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Egypt's energy sector is undergoing significant change, fueled by ambitious national plans and strategic partnerships with global entities.
The country is well positioned to balance the need for energy security with its commitment to achieve sustainable development and address climate change.
Egypt is demonstrating its potential to achieve low carbon development pathways through initiatives such as Nexus of Water, Food, and Energy (NWFE) Program, and the National Climate Change Strategy (NCCS) 2050, as well as the announcement of the regulated voluntary carbon market (Africarbonex), and gazetted regulatory standards for mandatory Environmental, Social, and Governance (ESG) reporting.
Egypt’s strategic geopolitical location and abundant renewable resources position the country as a potential regional energy hub. The focus on green hydrogen production as well as proactive approaches to capitalize on the EU’s Carbon Border Adjustment Mechanism (CBAM), demonstrates the country's progressive approach to energy transition.
The CBAM, starting January 2026, will implement a tax on the greenhouse gas (GHG) – mainly carbon dioxide – emitted during the production of carbon intensive goods such as steel, cement, fertilizers, aluminum, electricity and hydrogen that are entering the EU.
Nonetheless, challenges remain. Financial constraints, regulatory provisions, and infrastructural deficiencies continue to hinder the expedited rollout of renewable energy projects.
Addressing these challenges will require strategic policy reforms and policy investments to ensure appropriate financial instruments and strengthened public-private cooperation.
