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Steps following Ratification of Kigali Amendments towards a more sustainable Cooling Market in Egypt

Posted: August 31, 2023 at 7:53 pm   /   by   /   comments (0)

Authors: Dr. Norhan El Dallal, Mr. Alexander Pohl & Dr. Mohamed Salheen.

The MENA region is exceptionally vulnerable to the impacts of climate change. It is currently warming at double the global average and predicted to be 4°C warmer by mid-century. Heat waves result in 12,000 deaths annually worldwide, and these numbers will rise with the continued warming of the planet. Egypt is already affected today by climate-related hazards such as extreme temperature and droughts due to climate change. These environmental changes not only endanger crops, wildlife, and freshwater supplies but also pose a significant risk to the overall well-being and stability of communities in Egypt and beyond [1].

Space cooling and refrigeration plays an important role in protecting people in Egypt against extreme heat, preserving food and medicine, and supporting numerous industries. However, the energy consumption and emissions associated with cooling systems have become a significant concern. Traditional cooling systems rely heavily on fossil fuel-powered electricity, contributing to greenhouse gas emissions and exacerbating global warming. Additionally, commonly used cooling systems contain synthetic refrigerants which are greenhouse gases that are thousand times more potent than CO2.

Cooling already represents a major source of energy consumption and is expected to grow further due to a growing population, urbanization, and an improved standard of living. But the more we cool the more we heat the planet.

Phasing out HCFCs and phasing down HFCs are among the key actions taken by developed and developing countries to reduce the environmental impact of synthetic refrigerants through the Kigali Amendment of the Montreal Protocol. The Kigali Amendment represents an effective climate mitigation measure within easy reach and complements the commitments of the Paris Agreement. The need to act now and to translate the international ambition on climate change into faster and stronger real-world progress is more important than ever.

Egypt is committed to the Montreal Protocol and recently the Egyptian government approved the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone which focuses on phasing down the production and consumption of HFCs. The Parliament of Egypt, headed by Counsellor Dr. Hanafi Jabali, approved Presidential Resolution No. 32 of 2023 regarding the approval of the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer. On the 22nd of August, Egypt officially became the 152nd country to ratify the Kigali Amendment. 1st January 2024 will represent the time when Egypt will freeze at the baseline consumption level and start the phase-down. By 2029 Egypt is committed to reducing 10% of the HFC consumption, then in 2035 the consumption should decrease by 35%, later in 2040 a decrease by 50% is expected, until finally in 2045 the consumption will be reduced by 80%.

[1] National Adaptation Plan

The Cool Up programme which started in December 2020 runs until January 2027 promotes accelerated technological change and early implementation of the Kigali Amendment to the Montreal Protocol and Paris Agreement in Egypt, Jordan, Lebanon and Türkiye. The programme is funded by the International Climate Initiative (IKI) of the German government and is supported in Egypt by the Ministry of Environment, specifically Egyptian Environmental Affairs Agency and the National Ozone Unit. The programme is led by Guidehouse Germany and implemented in Egypt by its country partner the Integrated Development Group (IDG).  It has a cross segmental focus on commercial refrigeration and residential and commercial air conditioning. Cool Up supports Egypt in its commitment to reduce the overall cooling demand and to promote accelerated technology change towards energy efficient sustainable cooling solutions which exclusively use natural refrigerants. Sustainable cooling can be defined as affordable and safe cooling that energy efficient and has lowest possible impacts on the environment. The goal is to replace synthetic refrigerants which have high Global Warming Potential (GWP) and that are still used in refrigeration and air conditioning devices, with low GWP refrigerants representing a climate-friendly alternative.

Cooling constitutes a major source of energy consumption, and it is expected that HVAC systems account for nearly 56% of the energy used in commercial buildings in Egypt. Accordingly, almost any business has the potential to realise significant savings by improving its control of its HVAC system, whilst improving the efficiency of the systems utilised. Residential power and fuel consumption can be substantially reduced by replacing old HVAC equipment and improving the efficiency of the system.

The Cool Up project aims to accelerate the transfer of climate friendly technologies in the refrigeration and air conditioning sector and the use of natural refrigerants. Cool Up is working on designing more efficient processes, policies and encouraging cooperation between technology providers and users. One important step is bringing all relevant entities on board and creating an initial demand for the measures to support the initiation of market and industry transformation which is ensured by regular working group meetings of national experts within the Cool Up project. In parallel, making local industry associations and manufacturers aware of alternative systems and at the same time support the collaboration with international manufacturers to make components and systems locally available, is crucial. Proposals to financing institutions can provide replicable funding models and instruments and create incentives for investment in climate-friendly technologies.

