Importing coal: Who pays the price?
Pictures of the coal illegally obtained by Lafarge, courtesy of Egyptians Without Coal
By JOANA SABA

CAIRO:  Egypt’s ongoing energy crisis has manifested itself in a battle over the use of coal. While the Ministry of Environment has largely protested the import of coal as an energy source for cement companies, it faces opposition from other ministries, in particular the Ministry of Industry.

Minister of Industry Mounir Fakhry Abdel Nour has repeatedly stated that coal is the most viable solution, and the companies would have to adhere to stringent measures. He has failed, however, to specify what these measures would entail. The Ministry of Environment’s studies into best practices will be concluded at the end of the month, but the powers mandated to the ministry do not allow it to make the final decision on whether to import the fuel source.

Thus far, stakeholders in cement companies maintain that coal is the cheapest energy alternative to Egypt’s current fossil fuel sources of natural gas and petroleum. The head of the Suez Cement Group, Omar Mhana, has said that the harms that resulted from the use of coal in the past are no longer relevant due to “developments in the industry.”

Egyptians Against Coal, the only movement that has appeared as a significantly vocal opponent to the importation of coal, has stated that the proposal is “haphazard” and serves only the stakeholders in the cement industry and the officials in the government who are connected to them.

It’s cheap because no-one wants it

Coal is cheap “because nobody wants it. The whole world is moving away from coal. These companies have claimed that everybody is still using coal, but they are still using figures from the early 2000s,” Ahmed el-Droubi, co-founder of the movement told The Cairo Post.

EuroStat, a website specialized in quantifying statistics in European countries, confirmed Droubi’s statistics, indicating that there were major reductions in 2008, and particularly in 2009, “when gross inland consumption of hard coal in the EU-27 reached its lowest level at 292 mega tons, 42 [percent] less than in 1990.”

Droubi stated that global cement companies’ dependency on coal has decreased from 80 percent to 72 percent.

Droubi said the costs of importing coal surpassed those of using waste-based energy in cement factories in the long and short term, due to the infrastructure changes that large-scale importation would entail.

“It’s a question of who pays what,” said Ahmed Huzzayin, a professor at the Faculty of Engineering in Cairo University. “There are externalities that have to be considered – if they implement proper pollution regulation techniques, this will require electricity, which will cost more.”

Minister of Environment Laila Iskander told Youm7 March 13 cement companies are already violating regulation standards set by the ministry. Both Droubi and Huzayyin said that citizens, not corporations, would bear the social costs of burning coal.

Lafarge coal scandal

Several media outlets reported earlier this month French cement giant Lafarge had been illegally importing coal into their factories in Alexandria. Photographs taken by Egyptians Against Coal revealed that the coal supply has been stored in the desert in the open air, without any protective barrier to prevent it from polluting the surrounding area.

Minister of Environment Laila Iskander took legislative measures against Titan Egypt Cement and the Arabic Company for Cement in Suez on Feb. 15 for illegal drilling procedures to grind coal in windmills.

According to a 2012 study from USGS, Egypt is the 11th highest producer of cement.

Furthermore, according to Egyptians Without Coal, Egypt provides subsidized electricity at a value of U.S. $240 million for cement companies.

The statement also indicates that labor wages fall severely short of those in Turkey, which ranks fifth in coal production according to USGS.

Coal vs. natural gas

Thus far, the major stakeholders have framed the argument in a binary, betting coal against Egypt’s depleting reserves of natural gas. Despite the fact that here are no heavy metal emission from natural gas, whereas coal emits lead, lithium, cadmium and arsenic, according to Droubi, gas is nonetheless being used in violation of the Ministry of Environment’s standards, as Iskander told Youm7.

The ministry has largely focused its efforts towards launching plants that rely on renewable energy, such as solar power, although both Droubi and Huzayyin said that it would be more pertinent to instead focus on alternative types of fuel, with much less harmful emissions.

Various cement factories in Egypt have already begun redirecting some of their resources towards waste-based energy.

Omar Mhana, head of the Suez Cement Group, said on March 6 that Suez Cement has already launched a waste recycling plant, which generates between 15 and 20 percent of their required energy. Shanas, Arabian Cement, Italian Cement and even Lafarge have begun a slow development of their waste plants, Droubi said.

What currently lacks is the legislative framework that would help redirect large quantities of waste to cement companies, he said, adding that in certain countries like the Netherlands, cement companies have already reached full or almost full waste-dependency.

Droubi said that changing a cement kiln to be powered by coal would cost 50 million EGP ($7.18 million), whereas it would cost as little as 10 million EGP to use waste. However, there have been no formal studies from impartial third parties.

If it’s here, it’s here to stay

Major infrastructure changes would be required to begin importing coal, said Droubi, adding that these changes could force Egypt into at least 40 years of coal dependence, and probably closer to 60.

Importing coal would not only be “deeply harmful” to the environment, he said, it would require that ports be built to sustain its importation and that factories to be readjusted to burn coal instead of fuel, among other adjustments.

Huzayyin said importing coal is not likely to reap financial benefits for another seven to 10 years. As such “it does not make sense to import coal unless it will be used for at least 20 years,” he continued.

“If it’s here, it’s here to stay,” he added.

Egypt had the sixth highest concentration of particulate matter in urban areas in a 2012 World Health Organization air pollution ranking.

Droubi and Huzayyin both said that whether the government decides to import coal, or to use waste, or to do nothing at all, Egypt will be hit by the energy crisis.

“Turning to waste-based energy will not happen in a year, and [cement companies] will take a hit from the lack of natural gas, but this cannot be avoided,” Huzayyin said.

This echoes Iskander’s statements on Friday, where she expressed condemnation of the Minister of Industry’s statement that coal would be ready for use within six months. The two ministries are at an impasse, and the final decision will be made by Prime Minister Ibrahim Mahlab, the former minister of housing.

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