A U G U S T 2 0 2 3 U N L O C K I N G ELECTRIC MOBILITY P O T E N T I A L I N M E N A Regional Chapeau Report INFRASTRUCTURE #BuildingBetterLives MOLO eMobility © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of the World Bank, with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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CONTENTS List of Abbreviations....................................................................................................................... iv Acknowledgments.. ........................................................................................................................ viii Executive Summary.. ......................................................................................................................... 1 1 • Context .. ...................................................................................................................................... 10 2 • Motivation................................................................................................................................... 12 Why the Focus on Electrification of Public Transport?.................................................................. 12 Why were Egypt, Jordan, and Morocco Chosen as Deep-dive Countries?.................................... 13 Mobile Cooling Considerations.................................................................................................... 13 3 • Current Status of E-Mobility in MENA.................................................................................... 14 Government Policies to Support BEV Adoption . . ......................................................................... 16 Deployment of Publicly Accessible Charging Stations . . ............................................................... 16 Difficulty Electrifying Public Transit.............................................................................................. 17 Mobile Cooling. . ........................................................................................................................... 18 Impacts of Urbanization and Informality on Public Transit ........................................................... 18 Job Creation................................................................................................................................ 19 4 • Key Findings from Country Deep Dives Egypt, Jordan, Morocco. . .................................... 20 Cross-cutting Aspects. . ............................................................................................................... 20 GHG Emissions Reduction Targets......................................................................................... 20 Prominent Transport Sector Emission Reduction Targets.. ....................................................... 21 Reliance on Fossil Fuel Imports. . ............................................................................................. 21 Penetration of Renewable Generation ................................................................................... 21 Absence of Mobile Air Conditioning (MAC) Policies................................................................ 22 Total Cost of Ownership (TCO) Analysis...................................................................................... 22 Supportive Strategies, Policies, and Regulations. . ....................................................................... 25 Electric Grid Capabilities. . ...................................................................................................... 26 Social, Economic, and Environmental Considerations............................................................ 26 Stakeholder Engagement.. ..................................................................................................... 28 SWOT Analyses..................................................................................................................... 29 5 • Challenges and Mitigation Strategies to Advance E-Mobility in MENA........................... 32 Reliance on Third Parties to Install Infrastructure........................................................................ 32 Challenge.............................................................................................................................. 32 Mitigation.. ............................................................................................................................. 32 Contents i Cost of Electrifying Transit Fleets ............................................................................................... 33 Challenge.............................................................................................................................. 33 Mitigation.. ............................................................................................................................. 33 Limited Stakeholder Participation . . ............................................................................................. 33 Challenge.............................................................................................................................. 33 Mitigation.. ............................................................................................................................. 33 Economics of BEV Adoption. . ...................................................................................................... 35 Challenge.............................................................................................................................. 35 Opportunities. . ....................................................................................................................... 35 Balancing the reduction in levies collected from fuel for ICE vehicles......................................... 35 Challenge.............................................................................................................................. 35 Mitigation.. ............................................................................................................................. 35 Distribution System Constraints.................................................................................................. 36 Challenge.............................................................................................................................. 36 Mitigation.. ............................................................................................................................. 36 Climate Impacts on Battery Range.............................................................................................. 36 Challenge.............................................................................................................................. 36 Mitigation.. ............................................................................................................................. 37 Operational Constraints for E-Buses........................................................................................... 38 Challenge.............................................................................................................................. 38 Mitigation.. ............................................................................................................................. 38 Charging Strategy—Public Transport.......................................................................................... 38 Challenge.............................................................................................................................. 38 Mitigation.. ............................................................................................................................. 39 Charging Strategy—Private Passenger BEVs and E-taxis ........................................................... 40 Challenge.............................................................................................................................. 40 Mitigation.. ............................................................................................................................. 40 Job Creation............................................................................................................................... 40 Challenge.............................................................................................................................. 40 Mitigation.. ............................................................................................................................. 40 6 • Key Policy Recommendations. . ............................................................................................... 43 ii UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Figures Figure ES.1. • Chapeau Report Overview.............................................................................................. 3 Figure ES.2. • E-bus Uptake in MENA Countries by 2022..................................................................... 5 Figure ES.3. • E-Bus Value Chain . . ....................................................................................................... 6 Figure ES.4. • Three Pillars of E-Mobility Strategy . . ............................................................................. 7 Figure 3.1. • E-Car Sales by Region vs. E-Bus Sales by Region. . ........................................................... 15 Figure 3.2. • Possible Roles Played by Different Parties in Different Stages of EV Adoption. . .............. 17 Figure 3.3. • Passenger Electric Vehicle Value Chain.......................................................................... 19 Figure 3.4. • E-Bus Value Chain. . ......................................................................................................... 19 Figure 4.1. • SWOT for Egypt. . ............................................................................................................. 29 Figure 4.2. • SWOT for Jordan............................................................................................................ 30 Figure 4.3. • SWOT for Morocco.......................................................................................................... 31 Figure 5.1. • E-bus Stakeholders........................................................................................................ 34 Figure 5.2. • Design Considerations for E-bus Charging Strategy.. ..................................................... 39 Figure 6.1. • E-mobility Policy Recommendations: Three Pillars.......................................................... 43 Tables Table 1.1. • Summary of Factors Facilitating E-Mobility Uptake Globally. . .............................................. 11 Table 3.1. • Summary of Factors Facilitating E-Mobility Uptake in MENA............................................. 15 Table 4.1.A • Egypt Financial TCO Comparison for Bus Technologies................................................. 23 Table 4.1.B • Egypt Economic TCO Comparison for Bus Technologies................................................ 23 Table 4.2.A • Jordan Financial TCO Comparison for Bus Technologies.............................................. 23 Table 4.2.B • Jordan Economic TCO Comparison for Bus Technologies............................................. 24 Table 4.3.A • Morocco Financial TCO Comparison for Bus Technologies. . .......................................... 24 Table 4.3.B • Morocco Economic TCO Comparison for Bus Technologies.......................................... 24 Table 5.1. • Options for Mitigating the Adverse MAC Impacts During Summer. . .................................. 37 Contents iii LIST OF ABBREVIATIONS AFC Alkaline Fuel Cell AfDB African Development Bank AMIC Automotive Marketing Information Center APTA Alexandria Passenger Transport Authority BAU Business-As-Usual BEB Battery Electric Bus BOO Build-Own-Operate Projects BRT Bus Rapid Transit CCS Combined Charging System CEEU Central Energy Efficiency Unit CNG Compressed Natural Gas CoO Certificates of Origin CPO Charging Point Operators CTA Cairo Transport Authority DisCo Distribution Company DSO Distribution System Operators EBRD European Bank for Reconstruction and Development ECA Export Credit Agency EEHC Egyptian Electricity Holding Company EgyptERA Egyptian Electric Utility and Consumer Protection Regulatory Agency EOS Egyptian Organization for Standardization EPC Engineering, Procurement, and Construction EV Electric Vehicle EVSE Electric vehicle supply equipment FCEBs Fuel Cell Electric Buses FCV Fragility, Conflict, and Violence FiT Feed-in-Tariff GCR Greater Cairo Region GDP Gross Domestic Product iv UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward GenCos Generation Companies GHG Green House Gas GIS Geographic Information System GoE Government of Egypt GOEIC General Organization for Import and Export Control GoO Guarantee of Origin GWP Global Warming Potential HEBs Hybrid electric buses HVAC Heating, ventilation, and air conditioning ICA Industrial Control Authority ICEs Internal Combustion Engines ICT Information and Communications Technology IEC International Electrotechnical Commission IFC International Finance Corporation IFIs International Financial Institutions IPPs independent power producers ISES Integrated Sustainable Energy Strategy ISO International Standard Organization JICA Japan International Cooperation Agency LEZ Low Emission Zones LRT Light Rail Train LTRA Land Transport Regulatory Authority LV Low voltage MAC Mobile Air Cooling MedReg Mediterranean Energy Regulators MENA Middle East and North Africa MoD Ministry of Defense MoE Ministry of Environment MoEFI Minister of Economy and Foreign Investment MoERE Ministry of Electricity and Renewable Energy MoHE Ministry of Higher Education MoHUUD Ministry of Housing, Utilities and Urban Development MoI Ministry of Interior List of Abbreviations v MoIC Ministry of International Cooperation MoMP Ministry of Military Production MoPBS Ministry of Public Business Sector MoTI Ministry of Trade and Industry MoU Memorandum of Understanding MSP Mobility Service Provider MV Medium Voltage NAC New Administrative Capital NASCo El-Nasr Automotive Company NAT National Authority for Tunnels NATCo National Automotive Company NCA Nickel-Cobalt-Aluminum NCCC National Climate Change Council NCCS National Climate Change Strategy NCEDC North Cairo Electricity Distribution Company NCRCD National Company for Roads Construction and Development NEEAP National Energy Efficiency Action Plan NLPRs Non-landed Private Residences NMC Nickel-manganese-cobalt NPCO National Petroleum Company NREA New and Renewable Energy Authority NRP National Roads Project NTRA National Telecommunication Regulatory Authority NUC New Urban Community OCPP Open Charge Point Protocol OECD Organisation for Economic Co-operation and Development OEM Original Equipment Manufacturer PCC Point of Common Coupling PEM Polymer Electrolyte Membrane PIDA Programme for Infrastructure Development in Africa PPP Public-Private Partnership RES Renewable Energy Sources SCEDC South Cairo Electricity Distribution Company vi UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward SDGs United Nations Sustainable Development Goals SDS Sustainable Development Strategy SMEs Small and Medium Enterprises SoC State-of-Charge SPV Special Purpose Vehicle TA Technical Assistance TCO Total Cost of Ownership TSO Transmission System Operators TtT Train-the-Trainers V2D Vehicle-to-Device V2G Vehicle-to-Grid V2I Vehicle-to-Infrastructure V2N Vehicle-to-Network V2P Vehicle-to-Pedestrian V2V Vehicle-to-Vehicle VAT Value Added Taxes VCC Vapor Compression Cycle vRE variable Renewable Energy WB World Bank List of Abbreviations vii ACKNOWLEDGMENTS T his Chapeau Report on Electric Mobility Specialist), Madalina Pruna (Investment Officer), in Middle East and North Africa (MENA) Magalie Pradel (Senior Program Assistant), Malika consolidates the various components under Azzazene (Investment Officer), Mark Njore (Program the umbrella study “Unlocking the Electric Mobility Assistant), Marwa Mostafa Khalil (Operations Officer), Development Potential in the MENA Region”. This Michele Chait (Senior Energy Consultant), Mira Morad study was made possible by funding from the Energy (Senior Transport Specialist), Moez Cherif (Lead Energy Sector Management Assistance Program (ESMAP), Economist and Program Leader), Mohamed Zakaria Mobility and Logistics (MOLO) Trust Fund and Public- Kamh (Senior Energy Specialist), Muneeza Mehmood Private Infrastructure Advisory Facility (PPIAF). Alam (Senior Transport Economist), Nabil Samir (Senior Transport Specialist), Noreddine Citroen (Senior Energy The umbrella study was led by Yanchao Li (Energy Specialist), Rahul Srinivasan (Energy Specialist), Roger Specialist) and Ashok Sarkar (Senior Energy Specialist Gorham (Senior Transport Specialist), Salma Abdel and Program Leader), MENA Energy and Extractives Fattah (Transport Specialist), Samuel Baiya (Program Global Practice, World Bank. The core technical team Officer), Susan Lim (Senior Transport Specialist), Tu Chi comprised of the following colleagues from both Nguyen (Senior Energy Economist), Yang Chen (Senior Energy and Transport Global Practices of the World Transport Specialist), Younes Errati (Digital Development Bank: Nobuhiko Daito (Transport Specialist), Tarek Specialist), Yousra Assaker (Senior Energy Specialist), Keskes (Energy Specialist), Kristin Panier (Economist), and Ziad Nakat (Senior Transport Specialist). María Rodríguez de la Rubia (Energy Consultant), Yao Zhao (Energy Consultant) and Munyaradzi Chidakwa The task team wishes to thank management in the (Operations Analyst). World Bank, particularly Paul Noumba Um (Regional Director, MENA Infrastructure), Husam Beides This study has benefited from inputs of a large group (Practice Manager, MENA Energy), Ibrahim Dajani of colleagues across the World Bank Group (including (Practice Manager, MENA Transport), Erik Fernstrom the International Finance Corporation, IFC) and (former Practice Manager, MENA Energy), and Olivier external experts. The task team wishes to express Le Ber (former Practice Manager, MENA Transport) for gratitude to (A-Z by first name): Adam Stone Diehl their continued support and guidance. The analytics (Transport Specialist), Affouda Leon Biaou (Senior underpinning this report was carried out by a group Energy Specialist and Program Leader), Alisan Dogan of consulting teams, including Rebel, Siemens AG, (Operations