Figure 1 Cool Up’s Holistic Approach

On the policy side Egypt has progressed on the commitments relevant to the Montreal Protocol through the implementation of several relevant programs, laws, and other policy instruments. The Environmental Strategic Vision 2030 and the National Climate Change Strategy 2050 (NCCS), have ambitious targets to phase out Ozone depleting materials by 2030. Egypt submitted the updated version of the NDC on June 25, 2023, with more focus on efficient cooling. In addition, the HCFC’s Phaseout Management Plan (HPMP I) has been successful implemented; Egypt will phaseout the remaining use of HCFC-141b through (HPMP II) which ends in December 2025. The Egyptian Organisation for Standards published several standards relevant to the cooling appliances such as energy efficiency label requirements for AC, standards for ducted air, standards for refrigerants compressors, and standard for compressors and condensing units for refrigeration.. The Housing and Building Research Center also published new RAC sector codes like the Egyptian code for Refrigerants and District Cooling code. Several standards, regulations and laws are in place, the levels of enforcement and implementation needs to be investigated. Egypt has a complex regulatory framework and a large number of governmental entities with varying mandates that need to be considered.  Cool Up aims to support the translation of Kigali Amendment obligations into a national implementation plan. This is carried out through different activities in the project like:

  • The support of the development of a National Cooling Plan with concrete steps to upscale sustainable cooling in appliances and refrigerants,
  • The support of development of an enforcement plan for the existing and newly developed standards and codes guarantees effecting real change in on-ground implementation of the systems,
  • The support of establishing a nodal government entity and engaging stakeholders across multiple sectors of cooling to reinforce stakeholder collaboration and define Egypt‘s priorities and objectives.
Figure 2 Cool Up: Regulatory overview in Egypt

On the finance side Egypt’s financial sector is very active and positioning itself as a frontrunner in applying sustainable finance principles. Egypt recently issued a large green bond of $750 million for large scale green projects that may include sustainable cooling and also the GEFF Programs in Egypt provide incentives for efficient cooling technologies. Cool Up plans to develop financial models to boost sustainable cooling and leverage finance to increase access to efficient, climate-friendly cooling solutions. The Cool Up programme evaluated financing approaches suitable for financing sustainable cooling options for each end-user group in Egypt. These were primarily integrated through the Cool Up network and literature on the international experience in financing energy efficiency, including the vast literature on the subject. Revolving green credits is Egypt’s most practical financing approach, followed by a positive list that is easy to implement in the commercial and residential sectors. Public sector organizations could use the public private partnership (PPP) approach for sustainable cooling projects. Besides, there is substantial scope to use the PPP approach for district cooling projects. Commercial banks can play a significant role in terms of sources of finance for the purpose. On the industry side, there is a rising demand on cooling in industrial, commercial and residential sectors especially with the current growing construction development market. The Egyptian air conditioning market witnessed moderate growth during the period 2017-2020 underpinned by rapid growth in population and rising urbanization in the country. Egypt’s government is developing 20 new fourth generation cities, which are all required to adopt district cooling systems to supply the most energy efficient cooling possible. Cool Up has published several studies including a market assessment study, a technology catalogue, and a prospects study to explain and analyse the current status of the RAC market and support eliminating inefficient cooling technologies from the market and focusing on existing stock as well as providing access to innovative and realistic technologies (cost effective and feasible) for Egypt. The project is also focusing on raising awareness and technical trainings of market key players (manufacturers, suppliers and end users) on the technical, environmental and financial benefits of sustainable cooling. Training and capacity building are highly needed to push towards the market transformation.

Figure 3 Cooling Sector Status in Egypt
Figure 4 The cooling challenge
Figure 5 Cool Up bridging worlds

The transition to a more sustainable cooling market and the shift to natural refrigerants require a commitment and enforcement from industry and from government to provide solutions. The impact that the Cool Up project is expected to achieve is to pave the way for transitioning into a more energy efficient cooling market, to create a strong network of stakeholders that are highly motivated to support the sustainable cooling transition, to provide a catalogue of available technologies, and support introduction of new financing mechanisms in the banking sector in Egypt.

If you want to learn more about the Cool Up programme, visit www.coolupprogramme.org