Environmental Technologies Industries

Environmental Technologies Industries

Market Plans

Egypt Environmental Export Market Plan

Chapter 6-Environmental Consulting Services

As the Egyptian Environmental Affairs Agency (EEAA) continues to establish an environmental regulatory structure and begins to address the most pressing environmental problems, the demand for environmental consulting services is expected to grow.

Environmental Impact Assessments

The 1994 Law for the Environment (Law 4/1994) established the need for environmental impact assessments (EIAs). As noted in chapter 2, the 1997 EIA Guidelines define three categories of projects according to the significance of the project's impact on the environment: “white,” “gray,” and “black.” Table 11 lists the “black” projects that require a full-scale EIA. The competent administrative authority is responsible for reviewing the EIA in consultation with the EEAA. Given the recent publication of the guidelines, the market for EIAs is just emerging. About 60 EIA reports are submitted by industries each month, of which about 15 percent (about eight per month) are full EIAs for “black” projects. The cost of conducting an EIA ranges from $1,500 for a very basic study to tens of thousands of dollars.

The principal market for contracting of EIA studies is represented by coastal resorts, power plants, and other energy projects. For example, over the next ten years, hotel capacity on the Gulf of Aqaba coast is planned to increase from the current 15,000 beds to nearly 60,000 beds in 2002 and over 90,000 beds by 2017. During this period, the EIA process will be required of tourist establishments as a preventive measure to ensure conservation of marine (coral reef) and land biodiversity. For U.S. companies, the most viable opportunities lie in large projects sponsored by multinational firms, for which special expertise is not locally available.

ISO 14001 and Environmental Management Systems

The EEAA, through its industrial pollution prevention and abatement programs, encourages industries to establish environmental management systems (EMSs) as a foundation for sound environmental performance. Egyptian industries are beginning to factor environmental considerations into their overall business strategies. These moves are prompted in large part by the fairly recent surge in interest in ISO 14001, Eco-Management and Audit Scheme, and BS 7750, international standards that must be met for companies to export their products. To meet environmental goals, more companies are establishing EMSs and seeking certification. ISO 14001 is a series of standards developed by the International Standards Organization (ISO) to provide business with a structure for managing environmental impacts. It is the only standard in the series that is intended to be used for third-party certification. ISO 14001 was approved by the international body in 1996. The first factory in Egypt to be certified under ISO 14001 was an Indian-owned carbon black plant.

The industrial sectors most likely to pursue ISO 14001 certification will be those whose primary market is exports to Western Europe. The market for ISO 14001 certification is still small. According to the EEAA, less than ten industrial facilities in Egypt have been certified. However, there is a clear interest in developing environmental management systems at industrial plants. Under the U.S. Agency for International Development's (USAID’s) Environmental Pollution Prevention Project, USAID has funded several ISO 14001 training courses for industrialists. Attendees included representatives from textile plants, chemical plants, metal-finishing plants, and food-processing plants.

Table 11: Projects Requiring a Full EIA Competent

Competent Administrative Authority	Project Type	Production Capacity/Proj. Size Threshold
Ministry of Industry	Iron and steel factories	>150 tons per day
	Electroplating factories	>25 tons per day
	Cement factories: dry process wet process	>100 tons per day >50 tons per day
	Mining projects	>1,500 acres
	Chemical plants (e.g., fertilizer, pharmaceuticals, paint, soap and detergent)	>50 tons per day
	Pesticide manufacturing	All
	Pulp and paper plants	>500 tons per day
	Textile dyeing	>10 tons per day
	Leather tanneries	>1 million ft²/year or 750 hides/day
	Lead smelters	All
	Vegetable oil refining	All
Ministry of Petroleum	Oil and gas exploration and production	All
	Offshore and onshore pipelines	>50 km
	Oil and gas separation, processing, handling, and storage facilities	All
	Petroleum product storage facilities	>15,000 m³
	Mineral oil refineries and petrochemical industry	All
Ministry of Electricity and Energy	Thermal power plants	>30 megawatts
	Nuclear power plants	All
	Intercontinental transmission lines	All
	Hydropower plants	All
Ministry of Transport	Mass transit systems and expressways, including bridges and tunnels	50 km
	Commercial airports and runway extensions	>15,000 m
	Railway lines	>50 km
Ministry of Maritime Transport	Ports	>25 deadweight tons
	Extensions of existing ports	All
Ministry of Tourism	Hotel or resorts in environmentally sensitive, culturally or historically significant areas	All
Ministry of Public Works and Water Resources	New irrigation projects including dams and barrages	All
Ministry of Agriculture	Land reclamation projects	>400 acres
Ministry of Housing, Utilities, and New Communities	Wastewater treatment plants	>1 million person equivalents

Source: Egyptian Environmental Affairs Agency, Guidelines for Egyptian Environmental Impact Assessment, 1997.

Laboratory and Monitoring Services

Laboratory resources remain, for the most part, in public-sector companies and centers attached to government ministries. An example is the Environmental Monitoring and Occupational Health Center, created in 1983 with the Ministry of Health with World Health Organization assistance. The center maintains both a water pollution analytical lab and an air and radiation lab, contracting with private developers to perform baseline environmental quality studies as part of EIAs. Within the Ministry of Housing, Utilities, and New Communities, the National Organization for Potable Water and Sanitary Drainage performs wastewater quality analyses for public-sector wastewater authorities and private industry. Other laboratories have been established in technical universities. The EEAA has plans to establish a reference laboratory as well as laboratories at each of its future regional branch offices.

It is expected that with the implementation of the Law for Environment (Law 4) in 1998, demand for laboratory and monitoring services will take off. Law 4 requires all industries to maintain a “Register of Environmental Impacts” containing data on all waste discharges (air emissions, wastewater, and solid and hazardous waste). Multinational companies or those that export to Europe are likely to be the first to comply with the new requirements.