Officer), Alona Kazantseva (Operations Transport for Cairo (TfC), Engicon, Mobiconseil, Officer), Alpha Balume (Program Assistant), Arturo Ardila Trasporti e Territorio (TRT) and MRC Group. Gomez (Lead Transport Economist), Dominic Patella (Senior Transport Specialist), Gerald Paul Ollivier (Lead Design credit in this report goes to Lauren Johnson Transport Specialist), Henrik Rytter Jensen (Senior (ljohnson7@worldbank.org). Questions on this report Energy Specialist), Irene Marguerite Nnomo Ayinda- may be directed to Yanchao Li (yanchaoli@worldbank. Mah (Program Assistant), Kartik Gopal (Senior Industry org), Ashok Sarkar (asarkar@worldbank.org), and Yao Specialist), Ludovic Delplanque (Senior Infrastructure Zhao (yzhao5@worldbank.org). viii UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward EXECUTIVE SUMMARY T here is an urgency to scale up the jobs, due to the establishment of new value chains. electrification of transport amongst the worldwide efforts towards energy transition For a region featuring diverse urban settings like and decarbonization. Electric mobility, or e-mobility, the Middle East and North Africa (MENA), different has become one of the rapidly developing local circumstances lead to different rationales for opportunities to contribute to nations’ climate and adopting various modalities of e-mobility. Many development goals, including climate change MENA countries experienced rapid urbanization and a mitigation, fiscal burden reduction (for oil importing growing middle class, resulting in increased adoption economies), energy efficiency, sustainability, air of private passenger vehicles, causing severe quality improvement1, and promoting modal shift congestion and air pollution in urban environment. where applicable (e.g. expanding access to electrified For example, for Cairo as a high-density megacity public transport). The decarbonization impact is further with 20 million inhabitants, motorization and private multiplied if the electricity that powers the electric car use are developing rapidly, leading to a sharp vehicles (EVs)2 is sourced from renewable energy increase in energy consumption and emission of air resources, and end-of-life treatment for batteries can pollutants and GHG; in contrast, integrated public be handled properly3. Global experience shows that transport has been developing slowly and facing with the appropriate technology, policy and financial profound challenges. Electrifying various modalities interventions, e-mobility could present opportunities could be beneficial in this setting, including but to not only decarbonize both the energy and not limited to passenger vehicles electrification, transport sectors, but also create diverse set of social, deployment of electric 2-3 wheelers, and scale-up of environmental, and economic co-benefits, including electric buses (e-buses) where possible. In Jordan’s 1 E-mobility adoption could also offer significant benefits to reduce localized emissions (such as air pollutants), which could be manifested more directly than its impact on overall reduction of GHG emissions. 2 EVs in this paper refers primarily to battery electric vehicles (BEVs). The two terms EVs and BEVs have been used interchangeably in this paper. 3 There is often debate whether EVs could actually contribute to GHG emissions reduction overall, given that the upper stream power generation is not necessarily powered by clean energy, and the battery manufacturing process involves emissions from mining process. A comprehensive review by Knobloch et al. (2020) shows that even if power grids are not decarbonized fully, the use of EVs would still lead to emissions reduction in most of the countries given improved energy efficiency. Emissions reduction in utility-scale power plants is much more feasible and less costly than emissions reduction in individual ICE vehicles running on the roads. Moreover, decarboniz- ing the manufacturing process of batteries and ensuring end-of-life treatment of batteries is critical, to achieve climate goals and also preserve the limited mineral resourc- es which are critical for energy transition overall. ESMAP (2020) report “Reuse and Recycling: Environmental Sustainability of Lithium-ion Battery Energy Storage Systems” examines end-of-life and second-life treatment of Li-ion batteries which are widely used in EVs. Executive Summary 1 capital city Amman, which is on a smaller scale, e-mobility in the MENA region, building upon the expansion of BRT network presents immediate three in-depth country analyses and other reports opportunities to deploy e-buses. In large Moroccan of the umbrella study (see below). cities, ambitious targets have been set to develop 2. Country-specific deep dives on public transport charging infrastructure, along with expansion of electrification in Egypt, Jordan, and Morocco. public transport networks (trams, buses and taxis). Three country-specific reports present technical While at different stages of deploying e-mobility, analysis, financial assessments, business models countries of the Middle East and North Africa and implementation practices that could be used (MENA) region have seen very limited electrification to develop strategies to facilitate the deployment of public transport which offers the highest potential of electric buses (e-buses) and/or electric taxis to achieve climate and socioeconomic development (e-taxis). A summary of those deep dives is goals. Light-duty EVs are nearing cost parity and included in Chapter 4 of this Chapeau Report. Key adoption is growing, but penetration of heavy-duty findings on each country are complemented by an vehicles such as e-buses remain limited, particularly examination of challenges and opportunities, total where strong government financial support is absent. cost of ownership (TCO) quantifications; strengths, In recent years, public transport has come to the weaknesses, opportunities, and threats (SWOT) forefront of the government’s priorities. This sector analysis; and policy recommendations that can has often been cited by public officials as a key area be leveraged to further the large-scale transition for improvement and as a public service which the to e-mobility in these countries and beyond. government has an obligation to provide. In addition 3. Analysis of mobile air conditioning (MAC) to producing relatively higher GHG emissions impacts with a focus on the MENA region’s benefits compared to light duty EVs and passenger characteristics. In regions like MENA that cars, electrification of buses also results in higher experience hot seasonal temperatures, battery socioeconomic benefits because vulnerable groups, electric vehicles (BEVs) encounter additional including women and the poor, tend to rely more on challenges vis-a-vis comparable, traditional internal public transport. combustion engine (ICE)-based vehicles (ICEVs) that they replace. In hot weather, mobile cooling Considering relatively little attention being paid to through air conditioning in BEVs causes battery public transport electrification in MENA, this study, power to discharge faster ultimately resulting in “Unlocking Electric Mobility Potential in MENA” lower driving ranges between charging cycles, funded by the ESMAP, MOLO and PPIAF trust funds, leads to the use of larger-sized batteries (which set out to examine the opportunities and challenges increases the vehicle weight and cost, and lowers and finding solutions to help address this gap. The efficiency), and/or increases battery charging time main deliverables of this study include the following: (which increases downtime and therefore affects 1. Chapeau (this report). This Chapeau Report the TCO adversely).4 Furthermore, additional provides an overview of the rationale, potential cooling of batteries and power electronics further benefits, challenges, and key opportunities of reduces the driving ranges achieved, particularly 4 All things being equal, relative to other milder climates, the additional energy requirements for mobile cooling in warmer weather will require more frequent charging of EV batteries and, depending on distance travelled, may require increased penetration of direct current fast charging (DCFC) infrastructure. 2 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward FIGURE ES.1. • Chapeau Report Overview MENA Status & Trends, Key Findings from Country Deep CHAPEAU REPORT Dives, Challenges, Opportunities & Recommendations EGYPT DEEP DIVE JORDAN DEEP DIVE MOROCCO DEEP DIVE • Situational Analysis • Situational Analysis • Situational Analysis • Technical Analysis • Technical Analysis • Technical Analysis • Financial Analysis • Financial Analysis • Financial Analysis • Business Model Analysis • Business Model Analysis • Business Model Analysis • Policy Options • Policy Options • Policy Options MOBILE COOLING DEEP DIVE Assessment of E cient and Clean Mobile Cooling Solutions in E-Mobility for MENA as a Warm Region Increasingly A ected by Climate Change Source: Authors during seasons when peak temperatures are In MENA, by 2022, the United Arab Emirates has encountered. The mobile cooling (also called the largest number of public charging stations, more mobile air conditioning – MAC) analysis in this study than 400, supported by the Dubai Electricity and offers practical solutions and recommendations Water Authority’s installation of 300 chargers. Among to address MAC-related challenges especially in countries with BEV adoption targets, the countries the context of MENA region. with relatively lower GDP per capita, Egypt and Jordan, rely on third-party, private sector entities to publicly The availability of charging infrastructure is of accessible charging stations. These countries have paramount importance in scaling up e-mobility a small fraction of EV charging infrastructure (also worldwide including in the MENA region. The collectively called electric vehicle supply equipment availability of publicly accessible BEV charging - EVSE) penetration per capita by early 2022, stations located conveniently along the transport which constrains large-scale BEV deployment and corridors and supplying electricity at affordable highlights the need for government’s involvement prices helps towards higher level of adoption of in the early stages of transition to e-mobility as BEVs by alleviating range anxiety and reducing TCO. has been happening in countries like Germany, As a result, there has been a significant push for China, and India. As adoption of BEVs increase, the incentivizing investments in publicly- and privately- economic viability of publicly accessible charging funded and owned accessible charging stations by stations would improve and private sector interest in governments, electric utilities, and private sector in the ownership and operation of charge points would many countries that have placed e-mobility in the make this pathway feasible in the MENA region. forefront of their Net or Near-Zero carbon strategies. Executive Summary 3 In addition to the limited presence of publicly investments in development of charging infrastructure, accessible charging stations in the MENA region, have been the key drivers behind the huge shift in adoption of personal BEVs is also hampered by a the public transport stock towards e-buses. lack of customer awareness and enthusiasm for these types of vehicles. Given governments’ difficulty Government procurement efforts have been the in mandating the adoption of BEVs for personal use, main driver behind e-bus penetration, albeit to a customer awareness and enthusiasm, along with limited extent, in the three MENA countries of Qatar, financial and fiscal incentives (like in Europe) are Morocco and Egypt. The State of Qatar acquired critical drivers behind higher levels of the adoption. In approximately 700 e-buses ahead of hosting the addition to lack of awareness and range anxiety, the 2022 FIFA World Cup.5 Morocco has acquired over high upfront cost of BEVs also limits uptake in MENA, 150 e-buses, 138 of which were made-in-Morocco such as in Morocco. Jordan, Egypt and Dubai are buses deployed in the city of Kenitra6. Multiple, small- taking proactive steps to provide incentives. Egypt scale and pilot level initiatives have demonstrated and Jordan have both announced electricity tariffs e-bus operation in Egypt: a pilot program in Alexandria specific to BEV charging to enhance the economic deployed 19 e-buses, while 110 domestically proposition of adopting BEVs, and further progress manufactured e-buses operated in Sharm El-Sheikh can be made by building upon synergies provided by during the 27th Conference of the Parties of the the deployment of smart meters and implementation United Nations Framework Convention on Climate of time-of-use (TOU) pricing mechanisms. Change (COP 27)7. Jordan8 and UAE have relatively few e-buses but as explained earlier, have focused on As experienced globally, the electrification of public passenger vehicles electrification. When it comes to transportation face additional, complex challenges, e-taxis, except for Dubai’s fleet of 170 Tesla e-taxis, and the MENA region is no different. The difficulties there are no examples currently operating in MENA. encountered include route planning, the significantly higher up-front cost of e-buses compared to ICE- In-depth analysis of transport electrification in based buses, different modes of ownership of urban Egypt, Jordan and Morocco revealed that these bus operators (ranging from public to private), the three countries have several important similarities high cost of charging infrastructure, misaligned that have impacted BEV adoptions in each country electricity rates, changes that must be made to fleet to date. All three countries have established GHG operation business models, and reskilling needs of emission reduction targets in their rapidly growing the workforce serving the public transport sector. transport sector through their Nationally Determined Owing to these factors, the adoption of e-buses has Contributions (NDCs), and national climate change been relatively slower even worldwide, except in and/or transport sector strategies and commitments. China where significant government incentives and At the same time, all three countries are making manufacturing of e-buses, along with government progress in scaling up the share of renewable energy 5 https://new.abb.com/news/detail/80100/abb-to-charge-qatars-largest-electric-bus-infrastructure-project 6 https://www.moroccoworldnews.com/2022/01/346434/kenitra-launches-moroccan-made-buses-to-alleviate-public-transportation-crisis 7 The World Bank-financed Greater Cairo Air Pollution Management and Climate Change Project to demonstrate 100 e-buses for Cairo Transport Authority operation is also underway. 8 The Greater Amman Municipality is currently in the process of procuring 15 e-buses to be deployed in Amman; meanwhile, the Amman BRT Phase 2 Project is assessing e-buses as one of the potential bus technologies. 4 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward FIGURE ES.2. • E-bus Uptake in MENA Countries by 2022 E-Taxi E-Bus 700 for FIFA 19 in Alexandria 138 out of 150 170 Tesla e-taxis World Cup 110 for COP27 locally produced in Dubai Source: Authors generation resources in the electricity sector, with fewer moving parts and less maintenance required; Morocco being a leader not only in the MENA region when battery is covered by manufacturer’s warranty but globally. However, none of these countries have (or similar contractual arrangements), the operational considered the challenges surrounding mobile air costs are lower for BEVs and the TCO can be conditioning (MAC) impacts on the range of BEVs and competitive during the life cycle. This advantage their adoption. 9 is multiplied when higher fuel costs (for ICEVs) are taken into account. A key takeaway from the analysis BEVs’ cost advantages, determined commonly by across the three countries, and consistent with global the metric of total cost of ownership (TCO), could experiences, is therefore to make the enabling materialize when they are allowed to operate for regulatory and commercial arrangements along with longer useful life10, and the benefits are amplified financial and fiscal incentives, so that BEVs’ TCO when the cost of the baseline alternative, that is, becomes comparable or lower than that of ICEVs, cost of fuel for ICEVs, is on the higher side, as is resulting in higher penetration of the former into the the case at present. The TCO analysis of e-buses future vehicle stocks in the public transport segment. and/or e-taxis was carried out for all three countries. Using similar useful life benchmarks, the TCO of Egypt, Jordan, and Morocco all have ambitious BEVs is estimated to be higher than the TCO for targets to increase BEV adoptions, including in the ICEV alternatives in the public transport segment. public transport segment. By 2030, Morocco seeks However, when allowed to operate over a longer to have a 10 percent market share of passenger BEVs lifetime, that is on higher useful life basis with the and a 100 percent market share of e-buses and e-taxis. least downtime (while charging the BEVs), BEVs’ TCO Jordan aims to have a 50 percent share of BEVs becomes even more favorable compared to that of in the public fleet by 2030. Egypt is aiming for a 14 the ICEVs. This is operationally feasible as BEVs have percent share of new private LDV11 sales to be electric 9 In this paper, the terms mobile air conditioning (MAC) and mobile cooling have been used interchangeably. 10 The useful life of vehicles including EVs is typically defined as the period during which a vehicle is required to comply with all applicable standards, specified as a given number of calendar years and kilometers (whichever comes first). 