From Gas to Green: The Tough Transition for Egypt’s Energy-Intensive Industries
Rising geopolitical tensions in the Middle East have significantly affected economies across the region, including Egypt. Surging oil and natural gas prices, coupled with global supply chain disruptions, have fueled inflation and reshaped energy strategies.
Egypt remains heavily reliant on natural gas, which provides nearly 84% of its electricity generation, compared to just 13% from renewable sources. The government aims to raise the share of renewables to 42% by 2030, a target recently revised upward to 45% by 2028. These developments have prompted many countries—especially developing economies—to prioritize energy diversification over rapid transition.
Industrial Sector: The Hardest to Decarbonize
Despite government efforts to rationalize electricity consumption in residential and commercial sectors, applying similar measures to industry remains difficult. Energy-intensive sectors such as fertilizers, iron and steel, petrochemicals, and cement depend heavily on natural gas or diesel, either as a primary energy source or as a production input. Fertilizer manufacturing, in particular, relies on natural gas as feedstock.
This dependency has sparked debate on how to encourage industries to shift toward renewable energy. “Renewable energy is a promising solution to the current crisis; however, several challenges must be addressed to maximize its potential,” said Adel Mohamed Taha, Chief Technical Advisor for Sustainability and Industrial Decarbonization at the Federation of Egyptian Industries.
Taha explained that nitrogen-based fertilizer plants use natural gas both as energy and feedstock, while iron and steel complexes require high-temperature furnaces, classifying them as energy-intensive. Meeting such thermal demands currently depends on natural gas and other fuels. He noted that if factories continue using natural gas for thermal energy but switch to renewables for electricity, their overall carbon footprint could be significantly reduced.
“This can be achieved either by sourcing renewable electricity from the national grid via power purchase agreements or by establishing direct connections with nearby solar or wind power plants,” he added.
According to a study by the Egyptian Center for Economic Studies (ECES), Egypt had about 56,694 megawatts (MW) of renewable capacity installed in 2025, while peak electricity demand reached only 36,800 MW in 2024. The challenge lies not in generation volume but in timing, location, and reliability of delivery.