Policy Development and Institutional Strengthening

Because of the large influx of donor-funded environmental projects and the common importance of environmental policy and institutional development to USAID and other donors, there is a considerable market for such services as legal and regulatory development; organizational development; data and information management systems; and training in permitting, compliance monitoring, and enforcement. The principal target of these projects is the EEAA, although USAID and other donors have also extended services to water and wastewater utilities, other government ministries, governorates, and some municipalities.

Under the new Egyptian Environmental Policy Program which began in 1998, USAID and Egypt will provide $50 to $70 million in technical assistance over the next five years. The USAID-funded Environmental Sector Assessment lists 55 separate initiatives under the following waste management, renewable energy and energy efficiency, and environmentally sustainable tourism. These projects will be implemented by U.S. companies through new or existing USAID contracts.

Other Environmental Services

In addition to demand for EIAs, environmental management systems, and certification services, demand for environmental consulting will increase in such areas as the following:

Pollution Prevention/Cleaner Production Audits. While traditional environmental pollution control is still the predominant approach, pollution prevention measures are gaining ground. Since 1996, at least 211 pollution prevention audits of varying depth have been conducted at Egypt's industrial establishments. All of these audits were part of donor-funded projects. Under USAID’s Environmental Pollution Prevention Project, audits were conducted in a number of companies to demonstrate the economic and environmental benefits of pollution prevention. The industrial sectors covered by these audits included textile manufacturing and processing, appliance manufacturing, automotive assembly, steel production, food processing, printing and dyeing, electroplating, and metal finishing.
Industrial Wastewater Characterization Studies. Demands for consulting services are centered on the evaluation and treatment of industrial wastes. The main driver for these services is the pending publication of new regulations for the discharge of industrial effluents into sewerage systems and waterways. Some industries have contracted environmental consulting services to design and install wastewater treatment (pre-treatment) equipment.
Industrial Hazardous Waste Management Consulting. Published in 1998, new regulations created a need for consulting services in hazardous waste management. Companies will need consultants to generate estimates, assess treatment and disposal capacity, and create hazardous waste databases and inventories.

Table 12: Donor-Funded Technical Assistance Projects Funding

Donor	Project	Funding ($US millions)	Duration	Description
Environmental Impact Assessment
British Department for International Development	(DFID) capacity Building in EIA and Industrial Auditing Outside EEAA	2.1	1995-1998	Services focus on other line ministries with responsibilities under the EIA program.
Monitoring and Information Systems
Canadian International Development Agency (CIDA)	Environmental Information Systems Design and Implementation	9.3	1996-2002	Develop an action plan for EEAA information needs; develop an operational Global Information System; integrate up to 7 Government of Egypt agencies in the water sector in one environmental information system; train staff; develop a documentation center.
CIDA	National Water Quality and Availability Program	14.5	1996-2003	Improve water quality testing and availability management systems.
Danish International Development Agency (DANIDA)	Environmental Information and Monitoring Program	13.3	1996-2000	Monitor air and coastal waters nationally.
Japanese International Cooperation Agency	Laboratory Network for EEAA Regional Offices	6.0	1996-1999	Provide equipment for water and air monitoring systems in eight EEAA minilaboratories.
Pollution Prevention Assessments
CIDA	Environmental Technology and Management Fund	14.7	1995-2000	Support the private sector in developing "green" businesses.
DANIDA	Pollution Prevention Project at the Kima Fertilizer Factory, Aswan	9.0	1998-2000	Develop a Cleaner Production and Integrated Development Action Program to achieve regulatory compliance.
U.S. Agency for International Development (USAID)	Energy Conservation and Environmental Project/Environmental Pollution Prevention Project	67.5	1988-1998	Conduct pollution prevention audits, promote cleaner technologies, train in ISO 14001, provide EMSs for new industrial cities.
Policy Develop/Inst. Strengthening
DFID	Support for Environmental Assessment and Management Project	6.4	1995-1998	Prepare governorate environmental action plans and establish environmental management units in Sohag and Dakahlia.
DANIDA	Environmental Education and Training Program	4.6	1995-1999	Train staff at EEAA and sectoral ministries.
DANIDA	Organizational Support Program II	2.7	1997-2000	Build institutional capacity of EEAA.
DANIDA	Economic Instruments	3.5	1998-1999	Pilot economic incentives to encourage regulatory compliance and environmentally sound practices.
USAID	Egypt Environmental Policy Program	240.0 (20-30%/TA)	1998-2002	Promote policy, regulatory, and institutional reform in the areas of energy efficiency, industrial pollution, solid waste management, and natural resource management.
World Bank	Red Sea Coastal and Marine Resource Management (TA)	5.0	1995-1998	Develop and implement policy, plans, and regulations for coastal zone management.

TA = total allocated

Consulting Services Market Summary

Egypt's market for environmental services is estimated at $60 million. Historically, the largest share of this market (over 80 percent) comes from USAID and other international donor-funded technical assistance projects. Table 12 lists major donor-funded technical assistance projects in Egypt.

The demand for environmental services is growing and is expected to continue. The need for EIAs will continue to dominate the commercial market. As regulations for air, water, and hazardous waste are promulgated and more strictly enforced, industries will require consulting services to help them meet these new requirements. ISO 14001 and other certification programs will gain popularity among private Egyptian companies, particularly those exporting to European markets. Companies providing consulting services should be fully versed in EMS practices and certification requirements. Several U.S. companies are well established in the Egyptian market but continue to face competition from European firms.

Environmental Consulting Services

Market Size: $60 million.
Best Prospects: EIAs, EMS development, policy development, and institutional strengthening.