11 Light duty vehicles such as vans and small pickup trucks Executive Summary 5 by 2025, 36 percent by 2030, and 50 percent by supplies grow, smart charging of BEVs using cleaner 2040. To serve these BEVs, Egypt aims to install 1,250 electricity is expected to be an important component and 3,100 public charging points by 2030 and 2040 of the strategy towards decarbonization to achieve respectively, as well as 34,000 and 400,000 private the respective Net and Near Zero carbon goals. charging points by 2030 and 2040 respectively. None of the MENA countries have formally As EV charging loads grow, the readiness of investigated and/or mainstreamed into their the electricity distribution grid to accommodate e-mobility strategy or policy dialogs, the potential increased EV loads could become an important negative impact of mobile cooling needs on BEV issue . Only Jordan has issued regulations specifying 12 performance, TCO and economics. The supporting grid access for EVSEs. Egypt’s Organization for MAC ecosystems in each country require a multi- Standardization (EOS) has published certain technical stakeholder development approach. Deficiencies standards, however grid codes and building codes include an absence of measures and standards for for integrating EVSEs are still missing. In Morocco, no testing and limiting the energy consumption of MAC specific standards regarding charging infrastructure systems; a lack of trained technicians and certified have yet been put in place. None of the three training programs; no higher education curriculums countries which were covered on our assessment, is focusing on MAC systems and their efficiency; and expected to experience generation capacity shortfalls an absence of defined processes for ensuring in the near- to medium-term at the national level. compliance with regulations. However, there are uncertainties about distribution grids at local levels being able to accommodate Vehicle electrification could potentially create EV electricity demand when deeper penetration of new employment opportunities in a wide range BEVs take place, including e-buses in specific urban of activities across the e-mobility ecosystem, transport corridors. As utility scale and off-grid (like encompassing direct, indirect and induced rooftop or home solar systems) renewable electricity employment. However net job creation is currently FIGURE ES.3. • E-Bus Value Chain Depot, Public Power EV EVSE Infrastructure Bus fleet Transport Supply Technology Technology & Charging Operator Services Services • Energy supplier • Battery supplier • HW - Charging • Sites • Bus fleet • Route planning • Electricity & recycling stations • Installations • Operation • Passenger transmission • Mobile cooling • SW - Charging • Technical bus fleet services (B2C) & distribution supplier stations operation • E-bus supplier Utilities Depot Charging Transport EV OEM* EVSE OEM* Fleet Operator (Gen/TSO/DSO) Operator Company / City Source: Authors 12 Technical Report “Electric Mobility & Power Systems: Impacts and Mitigation Strategies in Developing Countries”, ESMAP, World Bank, 2023 6 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward uncertain and dependent on how local value Egypt seeks to attain a 65 percent local component in chains are managed to keep up along with the BEV manufacturing by 2030. Morocco has launched just transition approaches, including localization electric passenger vehicle and bus manufacturing (versus import), skilling, reskilling, on-job training and programs. Saudi Arabia has a partnership with Lucid other initiatives. Jobs are expected to be created Motors to establish its first international manufacturing across the e-mobility value chain. For public transit facility. Both Egypt and Morocco have developed a electrification, the value chain comprises electricity local manufacturing strategy for creating new jobs, supply, vehicle technology, EVSE infrastructure, new skill sets, and reducing reliance on imported siting, installation, operation of charge points, bus products. Retrofitting ICEVs to covert to BEVs is also fleet operation, and public transport services. These likely to provide near-term job opportunities. Battery activities are depicted in figure ES.3. As the demand swapping, battery recycling, and fuel cell EVs (using for renewable-energy-powered electricity increases hydrogen) may yield opportunities in the medium- to due to transport electrification, indirect and induced long-term. Despite the aspirations, it is worth noting jobs could be created along with the jobs across the that local manufacturing requires very high upfront renewable energy value chain as well. investments and should be planned in the broader context of industrialization agenda of the country, Several MENA countries have BEV manufacturing to maximize the country’s competitive advantage in goals anchored around industrial localization relation to EV value chains and international trade. policies, with the expectation to increase employment and reduce a country’s dependence on Key policy takeaways from this study address imported vehicles, EVSE, and batteries. For example, the need for government intervention during the FIGURE ES.4. • Three Pillars of E-Mobility Strategy E-Mobility National Strategy National ITS Sector MEPS Integration & Service Formalization Cross-sectoral coordination Mandatory Labeling GWP recycling National Adoption, Sectoral of Equipment Public Transport Electrification Promotion campaigns ODS/low GWP refrigerants Regulatory Framework Testing standards Import Tari Capacity Building for e-buses Interoperability Incentives for Purchase of New Buses Charging Permits OEM Emissions Grid impact study and integration of RE / EVs Certification scheme MAC Funding Parking Shades Charging Tari including Time-of-Use Grid Infrastructure Incentives for CPOs Incentives for Enhancement Bus Operators Charging standard Pilot Project for e-buses Prices for Electricity Tax Exemption Charging infrastructure and RES synergy Incentive packages scaling up e-buses Source: Authors Executive Summary 7 early phases of BEV adoption. In particular, given that when BEVs numbers are sufficient, industries the challenges associated with electrification of bus targeted for future job growth have adequate services, figure ES.3 delineates strategic and policy and ready supply of skilled and trained workforce recommendations along three main pillars: available and the requisite infrastructure is in place. • National Adoption Planning scope should cover the entire value chain, including the development of strategies for • Sectoral Integration and Service Formalization recycling or disposing of batteries once they are • Charging Infrastructure and Renewable Energy no longer useful to power vehicles. Strategies may Sources (RES) Synergy, and Incentive Packages require investments, training, and development of procedures and regulations along with training A summary of broader strategic recommendations for infrastructure and systems. the consideration of MENA regulators, policy makers, and governments are as follows: • In the early years of BEV penetration, governments • Ensure could ensure that charging infrastructure is E-Mobility aspects are dealt with installed and operative in key locations to alleviate comprehensively across all impacted planning range anxiety. For example, the electrification of activities. The BEV ecosystem cuts across a major transport corridors with charging stations wide range of government functions including located at petrol stations or rest stops between those responsible for economic development, major cities (as in Morocco’s electrification of the manufacturing, environmental and climate policy, Tangier and Agadir highway, connecting the cities transportation, planning, permitting, licensing of Marrakech, Casablanca, and Rabat). Viability of charge point operators (CPOs), specification can be demonstrated via the electrification of of equipment standards, safety, power quality, public or commercial fleets through different pilots, regulation of electricity infrastructure deployment, with support of enabling policies and regulations and retail rates. Successful coordination across and provision of financial and fiscal incentives to relevant sectors and institutions, along with robust both public- and private-owned EVSEs and CPOs. governance frameworks will help ensure that The interoperability of public charging stations all aspects of this ecosystem are prepared for should be addressed by leveraging innovation future penetration of BEVs at scale. Identifying in digital platforms and solutions. For instance, which entity is responsible for each activity—and fast-charging infrastructure could be deployed in creating the ownership thereof—is a crucial locations optimal for e-taxi opportunity charging. element of developing an e-mobility strategy and Governments could also support the penetration of associated implementation-focused action plan. charging infrastructure in long dwell time locations, Government engagement should also include such as points of interest and residential areas interfacing strongly with the private sector and where overnight charging may not be accessible financial institutions and leveraging support from (such as multifamily buildings). international counterparts. • Where • Begin possible, support BEV procurement for planning immediately to support future government fleets. Such procurement could job growth in core automotive and ancillary span government’s mail delivery fleets, as well as industries associated with BEVs. This will ensure fleets of government owned e-buses and e-taxis. 8 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward As electric cars are achieving competitive TCO issuance, and the provision of designated parking especially with increasing fuel prices, procurement for BEVs. of BEVs for public use could be both green and • MENA regulators can ensure that BEVs sold economical. An electrified government fleet in the region mainstream the efficient MAC could also showcase the viability of transition and system technologies to cope with the hot generate impact and signal the market to boost climate, increasingly impacted by rising ambient the confidence in other private end consumers. temperatures due to global warming. This can For example, the municipality of Amman in Jordan be supported by development of appropriate has been electrifying its own fleet of light-duty standards and compliance mandates. For vehicles, with new additions being 100 percent example, specifics regarding the MAC system electric. can be included in existing or new energy • Regulators could ensure that smart charging efficiency (EE) regulations and measures, testing capabilities are technically viable across procedures, and license renewal requirements. utility, vehicle, and third-party equipment. Mandatory labelling for MAC can be integrated Communication technologies and equipment into existing EE labelling schemes to provide standards are important issues that MENA easily comprehensible information on the EE of governments could proactively support, at this MAC, encouraging customers and EV operators time, to ensure these systems are harmonized to opt for sustainable options while specifying and as vehicle charging loads increase. This can be procuring BEVs. supported by the development of appropriate • MENA regulators and policymakers could standards and specification of the deployed actively pursue robust and financially technologies. Smart charging (V1G) and vehicle-to- sustainable business models as a key condition grid (V2G) services can potentially provide several to attract private investments. While government grid benefits, including provision of ancillary intervention might be well justified during the services (frequency regulation, voltage regulation, early stages of e-mobility deployment where peak shaving, load leveling, spinning reserve), risks are high and strategic direction is needed, congestion mitigation, demand response and private sector participation is particularly crucial in renewable energy integration. accelerating charging infrastructure deployment • Consideration could be given to implementing and innovations. Certain models analyzed in the regulations that support BEV procurement deep-dive countries, for example asset separation for private transit vehicles. As aging vehicles models in Amman in Jordan, could be scaled are retired, regulations could stipulate their up where appropriate to maximize the benefit replacement with BEVs. Fleets targeted could of private capital. This would require necessary include rental car fleets, privately owned taxis, regulatory changes to provide an enabling minibuses, and microbuses. Moreover, some environment to build a solid E-Mobility ecosystem regulatory measures with no fiscal costs could within countries/regions. be considered, such as prioritizing license plate Executive Summary 9 1 • CONTEXT G lobally, the transportation sector is among The adoption of electric vehicles continues to the largest emitters of greenhouse increase rapidly worldwide. There are now over 16.5 gases (GHGs), and the electrification of million EVs on the road or triple the number of EVs on the transportation sector is, therefore, a critical the road in 2018 (IEA 2022). The International Energy pillar of carbon emissions reduction strategies Agency’s (IEA) Global BEV Data Explorer shows that globally. This report presents an overview of the more than 10 million BEVs were put into operation synergies, challenges, and opportunities related to globally in 2020, and their number is expected transportation electrification in the Middle East and to reach 95.1 million as of 2030. A summary of the North Africa (MENA) region, focusing on public transit, factors motivating global BEV adoption is presented and adoption of personal light-duty electric battery in table 1.1. vehicle (BEV) options. The report also summarizes 13 deep dives into how three countries are transitioning Though widescale adoption of e-mobility in the MENA to e-mobility and outlines key policy takeaways that region lags behind levels seen in the most advanced could be implemented if the MENA countries desire markets, each of the global factors applies to countries to promote the adoption of these vehicles, particularly in the MENA region. Further, even if MENA countries opportunities for the electrification of public transit. 14 do not take strong steps to promote BEV adoption, they will not be immune to these global trends. 13 The term “electric vehicle” (EV) refers to hybrid, plug-in hybrid, battery electric, and hydrogen vehicles. Hybrid and plug-in hybrid vehicles are not zero emission vehicles (ZEVs). ZEVs refer to BEVs and hydrogen vehicles. BEVs have an electric motor drivetrain and utilize electricity as fuel. Hydrogen vehicles also and have an elec- tric motor drivetrain powered by a hydrogen fuel cell. Hybrid vehicles utilize fossil fuel and feature an internal combustion engine (ICE) drivetrain with regenerative braking. Plug-in hybrid vehicles utilize both electricity and fossil fuel sources, and the drivetrain pairs ICE with an electric motor. This study focuses on BEV instead of hydrogen-pow- ered fuel cell EVs. To date, various countries in the GCC area and North Africa, including Morocco and Egypt, have begun exploring various initiatives to produce green hydrogen, with synergies for FCEV, heavy transport, e-buses, and aviation. While hydrogen production is a promising energy concept for commercial use, particularly in the MENA region, it is not expected to be deployed widely in the coming decade because extensive hydrogen storage and refuelling infrastructure will be required to success- fully incorporate FCEVs. Given the lack of technological growth and high uncertainty, hydrogen - powered EVs are not included in this study. 14 https://www.ucsusa.org/resources/cleaner-cars-cradle-grave. 10 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward TABLE 1.1. • Summary of Factors Facilitating E-Mobility Uptake Globally Factors Facilitating BEV Adoption Global Rationale If electricity is generated using natural gas, BEVs’ carbon dioxide emissions would reduce by over Reduction in green house gas (GHG) 50 percent compared to an equivalent ICE vehicle. A 100 percent reduction in carbon dioxide emissions emissions is achieved when electricity is generated with clean energy sources. Supporting achievement of national Many countries have established GHG reduction targets. ZEV adoption supports the achievement GHG reduction targets of these targets. Reduction of pollution emissions that Recent COVID-19 lockdowns highlighted the improvement in emissions such as NOx, SOx, and harm human health particulate matter achieved with reduced ICE vehicle use. Reduction of noise pollution BEVs produce significantly less noise than their ICE counterparts. Cutting the transport sector’s reliance on fossil fuels can improve export revenues for oil-producing Reduction of deficit nations and reduce deficits for nations that import fuels. Opportunities in e-mobility sector employment include manufacturing, technology, and services Job growth positions. Ratepayers can benefit from lower Ratepayers can benefit from electricity rate reductions as fixed costs for generation, transmission, electricity rates and distribution services are spread over additional sales from BEV charging. In addition to stemming BEV peak demand needs, smart charging can direct BEV electricity loads Smart charging of BEVs can support in support of renewables integration, enabling higher penetrations of renewable generation and the integration of renewable energy providing opportunities to reduce the cost of electricity used to charge vehicles. Declining availability of traditional Major automobile brands have announced the discontinuation of ICE vehicle manufacturing in the ICEVs future. In 2022, the US state of California enacted Executive Order N-79-2 banning the sale of new ICEVs Bans on Sales of new ICEVs by 2035. The EU has also banned the sale of ICEVs from 2035. ZEV requirements for government In certain jurisdictions, BEV adoption is supported by commitments for ZEV procurement for fleet vehicles government fleets. There is a wider, growing variety of BEV models available on the market, including all-electric SUV Increased BEV Model Availability models. Improving battery capacity and BEV Depending on vehicle and environmental conditions, a passenger LDV BEV can achieve up to 500 Range km on a single charge. There is growing customer enthusiasm for BEV adoption. BEVs offer a better driving experience BEV owner enthusiasm than traditional ICE engines. Additional benefits may be available such as access to high- occupancy vehicle (HOV) lanes on highways, waived road tolls, and free or discounted parking. The cost of a light-duty BEV is predicted to achieve parity with its ICE counterpart before 2030. Compelling economics BEVs also experience lower maintenance costs relative to ICEVs. Many utilities offer tariff structures designed for BEV charging. These are commonly time-of-use (TOU) Availability of beneficial electric rate structures that are more economical provided that charging is carried out during off-peak periods. structures There are also fee structures that mitigate demand charges for commercial charging. Transportation electrification can support longer-term transformation of the public transit sector Modal shift such as public transport formalization and modal switch. 