate change.

Dr Karim Morsy is an Advisor to Egypt’s Minister of Environment.

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