Reducing carbon emissions: Egypt’s project to replace and convert cars to run on natural gas

Ahmed El-gamal, Wednesday 22 Dec 2021

Environmental issues and climate change were not at the top of the Egyptian state’s priorities until a few years ago, when the government initiated a number of measures to protect the environment and reduce carbon emissions.

Cars in process for conversion from petrol to natural gas at a gas station in Cairo

The government has launched huge projects in conjunction with the increasing global concern about environmental issues and climate change.

Egypt hosted the United Nations Conference on Biological Diversity (COP14), which was held in 2018 in Sharm El-Sheikh, and has been chosen to host the Conference of Parties on Climate Change (COP27), scheduled for late 2022.

The Egyptian government has paid attention to climate issues and their impact on the environment not by just signing treaties and hosting environmental conferences, which are of course important, but also by implementing the outcomes of these events and treaties.

The government began to activate its plans to deal with climate change through several national projects and laws, which emerged through the expansion of metro networks, trains and electric cars and the preparation of the necessary infrastructure for this, as well as the establishment of smart and sustainable cities.

Egypt has also offered green bonds worth $750 million for five years at a yield of 5.25 percent, the first offering of government green bonds in the Middle East and North Africa.

Green bonds are special loans to finance projects related to climate change or the environment, as defined by the World Bank.

Egypt is also implementing projects to rationalise water use, line canals, integrate coastal zone management, and a huge project to reclaim 1.5 million feddans in the Western Desert and other governorates, which will have a significant impact in combating climate change and reducing CO2 emissions.

Converting cars to run on natural gas

Perhaps the most prominent measures regarding green transport are cooperation agreements for the manufacturing of electric cars and the completion of their associated infrastructure, as well as the national project to convert, or replace, cars to run on natural gas. This consists of two main projects, the first is replacing worn out and old cars, and the second is converting cars to run on natural gas.

Egypt is replacing cars manufactured over 20 years ago, which tend to produce high carbon emissions that increase carbon dioxide in the atmosphere.

The second part of the project involves converting gasoline-powered cars to have them run on natural gas or dual-fuel, given the high environmental and economic cost of gasoline.

This huge project targets various types of cars, including microbuses, taxis and privately owned cars. The government has said the project aims to replace 250,000 old cars with a budget of up to EGP 1.2 billion, with 3 percent interest loans to pay for the new cars in instalments over seven to 10 years.

As for converting cars to run on natural gas, the government is providing specialised centres to conduct this procedure, assuming the car in question is fit for conversion, for EGP 8,000 to EGP 12,000 ($515 to $715), which can be paid in instalments.

In 2017, the Small and Micro Enterprise Development Agency signed a contract with the Natural Gas Car Company worth EGP 7.5 million to finance the conversion project.

In an exclusive interview with Al-Ahram Weekly, Ahmed Abdel-Razzaq, who is responsible for the National Program for Car Replacement and Renewal, said that the first phase of the program has registered 36,000 eligible citizens, of whom 9,500 have received the upgraded vehicles.

Abdul-Razzaq says this falls far short of the initial target of replacing 250,000 vehicles in the first three-year phase starting January 2021, at a rate of 80,000 vehicles annually.

The failure to meet this target is due to weak supply chains affected by the COVID-19 pandemic as well as the global shortage in microchips, which are used in electronic circuits found in all modern cars, Abdul-Razzaq said.

Abdul-Razzaq pointed out that the rate of cars delivered as part of the replacement program is expected to increase over the next two years after the electronic chip crisis eases and foreign trade improves.

Abdul-Razzaq also said that despite the huge cost of replacement and conversion, these measures are expected to spare the state budget the cost of subsidising gasoline and petroleum.

The price of a cubic meter of natural gas is EGP 3.5, while the price of a litre of 80, 92 and 95 octane gasoline is EGP 7, 8.25 and 9.25 respectively.

According to Abdel-Razzaq, Egypt was one of the first countries in the region to switch to green transportation, when in 2008 it launched the project to replace its old taxis with the new white taxi that run on natural gas or dual fuel. Egypt replaced 45,000 taxis and won a grant of 2.5 million euros from the World Bank in recognition of its achievements in reducing carbon emissions.

This gigantic national project is in line with the sustainable development goals of the United Nations, Abdel-Razzaq said, adding that the national sustainable development strategy Egypt Vision 2030 aims to achieve sustainable development and tackle environmental challenges, especially climate change.

The fuel conversion project aims to reduce harmful carbon emissions as well as bring about economic benefits by stimulating trade in the automobile sector and the banking sector, which financed the program. The project should also reduce the financial burden on citizens by using a safe, clean and affordable alternative like natural gas.

Abdel-Razzaq says the replacement process began in seven governorates as a first stage, which are the governorates that have the appropriate infrastructure to convert cars. This has involved the participation of many agencies and companies, including the ministries of finance, interior, environment and planning, as well as a number of car manufacturers, importers of natural gas-powered cars, and 31 banks.

Achieving ‘carbon neutrality’

Magdi Allam, secretary-general of the Union of Arab Environmental Experts, said in an exclusive interview with Al-Ahram Weekly that carbon emissions from natural gas are much lower than from fossil fuels, while electric cars produce no carbon emissions.

Allam explained that Egypt is also working on manufacturing electric cars at the Nasr Automobile Factory as part of its relentless efforts to reduce carbon emissions.

The environmental expert pointed out that Egypt’s efforts to support green transport will reduce carbon emissions by 42 percent, which will be a good step towards reaching carbon neutrality.

A report issued by the cabinet of Egypt indicated that the number of cars converted to work with natural gas during the 5 years, which increased by 49.3 percent, to reach 339,000 cars by the end of 2020, and this number is increasing with the activation of the initiative to convert cars to work with natural gas and the stimulus package provided by the government to the citizens in this regard.

The report said that the government launched a mobile phone application called MOP Station, which is used to locate natural gas refuelling stations and the centres for converting vehicles to run on natural gas.

The report emphasised that the use of natural gas as a fuel is very safe, non-toxic, free from lead compounds and sulphur impurities, and is better from an environmental point of view. The US Environmental Protection Agency has announced that reliance on natural gas guarantees 90 to 97 percent lower emissions of carbon monoxide and 25 percent lower carbon dioxide emissions.

The report also cited the UN Economic Commission for Europe as saying that natural gas reduces nitrogen oxide emissions by about 80 percent compared to gasoline and diesel. The International Gas Union has also said that the use of gas contributes to improving air quality compared to gasoline, as it reduces heat emissions by 20 percent.

The report also cited British magazine The Economist praising Egypt's ambitious plan to use natural gas in cars. Bloomberg has also said that the Egyptian project is a serious step to encourage the conversion of up to 1.3 million car owners to use natural gas.

Egypt has one of the oldest experiences in the world in using natural gas, as it was the first in the Arab world to use the fuel in the transportation sector, according to the UN Economic and Social Commission for Western Asia.

Abdel-Razzaq says that Egypt’s conversion of 45,000 taxis to run on natural gas from 2008 to 2012 won it a special award from the World Bank in recognition of its success in reducing emissions.

The cabinet report says that the project works to reduce the cost of environmental deterioration due to air pollution, which costs EGP 47 billion annually, in addition to reducing between 46 percent to 99 percent of carbon emissions.

The total number of natural gas car refuelling stations nationwide reached 225 by the end of 2020, and there is a plan to double the number of these stations.

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