1 • Context 11 2 • MOTIVATION I n the MENA region, the adoption of BEVs for income levels, oil and gas endowments, electricity personal and public transport offers opportunities to generation mix, and industrialization agendas, some mitigate climate change, enhance energy efficiency, common global trends and best practices can be improve urban air quality, and enhance the delivery leveraged to support uptake. This report presents of public transportation services. Nevertheless, both the overarching trends and status of e-mobility there is a knowledge gap in understanding the uptake across MENA and the country deep dives policy actions necessary to support e-mobility as that focus on the electrification of public transport in well as the operational challenges of e-mobility in Egypt, Jordan, and Morocco. It concludes with policy typical MENA countries. While MENA countries are recommendations that MENA governments can inherently diverse, with distinct characteristics across consider adopting to scale up deployment of EVs. Why the Focus on Electrification of Public Transport? Currently, across both public and private transport and the need for business model adjustments, subsectors, countries in the MENA region are at very including transitioning and retraining the labor different stages in transportation electrification. While force. Electrification of bus services presents higher light-duty EVs are nearing cost parity and adoption socioeconomic benefits because vulnerable groups, is growing, penetration of heavy-duty vehicles such including women and the poor, tend to rely more as e-buses remain limited where strong government on public transport. To this end, this study set out to financial support is absent. This is true worldwide, examine the challenges and solutions to electrifying as public transport electrification faces complex public transport in MENA countries, with particular challenges ranging from route planning, charging focus on electric battery buses. infrastructure and strategies, high upfront- costs, 12 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Why were Egypt, Jordan, and Morocco Chosen as Deep-dive Countries? In addition to reviewing the landscape of e-mobility such as historical fossil fuel dominance and a uptake in the MENA region, Egypt, Jordan, and desire to gradually transition to high shares of Morocco were selected for deeper analysis. Three renewable generation and a higher level of energy core criteria were considered in this selection: security that relies on domestic resources. 1. At the outset of this study, the three countries 3. Each of the three countries has experienced had all expressed explicit intentions to deploy rapid urbanization and a growing middle class, e-mobility to achieve their climate and energy resulting in increased adoption of private transition goals, but still lacked the systematic passenger vehicles. Demand for better and policy actions needed to achieve these goals. All cleaner public transport services is also growing three countries were also included in the first batch in these countries. Transportation electrification of Country Climate and Development Reports is uniquely positioned as a solution to reducing (CCDRs) of the World Bank Group, with strong emissions and satisfying the demand for better momentum to continue the climate dialogue and and cleaner public transport services, while the potential for concrete investment opportunities mitigating electricity sector operational issues in e-mobility. by improving electricity system load factors and integrating renewable generation. 2. The three countries, while distinct in their fossil fuel resources, share common energy mix features Mobile Cooling Considerations The MENA region features a unique operational driving range vis-à-vis the designed driving range, environment where the dynamics related to the mobile particularly during summer in the warm-weather cooling of vehicles also warrant sensible and strategic countries of the region. The energy needs for mobile considerations. This is particularly important given cooling may require upgraded or additional EV that the MENA countries are increasingly exposed charging infrastructure with considerable costs and to extreme weather events due to climate change. 15 other implications. Furthermore, there is also scope Experience in other regions suggests that meeting the for refrigerant transition in mobile cooling through a EVs’ mobile cooling needs, which includes mobile air switch to cleaner, non-hydrofluorocarbons or other conditioning (MAC), transport refrigerated units (TRUs) ozone depleting substances (HFC/ODS), and low and the cooling requirements for batteries and power Global Warming Potential (GWP) refrigerants that electronics, consumes considerable battery usage would further help to reduce direct GHG emissions and could result in a significant reduction in actual from mobile cooling. 15 See World Bank Country Climate and Development Reports (CCDRs) which cover Egypt, Jordan and Morocco in FY2022. https://www.worldbank.org/en/publication/ country-climate-development-reports 2 • Motivation 13 3 • CURRENT STATUS OF E-MOBILITY IN MENA T he MENA region is commonly viewed as for daily transportation. However, not all users are in comprising 20 countries stretching from favor of purchasing electric 2-/3- wheelers, due to the Morocco in the northwest of the African perception that private ownership of cars is indication continent to Iran in southwest Asia. As of 2022 its of social status. population is approximately 464 million (6 percent of the global population) and a GDP of about US$3.3, The following analysis focuses on those countries trillions (4.5 percent of global GDP). The region which have taken material steps to advance accounts for over 60 percent of global oil reserves e-mobility, including Egypt, Jordan, Morocco, Qatar, and 45 percent of natural gas reserves, respectively. and the United Arab Emirates. The MENA region’s progress in relation to the global factors supporting The vast majority of MENA countries, including BEV adoptions is summarized in table 3.1. Kuwait, Oman, Saudi Arabia, Algeria, Libya, Tunisia, Lebanon, and the West Bank and Gaza, are still in the While table 3.1 indicates that many of the key factors early phases of BEV adoption: relatively few publicly that induce BEV adoption globally are present in accessible charging stations have been deployed in MENA countries, the region also presents several each country and none have disclosed official vehicle important barriers that slow the uptake of BEVs. electrification strategies or incentives to promote These issues are generally tied to low government adoption. As shown in the graphs below, compared involvement in the procurement of BEVs and publicly with other regions in the world, the adoption of accessible charging infrastructure. The impact of e-buses and e-cars in MENA is among the lowest. the region’s hot summer temperatures on mobile air Nonetheless, a limited number of two-, three-, and conditioning is also an issue that must be addressed. four-wheel BEVs are currently operating in each of All of these features are also present, to varying these countries. Motorcycles i.e. 2-wheelers, could degrees, in other countries throughout the world. be a starting point for e-mobility especially in Fragility, Countries in the MENA region are well positioned to Conflict, and Violence countries, due to the low costs leverage global best practices in overcoming them. and existing strong presence of this type of vehicle 14 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward FIGURE 3.1. • E-Car Sales by Region vs. E-Bus Sales by Region E-Car E-Bus 1,600,000 160,000 1,400,000 140,000 1,200,000 120,000 1,000,000 100,000 800,000 80,000 600,000 60,000 400,000 40,000 200,000 20,000 0 0 ci & lA & a an ric & ia ric n ci & lA & a an ric & ia ric n ic ic Af ara Af ra As As Pa sia ra pe Af st Pa sia ra pe Af st be be fic a So a a fic a So a a er er ha th Ea th Ea si si h nt ro nt ro A A Am h Am h rib rib Sa Sa ut ut Ce Eu Ce Eu N dle N le st st Ca Ca b- b- d Ea Ea th th id id Su Su or or or or M M N N 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Cleaner Vehicles and Charging Infrastructure, World Bank, 2021 TABLE 3.1. • Summary of Factors Facilitating E-Mobility Uptake in MENA Factors Facilitating BEV Adoption MENA Status The emissions profile of BEVs in each country will depend upon the marginal generation technology when vehicles are charging. All MENA countries have renewable energy generation.16 Qatar and Reduce GHG emissions the United Arab Emirates have the lowest 2030 renewable generation targets (20 percent and 11 percent, respectively), while Egypt, Jordan, and Morocco have 2030 renewable generation targets ranging from 42 percent to 52 percent. Qatar, the United Arab Emirates, Jordan, Egypt, and Morocco have established GHG reduction Support achievement of national targets. Transportation electrification has been recognized as one of the key policy actions by GHG reduction targets numerous MENA countries in their climate ambitions. Improvements in air quality during COVID-19 lockdowns resulting from reduced ICE vehicle use were Reduce emissions that harm experienced in cities throughout the region including Riyadh, Beirut, Jeddah, and Baghdad. Switching human health to EVs could have same effects on urban air quality. Fuel subsidies and imported fossil fuels can add to a country’s national debt. E-mobility uptake based Reduction of Deficit on renewable energy could significantly reduce the national bill on fossil fuel. In addition to the deployment of electric vehicle service equipment (EVSE, commonly referred to as charging systems) and other e-mobility sector employment opportunities, several MENA countries have BEV manufacturing goals. For example, Egypt seeks to attain a 65 percent local Promote job growth component in BEV manufacturing by 2030. Morocco has launched electric passenger vehicle and bus manufacturing programs. Saudi Arabia has a partnership with Lucid Motors to establish its first international manufacturing facility. With increasing renewable energy penetration, countries with small power systems are experiencing Smart charging of BEVs can grid stability issues. When paired with smart charging, BEV electricity loads could be a promising support integration of renewables solution to support the integration of renewables. Declining availability of traditional As global vehicle manufacturers plan on terminating the production of ICE vehicles, the MENA region ICEVs will be impacted by reductions in ICE vehicle availability and planning ahead on EV uptake is needed. Bans on sales of new ICEVs No country in the MENA region has so far announced such bans (as in Europe and California). 16 16 IRENA 3 • Current Status ofE-Mobility in MENA 15 Factors Facilitating BEV Adoption MENA Status Qatar seeks to convert 100 percent of its bus fleet to electric by 2030, supported by 600 charging ZEV requirements for government stations. The Dubai government’s taxi fleet includes 170 Teslas. Egypt procured e-buses in advance fleet vehicles of COP-27. Jordan’s Greater Amman Municipality (GAM) is increasingly using EVs for own operations. There is a wide and growing variety of BEV models available on the market, including all-electric Increased BEV Model Availability sport utility vehicle (SUV) models, which are gaining increasing popularity in the region. Improved battery capacity and BEV Improvements in battery capacity will generally mitigate range anxiety and can support MAC needs range during the summer season. In MENA countries, the adoption of personal BEVs is currently low. Adoption in Jordan was supported by incentives that were available from 2015–19 that motivated users to import used vehicles from Availability of BEV incentives China and Europe. Dubai has provided free vehicle registration and renewal, and free city parking spots for BEVs. Egypt, Jordan, and Dubai have issued electricity tariffs specific to BEV charging. Electricity subsidies Availability of beneficial electric improve the economics of BEV charging, however, in jurisdictions where rates for electricity are rate structures subsidized, any additional kW/h used to charge BEVs will increase national debt burdens. Electrification can support longer-term transformation of the public transit sector via public transport Modal shift formalization and modal switch. Source: Original compilation. Government Policies to Support BEV Adoption The governments of MENA countries with material percent of new vehicle sales to be electric by 2030. penetration of EVSE have also set targets for EVSE, The Dubai Electricity and Water Authority (DEWA) e-bus and personal BEV adoption. For example, alone has already installed 300 charging stations. Qatar aims to convert 100 percent of its bus fleet to Dubai aims to increase the adoption of electric electricity by 2030 and to install over 600 charging vehicles to 270,000 by 2030, an increase of over 20 stations to support this effort. Qatar also expects 10 times the current level. Deployment of Publicly Accessible Charging Stations Given the importance of the availability of publicly stations have also been installed in Sharjah, Ras Al accessible charging stations to an BEV buyer’s Khaimah, Fujairah, and Ajman. In 2022, DEWA began purchase decisions and difficult early-stage developing its highway infrastructure with Siemens. economics, there has been international precedent for initial investment in EVSE by the public sector and/ In countries where the private sector is relied upon or electric utilities. to install charging infrastructure, results are less successful. For example, Egypt and Jordan rely on In the MENA region, government procurement has third parties to install public charging stations. These also supported the deployment of public charging countries have a small fraction of EVSE penetration stations. In the United Arab Emirates, more than 400 per capita (.06 percent or less), highlighting the government and third-party-owned charging stations importance of the government’s involvement in the have been installed, primarily in Dubai, equating to a early stages of adoption. Egypt’s charge points are penetration rate of 0.4 percent per capita. Charging found in about 300 locations in the Greater Cairo 16 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Area, whereas Morocco’s roughly 100 stations are government in providing financial support, developing distributed equally across Marrakech, Casablanca, public-private partnerships, and coordinating across and Rabat along the Tangier and Agadir highway. the various government sectors impacted by vehicle Qatar had about 20 publicly accessible charging electrification. It is worth noting the many roles that stations by early 2022. the electricity utilities could play in carrying out infrastructure investments that support BEV adoption. Figure 3.2 below outlines the role of the government, Lastly, as adoptions increase, the private sector is utilities, and the private sector as BEV ownership involved primarily via the ownership and operation of increases. This figure shows the critical role of the charge points. FIGURE 3.2. • Possible Roles Played by Different Parties in Different Stages of EV Adoption 1 Public Sector Led 2 Utility Led 3 Private Sector Led Government promotes early EV Utilities are well suited to set up Once demand increases and the adoption through: charging network via various models market reaches maturity, the private a. Financial incentives such as including: sector becomes more involved grants / subsidies a. Electric utility owner-operator through two main models, among b. Public-private partnerships b. Electric utility with private others: c. Governance / coordination concessionaire a. CPO network-operator c. Electric utility make-ready b. CPO owner-operator d. Electric utility with government incentive e. Electric utility to meter Early stage in electric Slow growth in electric High growth in electric mobility adoption mobility adoption mobility adoption High government involvement A mix of all models Higher private sector participation Source: Original compilation. Difficulty Electrifying Public Transit Public transport electrification faces more true in MENA countries where public transit is often complex challenges than the electrification of underdeveloped and fragmented. passenger cars. The issues encountered include route planning, increased charging infrastructure Governments’ procurement efforts account for the needs and strategies, the high cost of charging use of e-buses in the three countries with the highest infrastructure, misaligned electric rates, business e-bus penetration. Qatar acquired approximately 700 model adjustments, and reskilling of the labor force. e-buses ahead of hosting the 2022 FIFA World Cup. Owing to those factors, the adoption of electric Morocco has acquired over 150 e-buses, 138 of which buses has been slow worldwide.17 This is particularly were buses made in Morocco and deployed in the city 17 See World Bank, 2022. Electrification of Public Transport : A Case Study of the Shenzhen Bus Group https://openknowledge.worldbank.org/ handle/10986/35935#:~:text=Electrification%20of%20public%20transport%20provides,of%20public%20transport%20by%20residents. 