By Abbas Nazil
Egypt is increasingly positioning carbon markets and carbon capture, utilisation and storage as key tools to manage rising greenhouse gas emissions while maintaining economic growth and energy security in a fossil fuel–dependent system.
While renewable energy remains central to the country’s long-term climate strategy, natural gas continues to dominate electricity generation and industrial activity, making immediate deep emissions cuts difficult.
As a result, policymakers and industry leaders are exploring emissions management mechanisms that can complement renewables rather than replace fossil fuels overnight.
Government data shows Egypt’s greenhouse gas emissions rose from about 138 million tonnes of carbon dioxide equivalent in 1990 to roughly 336 million tonnes in 2023, reflecting population growth, urbanisation and expanding industry.
Although emissions peaked around 2017 and have since stabilised slightly, the long-term upward trend remains clear.
Despite this growth, Egypt contributes less than one percent of global emissions and maintains per capita levels below the world average.
A major development came in 2024 with the launch of Africa’s first regulated voluntary carbon market under the supervision of the Financial Regulatory Authority.
By the end of that year, more than 18,000 verified carbon certificates had been registered, and by early 2025 nearly 30 projects were offering over 170,000 credits for trading.
The market currently focuses on renewable energy, sustainable agriculture and land-use projects where emissions reductions can be clearly measured and verified.
Although trading volumes remain modest, strong regulatory oversight has attracted developers and investors seeking transparency and credibility.
Egypt’s heavy reliance on natural gas has also highlighted the limits of carbon markets alone in delivering long-term emissions reductions.
This has renewed interest in CCUS as a way to separate industrial growth from emissions, particularly in sectors such as cement, fertilisers, refining and petrochemicals.
Egypt’s extensive oil and gas exploration history has produced valuable geological data, with depleted reservoirs and saline aquifers in the Western Desert and Nile Delta seen as potential carbon storage sites.
However, CCUS remains at an early stage, with no large-scale facilities and no comprehensive legal framework governing capture, transport, storage or long-term liability.
High capital costs, uncertain revenue streams and the absence of incentives continue to discourage private investment.
Experts say Egypt’s challenge is not storage potential but the lack of bankable project structures supported by clear regulation.
Regionally, Egypt occupies a middle ground between Gulf states pursuing large-scale CCUS and African countries leveraging carbon markets for climate finance.
Officials believe integrating emissions management into financial regulation could position Egypt as a regional model if transparency and standards remain strong.
While renewables and efficiency will remain the backbone of climate action, carbon markets and CCUS are expected to play an expanding supporting role.
The key question now is whether Egypt can turn these tools into practical, investable solutions aligned with national development priorities.