3 • Current Status ofE-Mobility in MENA 17 of Kenitra. The Egyptian government procured about MENA region. Taxis in Morocco, Jordan, and Egypt 55 e-buses: 19 were deployed in a pilot program in are privately owned; both the lack of EVSE and high Alexandria and the remainder in Sharm El-Sheikh upfront vehicle costs impede e-taxi adoption. Through ahead of Egypt’s hosting the 27th Conference of the a 2016 initiative in Greater Amman, e-taxis were used Parties of the United Nations Framework Convention to service short-distance trips in downtown Amman. on Climate Change (COP 27). Jordan and United The fleet of 50 e-taxis operated for a year before Arab Emirates have relatively few e-buses, although being replaced with hybrids. As of today, there are Jordan’s capital city, Amman, is in the process of no e-taxis operating in Amman, although EVs are procuring 15 e-buses. increasingly common among ride-share services (e.g., Uber). Outside of Dubai’s fleet of 170 Tesla e-taxis, for the most part there are no e-taxis operating in the Mobile Cooling Optimizing mobile cooling electricity consumption needs, but also the substantial cooling requirements can save from 7 to 30 percent, not only on the for batteries and power electronics. This results in driving range of e-buses and e-taxis in Egypt, Jordan, significant reductions in the achieved driving range and Morocco, but also on respective charging during peak temperatures. All else being equal, the infrastructure and national grids. EVs operating in energy requirements for mobile cooling will require regions that experience hot seasonal temperatures more frequent charging and, depending on distance encounter difficult seasonal operating conditions. traveled, may require increased penetration of direct In hot weather conditions, mobile cooling needs current fast charging (DCFC) infrastructure relative to encompass not only passengers’ air conditioning other jurisdictions. Impacts of Urbanization and Informality on Public Transit In the MENA region, urbanization is highest in demand. In MENA countries, public transport networks the geographically small countries. For example, are largely underdeveloped, featuring a high level of urbanization is near or above 90 percent in Qatar, informality,18 which creates challenges for e-mobility Jordan, and the United Arab Emirates. However, in planning. In Morocco, for example, despite the high Morocco urbanization is below 70 percent and in Egypt demand for transport services, informal transportation it is below 50 percent. Lower urbanization may pose a provides an alternative to the old, poorly maintained challenge to electrification in larger countries. In Egypt, public transport and irregular frequency of routes. In Jordan, Morocco, the United Arab Emirates, and Qatar, Egypt, approximately 25,000 microbuses dominate even though they are highly urbanized, it has proved the urban passenger transport service in Cairo, difficult for public transport services to keep pace with with the public transport operator Cairo Transport 18 Jordan Public Transport Diagnostic and Recommendations, World Bank Group, February 2022. 18 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Authority (CTA) directly operating about 3,000 buses approximately 3,000 informal taxi-service operators and providing a further 1,900 buses to private sector and nearly 200 informal mini-bus (coaster) operators.20 concessions.19 In Jordan, it is estimated that there are Job Creation In 2021, Egypt, Jordan, and Morocco each had a Figures 3.3 and 3.4 summarize the electric passenger per capita gross domestic product (GDP) of less vehicle and e-bus value chains where e-mobility than $5,000. In 2021, unemployment rates for these jobs could be created. The value chain for electric countries ranged from 9.3 percent in Egypt to 19.3 passenger vehicles comprises power supply, vehicle percent in Jordan. 21 For these countries, among technology, EVSE technology, siting, installation and adoption benefits, the potential for job creation in operation of charge points, and customer service the e-mobility sector is an important consideration. (including value-added products and services). FIGURE 3.3. • Passenger Electric Vehicle Value Chain Location, Customer Power EV EVSE infrastructure and relation / Value Supply Technology Technology charging services added services • Energy supplier • Battery supplier • HW - Charging • Sites • Navigation, • Energy transmission & recycling stations • Installations Identification, & distribution • Mobile cooling • SW - Charging Reservation, Roaming • Technical operation supplier stations • Billing and • EV supplier Contract Mgmt. Utilities Charge Point EV OEM* EVSE OEM* Fleet Operator (Gen/TSO/DSO) Operator Source: Original compilation. FIGURE 3.4. • E-Bus Value Chain Location, Bus Fleet Public Power EV EVSE infrastructure Operator Transport Supply Technology Technology and charging Services • Energy supplier • Battery supplier • HW - Charging services • Bus fleet • Route planning • Energy & recycling stations • Sites • Operation • Passenger transmission • Mobile cooling • SW - Charging • Installations bus fleet services (B2C) & distribution supplier stations • Technical • EV supplier operation Utilities EV OEM* EVSE OEM* Depot Charging Fleet Operator Transport (Gen/TSO/DSO) Operator Company / City Source: Original compilation. 19 Egypt Country Deep Dive, Unlocking E-Mobility Development Potential in MENA. World Bank, 2023. 20 Jordan Public Transport Diagnostic and Recommendations. World Bank. 2022. 21 World Bank Data 3 • Current Status ofE-Mobility in MENA 19 4 • KEY FINDINGS FROM COUNTRY DEEP DIVES EGYPT, JORDAN, MOROCCO I t is worth noting that all three countries have The three countries differ, however, in the unique been included in the first batch of the World context in which transport electrification is being Bank Group’s Country Climate and Development carried out. Broadly, these contextual aspects can Reports (CCDRs) 22 for FY 2022. All CCDRs have be categorized into five groupings: (1) cross-cutting shed light on the importance of electric mobility aspects; (2) supportive strategies, policies and in contributing to decarbonizing transport regulations; (3) electric grid capabilities; (4) social, and promoting a broader energy transition economic, and environmental considerations; and underpinned by the electrification of major energy (5) stakeholder engagement. A summary of each systems (along with buildings and industry). country’s progress across these aspects is provided below. Cross-cutting Aspects Aspects that are present in all three countries include GHG Emissions Reduction Targets GHG emission reduction targets and a dependence All three countries have committed to 2030 GHG on the transport sector in achieving them, reliance emissions reduction targets. Jordan has committed on fossil imports, progress toward renewable to reducing its GHG emissions by 31 percent.23 generation penetration, lack of policies for mobile air Morocco’s Nationally Determined Contribution (NDC) conditioning, and challenging total cost of ownership targets a 45.5 percent reduction of its greenhouse (TCO) expectations. gas emissions compared to a business-as-usual 22 https://www.worldbank.org/en/publication/country-climate-development-reports 23 Jordan Country Climate and Development Report. World Bank. 2022. 20 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward scenario (BAU).24 Egypt targets mitigating 33 percent and its transport sector is the country’s main source of electricity sector emissions, 65 percent from the of air pollution and its largest contributor to energy associated gases subsector of the oil and gas sector, consumption. Jordan’s National Green Growth and 7 percent of transportation emissions against a Action Plan is aimed mostly at achieving reductions 2016 BAU scenario. 25 in emissions rather than reducing fossil fuel imports. In Morocco, synergies between the energy sector Prominent Transport Sector Emission and transport sectors are still developing. Although Reduction Targets Morocco continues to rely on imports for its supply, it is accelerating the development of renewable In all three countries, the reduction of transportation generation to reduce its dependence on fossil fuel sector emissions is a critical component of the overall imports for electricity generation. GHG reduction strategy. The number of private vehicles in Jordan nearly doubled between 2008 Penetration of Renewable Generation and 2018, and the transport sector is Jordan’s main consumer of fossil fuels. In Egypt, electricity and All three countries have achieved material levels transport are the only sectors with an upward growth of renewable generation. As of 2021, Egypt’s share trend in emissions; between 2005 and 2019, the of renewable energy (on a MW/h basis) stood at 12 transport sector emissions increased by 75 percent percent.26 By 2035, Egypt aims to supply 42 percent and accounts for 30 percent of energy consumption, of its energy through renewable generation. In 2020, making it one of the country's largest air pollution Jordan generated 73 percent of its electricity using emitters. In Morocco, the power sector is the largest natural gas and 26 percent renewable generation.27 source of emissions at 36 percent, followed by the In 2019, Morocco’s share of renewable generation transport sector at 29 percent . stood at 19 percent.28 However, the countries differ in thermal generation supplies. As of 2021, Egypt Reliance on Fossil Fuel Imports generated most of its electricity using natural gas. Morocco’s thermal electricity supply mix is almost To varying degrees, all three countries rely on fossil exclusively oil and coal.29 The fuel utilized in Jordan’s fuel imports, and none has materially explored thermal units is almost entirely natural gas with minimal reducing fossil fuel dependency as enabled by amounts of diesel and heavy fuel oil. Jordan, as the e-mobility. Despite energy policy reforms, transport smallest power system among the three countries, sector energy consumption in Egypt has continued is actively exploring options such as energy storage rising over the last few decades. Notably, Egypt has and universal rollout of smart meters to support more discovered new natural gas fields and the Cabinet is ambitious goals of renewables uptake. pushing a potential shift to compressed natural gas (CNG) vehicles rather than BEVs. Jordan, on the other hand, imports 92 percent of its energy requirements, 24 Morocco CCDR: http://hdl.handle.net/10986/38240 25 Egypt Country Climate and Development Report. World Bank, 2022. 26 Egyptian Electricity Holding Company 2020/21 Annual Report. 27 2021 Ministry of Energy and Mineral Resources Annual Report. 28 IRENA Renewable Energy Statistics 2021. 29 Morocco CCDR 4 • Key Findings fromCountry Deep Dives Egypt, Jordan, Morocco 21 Absence of Mobile Air Conditioning (MAC) interventions because vendors and suppliers have Policies not evaluated the business case. Like Egypt, Jordan has insufficient trained technicians to retrofit potential None of these countries have developed policies MAC interventions. Jordan also lacks defined targeting mobile air-conditioning (MAC) systems, processes for ensuring compliance with regulations, and the implications of mobile cooling on energy testing standards, and protocols. In Morocco, there demand requirements have not been formally are no standards and rules related to MAC air investigated. Supporting the MAC ecosystem requires pollutants; the deployment of energy efficiency in development. For example, in Egypt there is a lack the transport sector has yet to include measures of certified training and higher education curriculums and standards to limit the energy consumption of with a focus on MAC systems and efficiency. Egypt MAC systems and a thermal regulation code for MAC also has insufficient trained technicians to retrofit development is needed. potential MAC interventions. Jordan has limited market availability of efficient MAC technologies and Total Cost of Ownership (TCO) Analysis30 The economic proposition for customers adopting then discounted using a discount rate of 10% for the BEVs is an important aspect of the adoption conditions. financial TCO analysis, and 6% for the economic TCO Table 4.1 displays each country’s total cost of ownership analysis. The analyses presented in this report thus (TCO) for diesel, hybrid, and electric battery vehicles. offers an “as-is, where-is” view of TCO comparisons The costs are listed in USD per km. The results show across vehicle technologies as of 2022.31 that with the same useful life expectations, the TCO of EVs for all countries is expected to be higher than the The TCO analysis finds that, in the Egyptian context, TCO for other alternatives. e-buses are not yet attractive to operators from a financial perspective and will require sensibly The TCO analysis undertaken in this study considered designed interventions to unlock the potential. the costs of operating various vehicle technologies, on This is primarily due to the abundance and local a single, per-vehicle basis (with grid connection costs production of fossil fuels, making diesel and CNG- for buses and minibuses determined per vehicle, using fueled vehicles appear to be more efficient options. a hypothetical fleet size of 50 vehicles), as of 2022. From an economic perspective, the case for e-buses One-time capital costs (including vehicle, charger, and is stronger but not as clear-cut as CNG vehicles, grid connection costs) were based on 2022 prices, considering the additional nonquantified factors, while recurring costs (such as fuel or energy costs) such as additional grid connection and reinforcement assumed 2022 baseline prices, indexed with inflation costs, the greater complexity of implementation, and throughout the useful life of the vehicle. Costs were the reduced operational flexibility of e-buses. 30 Economic TCOs exclude inflationary indexation, financing costs and taxes, and factor in non-financial costs such as emissions and air quality. 31 This study's TCO analysis approach differs from that of the report "The Economics of Electric Vehicles for Passenger Transportation, World Bank, 2022. The 2022 report explores an alternative scenario for national country TCO analyses, whereby an illustrative national vehicle target of 30% of cars and buses, and more than 70% of 2W and 3W are electric, is mandated to be electric by 2030 (i.e., the “30x30 scenario”). The study thus compares the costs of a vehicle fleet that meets this 30x30 national policy against a “business as usual” scenario by 2030, where EVs evolve more organically and without an explicit policy to mandate their use. For more information on this analysis, please visit https://openknowledge.worldbank.org/server/api/core/bitstreams/5fb51e12-a3e7-58a8-943b-cd9afd2eb8e0/content 22 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward TABLE 4.1.A • Egypt Financial TCO Comparison for Bus Technologies Scenario Diesel Diesel Hybrid CNG Battery Electric Financial TCO per km results (USD/km) Base case fuel—Differential useful life 0.40 0.41 0.40 0.46 Base case fuel—Equal useful life 0.40 0.41 0.40 0.53 Higher fuel case—Differential useful life 0.43 0.43 0.40 0.46 Higher fuel case—Equal useful life 0.43 0.43 0.40 0.53 Source: Original compilation. TABLE 4.1.B • Egypt Economic TCO Comparison for Bus Technologies Scenario Diesel Diesel Hybrid CNG Battery Electric Economic TCO per km results (USD/km) Base case fuel—Differential useful life 0.53 0.52 0.44 0.43 Base case fuel—Equal useful life 0.53 0.52 0.44 0.47 Higher fuel case—Differential useful life 0.57 0.55 0.44 0.43 Higher fuel case—Equal useful life 0.57 0.55 0.44 0.47 Source: Original compilation. In contrast, as Jordan is a heavy importer of fossil to 12 years. In Jordan, to reap the TCO benefits of fuel at high oil prices, the TCO of EVs is much more e-buses, the key is to ensure appropriate regulatory competitive. The results for Jordan show that with a and commercial arrangements, so the operational life useful life of 15 years for the BEV versus 12 years for of e-buses can be maximized, consequently reducing diesel and hybrid vehicles, the BEV has the lowest the TCO. In all scenarios, the economic TCO of EV TCO (0.48) under both the Base and High fuel cost buses comes out lower than its ICE counterparts. scenarios (table 4.2). Again, the BEV is not expected Also, not surprisingly, when socioeconomic factors are to have the lowest TCO if its useful life is reduced considered, the benefits of EVs are more pronounced. TABLE 4.2.A • Jordan Financial TCO Comparison for Bus Technologies Scenario Diesel Diesel Hybrid Battery Electric Financial TCO per km results (USD/km) Base case fuel—Differential useful life 0.50 0.49 0.48 Base case fuel—Equal useful life 0.50 0.49 0.55 Higher fuel case—Differential useful life 0.55 0.53 0.48 Higher fuel case—Equal useful life 0.55 0.53 0.55 Source: Original compilation. 4 • Key Findings fromCountry Deep Dives Egypt, Jordan, Morocco 23 TABLE 4.2.B • Jordan Economic TCO Comparison for Bus Technologies Scenario Diesel Diesel Hybrid Battery Electric Economic TCO per km results (USD/km) Base case fuel—Differential useful life 0.72 0.67 0.58 Base case fuel—Equal useful life 0.72 0.67 0.62 Higher fuel case—Differential useful life 0.80 0.73 0.58 Higher fuel case—Equal useful life 0.80 0.73 0.62 Source: Original compilation. TABLE 4.3.A • Morocco Financial TCO Comparison for Bus Technologies Scenario Diesel Diesel Hybrid Battery Electric Financial TCO per km results (USD/km) Base case fuel—Differential useful life 0.68 0.65 0.54 Base case fuel–Equal useful life 0.68 0.65 0.63 Higher fuel case–Differential useful life 0.76 0.71 0.54 Higher fuel case–Equal useful life 0.76 0.71 0.63 Source: Original compilation. TABLE 4.3.B • Morocco Economic TCO Comparison for Bus Technologies Scenario Diesel Diesel Hybrid Battery Electric Economic TCO per km results (USD/km) Base case fuel—Differential useful life 0.91 0.82 0.54 Base case fuel–Equal useful life 0.91 0.82 0.58 Higher fuel case–Differential useful life 1.03 0.92 0.54 Higher fuel case–Equal useful life 1.03 0.92 0.58 Source: Original compilation. Morocco’s results indicate that with a useful life of regulatory and contractual factors would then be 15 years for the BEV versus 12 years for diesel, the important in determining the actual TCO for e-buses BEV has the lowest TCO (0.54) under both the Base in Morocco. A switch to e-buses could potentially be and High fuel cost scenarios (table 4.3). Like Jordan, financially attractive for a Moroccan-based operator. 24 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Supportive Strategies, Policies, and Regulations All three countries have established emissions on car parts imports. Jordan anticipates a 50 percent reduction targets in which the transportation sector share of electric vehicles in the public fleet by 2030.33 plays a role. Egypt has defined clauses related Egypt expects a 14 percent share of new private LDV to e-mobility within the 2050 National Climate sales to be electric by 2025, 36 percent by 2030, Change Strategy. Jordan has established a bold and and 50 percent by 2040. To serve these vehicles, ambitious environmental agenda which has played a Egypt seeks to install 1,250 public charging points by role in setting national and sectoral targets. At sub- 2030 and 3,100 by 2040, as well as 34,000 private national level, the municipality of Amman also has charging points by 2030 and 400,000 by 2040. announced city-level EV targets in its Climate Action Plan32. Morocco has ambitions and commitments to Only Egypt has so far promulgated an explicit reduce GHG emissions, in which e-mobility plays a e-mobility strategy. In fact, Egypt was one of the significant role. first MENA countries to do so. Although efforts are ongoing, Jordan has not yet because Morocco Launched in 2019, Egypt’s E-Mobility Strategy launched the e-mobility action plan. Jordan has issued emphasizes strengthening local manufacturing and several strategy documents listing initiatives and targets increasing the market share of private EVs in projects related to e-mobility; it has also embarked Egypt to 50 percent by 2040. Additionally, in advance on coordinated efforts across all main entities to of Egypt’s hosting of COP-27, the Egyptian government develop a National E-Mobility Strategy34. Morocco's deployed additional BEV and CNG vehicles across National Sustainable Development Strategy includes Sharm el-Sheikh to promote the government’s efforts promoting sustainable mobility through improved toward the adoption of reduced transportation sector energy efficiency in the transport sector. emissions in its climate action plan. Egypt is seeking to reduce energy sector emissions by 10 percent and Three policy pillars support Egypt’s e-mobility decrease the share of oil and gas in the total fuel mix strategy: (1) penetration of charging infrastructure; from 91 percent to 27 percent. (2) the rehabilitation of the government fleets; and (3) locally sourced technology. Jordan has multiple All three countries have some targets in place to relevant sectoral and cross-sectoral policies for increase BEV adoptions. By 2030, Morocco seeks to transportation, energy, and the environment, including have a 10 percent market share of passenger BEV components that mention e-mobility. and a 100 percent market share of e-buses and taxis. The National Master Plan for Electric Mobility sets the All three countries have issued regulations supporting country an annual target of 1 million EV units, with e-mobility. Egypt has enacted several regulations other targets involving boosting the country’s supply related to BEVs. These include a value-added tax chain for EV manufacturing to minimize dependency (VAT) exemption (2019), an electricity tariff (2022), 32 https://documents1.worldbank.org/curated/en/816961617187012025/pdf/The-Amman-Climate-Plan-A-Vision-for-2050-Amman.pdf 33 World Bank, 2022. Jordan Country Climate and Development Report (CCDR) https://openknowledge.worldbank.org/server/api/core/ bitstreams/7c81ff9b-6f43-5648-be15-b2e2b25d1d33/content 34 The effort on formulating a National E-Mobility Strategy in Jordan is currently being led by the Ministry of Energy and Mineral Resources (MEMR), with the support from World Bank’s joint infrastructure team (energy, transport, digital and finance). 4 • Key Findings fromCountry Deep Dives Egypt, Jordan, Morocco 25 passenger BEV licensing requirements that conform type of public charger and has defined the minimal to passenger ICE requirements (2021), and regulations technical requirements of EVSEs. In Morocco, the regarding licensing of charge point operators (CPOs). Autorite Nationale de Regulation de l’Electricite Jordan’s regulations include license requirements (ANRE) is the main organization regulating Morocco’s for installers of EVSE; requirements for managing grid access and electricity management. No specific electric and electronic waste, including batteries; standards regarding charging infrastructure have yet and reduced taxes on BEVs, batteries, elimination been put in place. of a weight tax (because EV batteries are extremely heavy components), and the addition of a 4 percent The readiness of the distribution grid to accommodate tax on the total value of the vehicle which decreased increased uptake of e-mobility is expected to be BEV prices to the customer. Morocco’s regulations to an important issue as charging loads grow. For incentivize BEV adoption are centered on improving example, Egypt’s distribution grid suffers constraints the customer economic proposition and include a VAT particularly during summer, driven by the high exemption and a reduction in BEV registration costs. utilization of air conditioning units and resulting transformer overloads. Egypt is not expected to be Electric Grid Capabilities able to integrate high penetrations of BEVs absent upgrades to the distribution grid. Because BEV charging will increase electricity usage, installed generation capacity can be an important Egypt and Jordan have both issued electricity tariffs issue to the extent timing of BEV charging cannot be specific to BEV charging. Egypt has established an controlled. None of the three countries is expected electricity tariff defining a pricing scheme for public to experience generation capacity shortfalls. e-buses and private BEVs. Egypt has also developed Egypt experiences peak electricity demand of regulations for the construction and licensing of approximately 32 GW and enjoys a reserve margin charging stations. Jordan has imposed a charging exceeding 60 percent (20 GW). Egypt’s electricity tariff, updated each month, for BEV at public charging demand has grown at a rate of 4 percent per year. stations. Morocco has not yet set a specific electricity Jordan’s installed generation capacity is 5.4 GW and tariff for EV charging. Jordan also enjoys a relatively high reserve margin (roughly 33 percent). Jordan’s electricity demand Social, Economic, and Environmental growth rate is 3 percent. Morocco is experiencing a 6 Considerations percent demand growth rate but has so far been able New jobs in a wide range of activities are expected to serve this growing demand. to be created by the e-mobility sector. Among these, vehicle manufacturing has promised to both increase EVSEs are expected to connect at distribution voltages, employment and reduce a country’s dependence yet only Jordan has issued regulations specifying on imported vehicles and EVSE. Both Egypt and grid access for EVSEs. Egypt’s Organization for Morocco have developed a clear strategy for local Standardization (EOS) has published specific technical manufacturing with the aim of creating new jobs, new standards, however, grid codes and building codes skill sets, and reducing their reliance on imported are still missing. Jordan regulates the site schematic, products. Morocco desires to play a leading role in EV electricity connection, and safety measures of any 26 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward manufacturing. In Jordan, e-mobility could offer a way automotive and fossil fuel industries. To guarantee of creating more socio-economic benefits including that the shift to e-mobility is as seamless as possible more job opportunities, but the exact potential needs and that workers are supported during the transition, to be carefully assessed in detail given the small size governments, businesses, and employees must be of its economy, and the lack of manufacturing capacity. aware of these developments and collaborate. To assist workers in making the shift to new positions On the one hand, the growth of the EV market and in the expanding e-mobility sector, this could entail the infrastructure for charging them can lead to the retraining programs through train-the-trainer (TtT) creation of new jobs in industries like manufacturing, programs, investments in new technologies, and engineering, installation, and maintenance. Jobs in other types of support. the automotive and energy industries, for instance, may be created by the production of EVs, batteries, It is difficult for governments to mandate the adoption and charging stations. Additionally, the construction of ZEVs for personal use. Therefore, customer and electric industries may see an increase in awareness and enthusiasm for these types of vehicles employment due to the installation and maintenance are critical components of the adoption equation. of charging infrastructure. Lack of awareness is an issue in all three countries. In Egypt, knowledge among the general public about On the other hand, as the demand for ICE vehicles remains very basic. In Jordan, the government has declines, the transition to e-mobility may also lead developed communication campaigns to educate to employment losses in the traditional automotive the public about the newly launched bus rapid and fossil fuel industries. For instance, if the demand transit (BRT) network and promote the use of public for gasoline declines, people in the oil and gas transportation. However, no promotional materials industry may lose their jobs, and as the production focus on the benefits of e-buses and e-taxis. Several of ICE vehicles declines, workers in the ICE vehicle user communities and groups on social media have manufacturing industry may also lose their jobs. been working on promoting BEVs, raising awareness and sharing issues related to troubleshooting vehicle It is worth noting too that the transition to e-mobility problems to encourage the public to adopt EVs. can potentially indirectly affect jobs. For instance, the The limited public knowledge about BEV benefits creation of charging stations can lead to new jobs in is considered to play a role in delaying e-mobility the electric and construction professions; the greater progress in Morocco. In Egypt and Jordan, involved usage of EVs could encourage innovation, R&D, and stakeholders understand the emissions reduction development in the automotive and energy industries, benefits surrounding e-mobility and its role in resulting in the creation of new, highly skilled jobs. supporting the achievement of emission reduction In conclusion, the switch to e-mobility has the potential targets as per the Paris agreement. to affect employment (creating / destroying) in the Range anxiety and the high up-front cost of BEVs are economy in both direct and indirect ways. While the the most important factors limiting BEV uptake. This transition to EVs and charging infrastructure has the is true in Egypt, where most customers do not see potential to generate new employment opportunities, the benefits of choosing BEVs over ICEVs for use as it also carries the risk of job losses in the existing passenger cars or taxis. In Morocco, the high upfront 4 • Key Findings fromCountry Deep Dives Egypt, Jordan, Morocco 27 cost of BEVs offsets other economic benefits and is transport, building heating and cooling) with the therefore likely to limit growth in e-mobility in the near energy production sectors. In Egypt, there has term. been initial interest in emphasizing the role of the transport sector and resource efficiency in energy Stakeholder Engagement sector planning. In Jordan, sector coupling has been adopted by MEMR through the creation of In all three countries, there is a lack of coordination a ministerial-level committee with representatives among e-mobility stakeholders thus far, although from different sectors, such as transport, energy, and progress is being made with the facilitation of environment. development partners35. In Egypt, the Ministry of Military Production (MoMP) and the Ministry of Public Charging station deployment remains nascent in Business Sector (MoPBS) have been designated by all three countries. With multiple CPOs and a tariff the Cabinet as the parties responsible for e-mobility structure in place, the BEV market in Egypt enjoys issues, however, there is still a lack of proper a reliable charging network with more than 150 orchestration and coordination among different public charging stations. However, in the market, stakeholders involved in the ecosystem. In Jordan, the presence of a mobility service provider (MSP) is work related to e-mobility has been fragmented lacking to handle contracting and customer service. across multiple institutions in the government. The Currently, BEVs are imported, and the market lacks Ministry of Energy and Mineral Resources (MEMR) has the presence of authorized BEV dealerships. taken the initiative to coordinate various efforts and a working group has been formed with representatives There are approximately 34 public charging stations in from key entities at both national and municipal Jordan that are owned by different entities, however levels. In Morocco, many stakeholders are involved the limited number of public charging stations is in the e-mobility sector on the institutional level, insufficient, and there is a lack of technical expertise including ONEE and IRESEN from the energy side, to service BEVs. The situation in Jordan is expected and the ministries of transport and interior. However, to improve as the penetration of EVs in vehicle no specific entity leads the centralization of all actions stock recently reached 2 percent and there is more and policies toward e-mobility development. interest from potential investors to enter this market. Although electricity tariffs for charging are yet to be There have also been efforts in Egypt and Jordan announced, Morocco benefits from more than 100 at sector coupling, or proactively interconnecting public charging stations and is aiming to encourage energy-consuming arenas (primarily, industry, the development of CPOs. 35 The World Bank has been leveraging its convening power to facilitate coordination across sectors and entities to accelerate e-mobility agenda in all three countries. 28 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward SWOT Analyses The strengths, weaknesses, opportunities and threats analyses for the three countries are presented in figures 4.1, 4.2, and 4.3 FIGURE 4.1. • SWOT for Egypt STRENGTHS WEAKNESSES Nearly non-existing passenger EV market (below 1000 Defined strategy with outlined policy pillars and EVs) due to high price of EVs and lack of soft incentives national targets until 2040, under the leadership of and loans to attract consumers dedicated ministry in the Cabinet Lack of qualified local workforce Political willingness to adopt e-mobility Long operational hours and long travel distances of the Established charging infrastructure with more than 250 CTA bus network, rendering electrification of transport charging points operated by various CPOs fleet unreasonable due to operational constraints High security margin owned by the generation surplus Mobile cooling considerations are hardly allowing penetration of EVs (on the operational level) considered/acknowledged Regulation on the Licensing of CPOs and EV charging Lack of coordination/orchestration between tari s was issued in early 2022. involved stakeholder The high level of electricity Distribution losses might impact the overall e ciency of e-mobility, and reduce the emission reduction benefits SWOT OPPORTUNITIES THREATS Synergy with RES given the attractive irradiance Given the high generation surplus (20 GW), conditions, which would also elevate the stress on the electrification of the transport fleet is expected to be electrical grid powered from fossil fuels (electricity generated from combined cycle power plants) A re-organization of the route network of the CTA, since it is a pre-requisite for electrification The government, driven by domestic gas availability compared to partial imports of liquid fuels, Creation of new jobs, and reducing unemployment rate, encouraged the switch to CNG vehicles and building since Egypt’s driver for e-mobility adoption is focused CNG fueling infrastructure by public and private on localizing the technology energy companies. This gives conflicting signals to the market on the government policy whether it is Successful pilot implementation of E-buses during encouraging CNG or EVs COP27 through a PPP, which will be replicated in the new Capital and other cities The MV and LV networks might not have been equipped to accommodate high penetration of EVs Source: Original compilation. 4 • Key Findings fromCountry Deep Dives Egypt, Jordan, Morocco 29 FIGURE 4.2. • SWOT for Jordan STRENGTHS WEAKNESSES Strong environmental/climate change agenda at the Inconsistent regulations on e-mobility, specifically with national and municipal levels regards to taxis and duties on passenger EVs Relatively high degree of awareness on e-mobility, given Lack of strong institutional leadership among the the increasing adoption of passenger EVs (at least when various entities to carry forward the e-mobility agenda taxes and duties were low) Lack of qualified local workforce High security margin owned by the generation surplus Delays in obtaining approvals, taxes and customs on allowing penetration of EVs (on the operational level) importing chargers, and an imposed markup on charging tari s have contributed to limiting the growth of charging infrastructure Mobile cooling considerations are hardly considered/acknowledged SWOT OPPORTUNITIES THREATS Recent transport legislations have paved the way for the consolidation of individual operators, which can be thought of as a pre-requisite for electrification Short-term financial considerations (related to maintaining/ Upcoming introduction of new transport services, such increasing government income from fuel taxes) may limit as Amman BRT Phase II, which present opportunities for serious e orts to scale up the adoption of e-mobility electrification Potential limitations in the MV and LV networks that could Synergy with RES given the current surplus and attractive limit the penetration of EVs irradiance conditions, which would also elevate the stress on the electrical grid Without the right upskilling programs, there is a risk of jobs being lost, especially in services related to ICE vehicles Creation of new jobs, and reducing unemployment rate, given Jordan’s relatively high unemployment rate, especially among youth and women Source: Original compilation. 30 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward FIGURE 4.3. • SWOT for Morocco STRENGTHS WEAKNESSES Political willingness to adopt e-mobility through Lack policy clarity, where regulations, policies, and laws are various national and sectoral strategies announced/developed through top-down Nearly non-existing passenger EV market due to high price of Strong environmental/climate change agenda at the EVs and lack of soft incentives and loans to attract consumers national level Lack of qualified local workforce High degree of awareness on e-mobility at the national level Absence of a regulatory framework on e-mobility and sale of energy by charging station operators Strong Renewable Energy Program, with the goal of reaching 52% share on electricity capacity by 2030 Limited awareness among the general public about EVs Mobile cooling considerations are hardly considered/acknowledged SWOT OPPORTUNITIES THREATS The attractive automotive industry market with the goal of leading at a regional level Renewal programs for taxis can accelerate e-mobility adoption The state high income from fuel taxes, and the ecosystem built on the fuel sector, can limit the Recent transport fleet and management restructuring, development of e-mobility allowing for easier e-mobility penetration for buses and BRT projects. The MV and LV networks are not equipped to accommodate high penetration of EVs Creation of new jobs, and reducing unemployment rate, since Egypt’s driver for e-mobility adoption is focused on localizing the technology Source: Original compilation. 4 • Key Findings fromCountry Deep Dives Egypt, Jordan, Morocco 31 5 • CHALLENGES AND MITIGATION STRATEGIES TO ADVANCE E-MOBILITY IN MENA T he challenges to e-mobility in the MENA region these challenges can be leveraged for application in are often seen in other jurisdictions globally. the MENA region to facilitate robust penetration of International best practices in addressing private and public transit EVs. Reliance on Third Parties to Install Infrastructure Challenge Mitigation Certain MENA countries have relied on third parties MENA governments could consider funding a to install charging infrastructure, resulting in fewer minimum level of Level 2 and direct current fast charge points deployed relative to national targets, charging (DCFC) infrastructure so that lack of as well as a lack of standardization and quality infrastructure does not impede BEV adoption. assurance. This is because the economic proposition Once adoptions have gained momentum, third of operating public charging stations, and particularly party installers will have incentives to deploy public DC fast charging, is difficult when BEV adoption is low, charging stations economically. Governments should and third parties will be reluctant to deploy electric also be proactive in providing clarity on standards vehicle service equipment (EVSE) until adoption regarding interoperability, preparing the stage for levels are higher. Third party operators may also not private sector to come in. Recognizing that financing have the incentives to ensure the maintenance of could be challenging for fiscally stretched countries, EVSEs and interoperability. governments could actively explore concessional financing targeted at green initiatives and risk mitigation mechanisms (such as guarantees). 32 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Cost of Electrifying Transit Fleets Challenge Mitigation The electrification of public transit is costly. In MENA governments should consider seeking external addition to the cost of e-buses and e-taxis, charging support for e-bus and related infrastructure investments infrastructure must be installed, and smart charging where possible. For example, Jordan’s Amman capabilities developed. Furthermore, in future, depots municipality received funding from the European Bank will be connected to several different data streams, for Reconstruction and Development (EBRD) and the both internal to the depot (which will collect charger Green Climate Fund (GCF) for the procurement of a data, energy systems data, and depot operations fleet of 15 e-buses. Appropriate electric rate design data) and external to the depot (linking with energy and smart charging can help reduce the cost of markets). Integrating this complexity of data requires electricity used to charge the buses. Governments planning and consideration, however the benefits of may consider implementing mandates to replace integrating digital management systems will include aging vehicles with e-taxis or other e-mobility vehicles the potential to reduce electricity costs through off- in regions where taxis or other public transit vehicles peak charging and demand charge management, are privately owned. Moreover, the actual costs and as well as reduced infrastructure costs, and better risks to which the governments are exposed also understanding of vehicle energy requirements. depend on the contemplated business models and contractual arrangements, and governments could proactively explore alternative options and negotiate the best arrangements with potential providers. Limited Stakeholder Participation Challenge and charging infrastructure lack consideration of the impacts and opportunities related to the overall A common theme from vehicle electrification efforts in e-mobility ecosystem. other jurisdictions outside of the MENA region is that coordination across interdisciplinary stakeholders is Mitigation necessary. The countries’ deep dive analysis yields a similar conclusion. Stakeholders tend to operate Coordinated interdisciplinary efforts are necessary to in silos, with little to no coordination or orchestration achieve vehicle electrification objectives successfully. of efforts. Many policies are developed using a top- Proactive coordination among all stakeholders is a down approach with no input from entities that will key step (figure 5.1). Policies should be informed by actually be involved in implementing the policies careful consideration and coordination of all aspects or acting as institutional champions. Furthermore, of this diverse ecosystem. efforts focused on expanding penetration of BEVs 5 • Challenges and Mitigation Strategies to Advance E-Mobility in MENA 33 FIGURE 5.1. • E-bus Stakeholders What? Assets/Services Charging infra E-bus fleet Bus depot Who? Stakeholders OEMs Power Utility Operator Government Financiers How? Responsibilities Procurement Supply Maintainance Financing Source: Original compilation. Arenas for coordination include: be facilitated by development of appropriate • Energy sector planning: The overarching energy standards. While the considerations on smart transition underpinning electrification of transport charging and flexible loads may appear futuristic must be recognized in energy sector long-term for certain MENA countries, disruptive technology planning; the fuel switch from fossil sources to changes could take place swiftly and utilities (or renewable power should be reflected in sector aggregators) need to plan ahead to develop modeling both technically and financially. “future-proof” solutions. • Transport policy: E-mobility could be a • Urban Planning: Siting of EVSE infrastructure in cornerstone in achieving a sustainable transport locations where it is most needed is a priority in system and the transportation sector should be the early years of BEV adoption. adapted to facilitate BEV penetration. • Climate policy: Fossil fuels in mobility applications • Electricity Sector Regulation and Standards: must be replaced with electricity generated from Electricity rate structures, and the distribution grid renewable resources, other low-carbon fuels, or impacts of the DCFCs, in particular, are important a combination. It is critical, therefore, that buildout aspects that must be addressed to ensure of renewable generation is accelerated. successful BEV economics. When paired with a • Training for future jobs: Jobs associated with smart charging program, BEVs can act as mobile the repair and maintenance of ICE engines will storage devices providing critical services to the be replaced with opportunities in the e-mobility grid, such as integrating renewable generation sector, and (re)skilling of the workforce is needed and grid support. Vehicles and EVSEs should to cope with this transition. include smart charging capabilities. This can 34 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward Successful adoption of e-mobility, requires private sector participation, along with public- stakeholders to integrate all aspects of e-mobility in private partnerships (PPPs), to best support planning through: e-mobility uptake and innovation in e-mobility • Establishment of a forum for coordinating and related policies; activities and knowledge exchange, including • Developing a supportive framework for BEV clear communication of the policy vision to customers, including digital end-to-end customer ensure a common strategy among stakeholders; experience and enhancing access to charging • Fostering strategic partnerships and enabling services. Economics of BEV Adoption Challenge economic proposition of BEV adoption. These may include rate structures that provide a reduced cost The economics of BEV adoption is driven by the costs for charging vehicles during off-peak hours which of vehicles, infrastructure, and electricity, balanced could minimize the impact of any applicable demand by the avoided cost of owning and operating an charges during the early years of adoption when ICE engine vehicle and requisite fuel purchases. load factors at public charging stations are low. Egypt Egypt, Jordan, and Morocco import nearly all of their and Dubai implemented a detailed electricity tariff gasoline supplies. for BEVs. The lack of dedicated BEV rates in other countries may increase the cost of operating BEV in Opportunities these jurisdictions. Smart charging is another strategy to reduce charging costs. Electricity rate structures can also support the Balancing the reduction in levies collected from fuel for ICE vehicles Challenge Mitigation As many of the MENA countries are in a financial To mitigate this, countries in the region will need to find crunch, for the transition to e-mobility the countries new sources of revenue to diversify their economy, or also need to balance the reduction in levies collected find ways to reduce government spending, to balance from fuel for ICE vehicles. Many countries in the region the budget and ensure a successful transition to rely on the revenue generated from fuel taxes to e-mobility. This will require a well-thought-out and support their economies. As the number of EV starts comprehensive policy approach, which considers the its exponential uptake, there will be a corresponding economic, social, and environmental impacts of the decrease in the amount of fuel taxes collected, which transition. could put a strain on government budgets. 5 • Challenges and Mitigation Strategies to Advance E-Mobility in MENA 35 Distribution System Constraints Challenge Line overloading is solved with distribution line upgrades. Control of vehicle charging (smart Charging infrastructure will be primarily located on charging) can reduce electricity demand during the medium- and low-voltage distribution grids. In charging sessions and thus prevent transformer and certain countries in the region, distribution networks line overloads from occurring. may require upgrades to accommodate the power needed for charging. Level 2 charging commonly Mitigation draws 7 kW to 22 kW. It is popular for home and work charging of BEVs, as well as in public spaces In some jurisdictions, utilities have provided data with longer dwell times such as malls, cinemas, indicating distribution grid locations with sufficient parks, hotels, and tourist attractions. As BEV battery capacity to accommodate EVSEs. Siting EVSEs in capacities increase, higher charging capacity EVSEs these locations can reduce network upgrade costs, have become preferable. DCFC draws at least 50 thereby improving the economic proposition for kW-dc and can exceed 350 kW-dc. It is the preferred charging station owners, and can reduce the need technology when charging must be carried out for costly transformer and distribution line upgrades quickly, such as on highways, in petrol stations, and that may be borne by the utility. for public transit fleets and rental car depots. For commercial customers, in some cases interruptible Smart charging (V1G) and vehicle-to-grid (V2G) rate structures or limits on charging capacity have services can potentially provide a number of grid been used to protect local networks with limited benefits, including the provision of ancillary services capacity while providing additional economic benefits (such as frequency regulation, voltage regulation, via lower electricity costs. peak shaving, load leveling, and spinning reserve), congestion mitigation, and renewable energy As in many other areas of the world, local distribution storage. Ensuring smart charging capabilities across network operational constraints may limit the extent utility and third-party communication technologies of electrification, absent network upgrades or other and equipment standards is an important issue that controlled charging capabilities. When loads peak MENA governments should proactively support now, on the distribution grid, transformer overloading and so that these capabilities are well established as voltage issues can arise. Transformer overloading is vehicle charging loads grow. resolved with the installation of larger transformers. Climate Impacts on Battery Range Challenge for increased BEV cooling loads that give rise to decreased BEV range. MAC systems impose a Hot summer temperatures in the MENA region multifaceted challenge. In hot weather, as significant and other areas in the world have implications energy demands are imposed on the vehicle battery 36 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward for cooling the passenger cabins of electric buses, Mitigation cars, and taxis, reducing the available residual The deep dive on mobile cooling that was carried out in energy in the battery system for propulsion and the Assessment of Efficient and Clean Mobile Cooling consequently, the driving range. The range reduction Opportunities in Electric Vehicles, addresses these due to mobile cooling is exacerbated during traffic shortcomings for the MENA region systematically congestion when the air conditioning loads persist by considering local and regional context, global through intermittent traffic flows. best practices, and recommended pathways for the Mobile cooling in conventional vehicles utilizing future. Seventeen options for mitigating the adverse internal combustion engines is highly energy intensive MAC impacts during the summer are summarized in consuming about 1040 TW/h annually, corresponding figure 5.2. These interventions, technologies, and to about 6 percent of global passenger transport measures have been selected based on opportunities energy use. In BEVs, the high energy consumption 36 documented in case studies and global best practices of MAC systems exacerbates battery capacity issues showing promising reductions in the energy footprint as the battery storage system must power the for mobile cooling loads. The MENA governments full range of BEV functions, including traction and should adopt policies mandating that BEVs operating accessory loads, as well as cooling. in the region require specific MAC technologies. TABLE 5.1. • Options for Mitigating the Adverse MAC Impacts During Summer 1 Windows glazing 7 Refrigerant leakage prevention 2 Zonal cooling 8 Solar reflecting paint 3 Seat cooling 9 Default recirculation controls TI Technical Interventions 4 Heat exchanges 10 Condenser Subcooling 5 Product temperature simulant 11 Secondary loop + R152a refrigerant 6 Demand controlled optimization 1 Magnetocaloric air conditioning Alternative & Innovative AIT 2 Thermoacoustic air conditioning Technologies 3 Vacuum-cooled water refrigeration 1 Preconditioning NTM Non-technical Measures 2 Shaded Parking / Charging 3 Ride sharing Source: Original compilation. 36 IEA. “Cooling on the Move: the future of air conditioning in vehicles”. September 2019. Available at https://www.iea.org/reports/cooling-on-the-move 5 • Challenges and Mitigation Strategies to Advance E-Mobility in MENA 37 Operational Constraints for E-Buses Challenge part of the route network may be necessary. In China, the city of Shenzhen, which electrified its entire bus A successful scale-up of e-bus operations requires network,37 redesigned its network around the limitations sufficient numbers of e-buses as well as an adequate and needs of e-buses. This reorganization involved charging infrastructure to maintain service throughout harmonizing the network into shorter routes, which the year. Infrastructure, if not planned properly, still provide value to the passenger through a network can quickly become costly, further intensifying logic but are ultimately easier to electrify. Redesigned the challenge of scaling up. The Egypt deep dive routes might furthermore necessitate a digital payment highlights insights gleaned from the analysis of nine system that facilitates the introduction of a single fare Cairo Transport Authority routes. Long operational that allows passengers to make multiple journeys hours and long travel distances require large- over a period using one ticket. This contrasts with the capacity batteries, or an alternative clean fuel source current single-ticket fare structure, which discourages such as hydrogen. Furthermore, battery capacity users from taking several modes of transport and must be sufficient to serve bus routes during the changing between routes. In Amman municipality of hottest summer months, when energy consumption Jordan, the transport planning department is already increases, while remaining within safe operational actively looking to digitally integrate various modes of limits. A simple technical solution would be to double transportation using smart solutions. the number of buses, however, this solution is not economically optimal. Redesigned routes and electrified routes would benefit significantly from congestion protection Mitigation through dedicated bus lanes and priority intersection treatment. This in turn would allow the adoption of a As battery technology improves, the range of e-buses scheduled service with preplanned charging times. is expected to grow. Nonetheless, reorganizing of all or Charging Strategy—Public Transport Challenge infrastructure and limited battery weight as compared to depot charging overnight. This solution, however, Choosing the right charging strategy is an important may present serious challenges in MENA's non-Gulf decision in the early stages of the planning process Cooperation Council (GCC) countries: of electrifying public and private transport fleets. When bus routes are conducive to opportunity • An absence of dedicated bus lanes for regular (non-BRT) buses can impede e-bus access to charging, many developed countries opt for this opportunity charging locations. charging method due to its high utilization of charging • Where there are no dedicated bus stops, the 37 Electrification of Public Transport: A Case Study of the Shenzhen Bus Group. World Bank, 2021. 38 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward bus driver stops when (1) passengers on the battery is higher in comparison than that of e-buses street request it; or (2) when a passenger in the that require charging opportunities and have a small bus requests to exit (particularly for seniors and battery capacity. However, the operation of the central females). charging infrastructure is much easier to maintain than a complex decentralized charging infrastructure. Mitigation Further, the operating cost for opportunity charging is higher because longer charging periods at dwell- Figure 5.2 illustrates, a key trade-off: investment time depots can be managed to minimize common in charging infrastructure (fast charging) versus demand charges for large commercial customers. investment in larger capacity batteries (longer range). For example, the cost of e-buses with a high-capacity FIGURE 5.2. • Design Considerations for E-bus Charging Strategy High investment in High investment in charging infrastructure e-buses / batteries High operational cost for complex Limited operational cost for depot opportunity charging infrastructure charging infrastructure Limited costs for e-bus with Limited initial costs for depot low battery capacity charging infrastructure Design Considerations Opportunity Charging Depot Charging Source: Original compilation. 5 • Challenges and Mitigation Strategies to Advance E-Mobility in MENA 39 Charging Strategy—Private Passenger BEVs and E-taxis Challenge charging spot. It is not typical for these homes (especially considering the demographics of taxi For e-taxis and private BEVs, charging can be carried owners or drivers) to have a dedicated garage where out during the day or overnight. Fast charging is the vehicle can be charged. required to reduce the total charging time to a period of minutes instead of hours, which is essential Mitigation to extending the taxi driving range between trips. Charging at longer dwell time locations can occur Governments can support private charging of e-taxis via public charging stations in locations such as at by supporting the deployment of publicly accessible workplaces, shopping malls, overnight at private fast charging in appropriate locations. Governments homes, or at charging depots in the case of e-taxi can also support the penetration of charging fleets. Not all charging strategies are applicable infrastructure in long dwell time locations such as in the MENA region. For example, taxis in Jordan points of interest and in residential areas where are generally owned by individuals. The owner or overnight charging may not be accessible, such as driver of the vehicle typically takes it home at night multifamily buildings. and does not necessarily have a dedicated public Job Creation Challenge and adjacent industries. Core automotive industries are focused mainly on the manufacturing side of the The net job creation that may result from the e-mobility sector while adjacent industries focus on e-mobility transition in MENA has not yet been the provision of infrastructure and services. The study studied and international data is inconsistent. Critics found that in Europe, only minimal net job creation often state that the transition to e-mobility could was expected in the coming decade, resulting in produce a heavy loss in the traditional automotive some sectors gaining material numbers of jobs and ecosystem, however, the European Association of others with job attrition. Electricity Contractors,38 in a 2018 study, found that the transition would create twice the number of jobs Mitigation lost by the traditional automotive sector. A recent study published by Boston Group Consulting39 Depending on the local configuration of value identified 26 different industries that would benefit chains, the e-mobility transition could present a from the e-mobility transition. The study categorized vital opportunity to foster job creation in the MENA these industries into two groupings: core automotive region. However, this job growth is not expected 38 https://europe-on.org/ 39 Boston Consulting Group (2020) Is e-mobility a Green Boost for European Automotive Jobs? Online: https://www.bcg.com/ is-e-mobility-a-green-boost-for-european-automotive-jobs 40 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward to be uniform across the e-mobility ecosystem. In battery manufacturing facility40. Various countries in the coming decade, e-mobility job creation can the GCC area and North Africa, including Morocco be supported through workforce training and and Egypt, have begun exploring various initiatives to investments in promising new industries such as produce green hydrogen, with synergies for fuel cell manufacturing and retrofitting internal combustion electric vehicles (FCEVs), heavy transport, e-buses engine vehicles (ICEVs). Opportunities associated and aviation. with battery swapping, battery recycling, and battery second-life applications could be evaluated in the Retrofitting ICEVs. BEV retrofitting (box 5.1) is a future. promising avenue that has the potential to both create jobs and accelerate e-mobility adoptions in the Manufacturing. BEV manufacturing is already region. BEV retrofitting involves retrofitting ICEVs with occurring in the region. Lucid Motors will establish a BEV powertrain. As discussed in the information its first international vehicle plant in Saudi Arabia. boxes below, BEV retrofitting is already common in Morocco has already manufactured e-buses and India and a new company active in Egypt specializes passenger vehicles and aims to develop an EV in retrofitting services.41 BOX 5.1 • Retrofitting in Egypt Shift BEV is an Egyptian technology startup based in Cairo, Egypt, whose technology allows businesses to convert their ICEVs into BEVs with a tailored solution at a fraction of the cost of a new BEV. The startup was founded by MIT graduates who worked in battery manufacturing prior to establishing the firm. The team at Shift BEV designs and manufactures state-of-the-art lithium-ion battery packs that integrate seamlessly with existing chassis. Fleet vehicles can be remotely connected to Shift BEVs’ fleet operating system for complete digital visibility and control. Currently, Shift BEV has conversion kits for 3 models common in Egypt, the minivan, the tricycle and the light transport vehicle Chevrolet T-series with estimated fuel savings of 30 percent relative to gasoline costs. In March 2022, the startup closed a total of $9 million in funding,44 putting it on the road to transform the BEV landscape not just in Egypt, but across emerging markets with home-grown battery technology. 40 https://www.reuters.com/article/morocco-electric-aerospace-idUKL8N2Z27AU 41 https://enterprise.press/stories/2022/04/07/meet-aly-eltayeb-ceo-of-the-startup-that-wants-to-transform-our-streets-and-help-save-the-environment-in-the-pro- cess-68696/ 5 • Challenges and Mitigation Strategies to Advance E-Mobility in MENA 41 Battery Swapping. Battery swapping involves the a second-life application. Battery recycling involves exchange of discharged BEV batteries for fully recovering recyclable materials, particularly battery charged batteries at a swapping station. Different cell metals such as lithium, cobalt, manganese, battery-swapping business models are in place to and nickel. These metals can be reused in new account for the benefits to both the customer and batteries. In a second-life application, batteries are the power system. The business models consider the repurposed in a new application. Stationary battery wholesale power market prices, BEV characteristics, storage is a commonly cited second-life application customer behavior, and related swapping fees. for lithium-ion batteries than can no longer be used in vehicles. Currently, both battery recycling and There are no examples of battery swapping vehicle battery second-life applications are not businesses currently operating in the MENA region. expected to be deployed in the region materially in This may be due to the disadvantages of this business the short- to medium-term due to the low numbers of which include the need for more batteries for the BEV adoptions. Governments in the region will need same number of BEVs on road, the fear of swapping to determine whether they desire to promote battery a good quality battery for an inferior battery, and recycling or promote second-life applications and the profitability concerns. However, as experience from creation of jobs needed to support those options. If China demonstrates, this business model may grow battery recycling is desired, MENA governments will in popularity as customers in multi-family buildings need to determine whether they prefer to outsource adopt BEVs. this activity or develop these skills locally, perhaps in support of domestic vehicle battery manufacturing. Battery Recycling and Second-life Battery Overall in a global context, reuse options have been Applications. Industry analysts predict at least under-explored and insufficiently implemented thus 145 million BEVs will be on the road by 2030.42 far, given the limited deployment of EVs. However, By 2040, there could be approximately 200,000 the situation could change dramatically over the metric tons of lithium-ion batteries that may need next decade, and countries aspiring to explore this to be disposed of, recycled, or reused.43 To prevent industry should move early on to find the right value adverse environmental impacts, battery components propositions and develop competitiveness in time. should be recycled, or batteries should be reused in 42 https://www.science.org/content/article/millions-electric-cars-are-coming-what-happens-all-dead-batteries 43 https://www.ucsusa.org/resources/ev-battery-recycling 42 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward 6 • KEY POLICY RECOMMENDATIONS Following is a summary of actionable policy takeaways In particular, given the challenges associated that MENA policymakers may employ to promote the with the electrification of bus services, figure 6.1 adoption of passenger BEVs, e-taxis, and e-buses. captures policy recommendations along three main These key policy recommendations draw from both pillars—National Adoption, Sectoral Integration, and international experience and lessons learned from Service Formalization; Charging Infrastructure and the Egypt, Jordan, and Morocco country deep dives, Renewable Energy Sources (RES) Synergy; and and highlight the positive impact of government Incentive Packages. intervention during the early phases of BEV adoption. FIGURE 6.1. • E-mobility Policy Recommendations: Three Pillars E-Mobility National Strategy National ITS Sector MEPS Integration & Service Formalization Cross-sectoral coordination Mandatory Labeling GWP recycling National Adoption, Sectoral of Equipment Public Transport Electrification Promotion campaigns ODS/low GWP refrigerants Regulatory Framework Testing standards Import Tari Capacity Building for e-buses Interoperability Incentives for Purchase of New Buses Charging Permits OEM Emissions Grid impact study and integration of RE / EVs Certification scheme MAC Funding Parking Shades Charging Tari including Time-of-Use Grid Infrastructure Incentives for CPOs Incentives for Enhancement Bus Operators Charging standard Pilot Project for e-buses Prices for Electricity Tax Exemption Charging infrastructure and RES synergy Incentive packages scaling up e-buses Source: Original compilation. 6 • Key Policy Recommendations 43 Below is a summary of broader policy range anxiety. For example, electrification of recommendations for the consideration of MENA major transport corridors with charging stations regulators, policymakers , and governments. located at petrol stations or rest stops between • Ensure e-mobility aspects are dealt with major cities. An example is the electrification comprehensively across all impacted planning of the Tangier and Agadir highway in Morocco, activities. The BEV ecosystem cuts across a connecting the cities of Marrakech, Casablanca, wide range of government functions including and Rabat. Viability can be demonstrated via those responsible for economic development, the electrification of public or commercial fleets manufacturing, environmental and climate through different pilots. The interoperability of policy, transportation, planning, permitting, public charging stations should be addressed. licensing of CPOs, specification of equipment Fast-charging infrastructure could be deployed in standards, safety, power quality, regulation of locations optimal for e-taxi opportunity charging. electricity infrastructure deployment, and retail Governments could also support penetration of rates. Successful coordination across sectors charging infrastructure in long dwell time locations and governance levels will help ensure that all such as points of interest and in residential areas aspects of this ecosystem are prepared for future where overnight charging may not be accessible, penetration of BEVs. Identifying which entity such as multifamily buildings. is responsible for each activity—and assigning • Where possible, support BEV procurement by the ownership thereof—is of crucial importance. government fleets. Such procurement could Government engagement can also include span mail delivery fleets, and government fleets of interfacing with international counterparts that e-buses or e-taxis. Electrification by government have successfully fostered e-mobility initiatives initiatives could also generate the impacts and expansion. needed to signal the market to boost confidence • Begin planning immediately to support future in end consumers. For example, the municipality job growth in core automotive and adjacent of Amman in Jordan has been electrifying its own industries. This will ensure that when BEV fleet, with new additions being purely electric. numbers are sufficient, industries targeted for As electric cars are achieving competitive total future job growth have sufficient skilled labor cost of ownership, especially with increasing fuel available and any necessary infrastructure has prices, procurement of BEVs for public use could been deployed. Planning scope could also cover be both green and economical. the development of strategies for dealing with • Regulators could ensure that smart charging batteries once they are no longer useful to power capabilities are technically viable across vehicles. Strategies may require investments, utility, vehicle and third-party equipment. training, and development of procedures and Communication technologies and equipment regulations. standards are important issues that MENA • In the early years of BEV penetration, governments could proactively support now, so governments could ensure that charging that these capabilities are in place as vehicle infrastructure is installed and operative in key, charging loads increase. This can be supported strategically designated locations to alleviate by development of the appropriate standards 44 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward and specification of deployed technologies. and efficiency of EVs. Some of the most used Smart charging (V1G) and vehicle-to-grid (V2G) standards include: services can potentially provide a number ` Battery safety standards to ensure that the of grid benefits including the provision of batteries are safe for use and do not pose a ancillary services (frequency regulation, voltage risk of fire or other hazards. Examples of these regulation, peak shaving, load leveling, spinning standards include UN 38.3 and IEC 62133. reserve), congestion mitigation, and renewable ` Vehicle safety standards to ensure that EVs energy integration. meet certain safety requirements, such as • Regulators could consider implementing crashworthiness, visibility, and emergency regulations to support BEV procurement for response capabilities. Examples are New private transit vehicles. As aging vehicles Car Assessment Program (NCAP) and the are retired, regulations could require that they European New Car Assessment Program are replaced with BEVs. Fleets targeted could (Euro NCAP). include rental car fleets, privately owned taxis, ` Performance standards to ensure that EVs minibuses, and microbuses. Moreover, some have adequate range, acceleration, and regulatory measures with no fiscal costs could top speed capabilities. Examples are New be considered, such as priority in the issuance of European Driving Cycle (NEDC) and the licensing plates, and the provision of designated Worldwide Harmonized Light Vehicles Test parking for BEVs. Procedure (WLTP). • MENA regulators can ensure that BEVs sold ` Environmental standards to ensure that in the region feature appropriate MAC system EVs have low emissions and meet certain technologies to cope with the hot climate fuel efficiency requirements. Examples are increasingly impacted by global warming. European Union's CO2 emissions standards This can be supported by development of the and the US Corporate Average Fuel Economy appropriate standards and mandate compliance. (CAFE) standards. For example, specifics regarding the MAC system can be included in existing or new EE • Land use planning is a key element when regulations and measures, testing procedures, deploying charging infrastructure. The works and license renewal requirements. Mandatory on land use planning for charging infrastructure labeling for MAC can be integrated into is still in its nascent stage. Different studies exist existing EE labeling schemes to provide easily which are aiming to (i) explore the necessity comprehensible information on the EE of MAC, of deriving a land use planning framework for further encouraging customers and EV operators EV charging infrastructure; and (ii) to identify to choose sustainable options. a replicable model for spatial planning for EV charging infrastructure. The ideal allocation • Development of vehicle standards (for both new and placement of charging stations has been and used vehicles) and disposal of batteries are extensively researched, however the connection important elements to highlight and bring in. between charging stations and land use has not There are several standards for EVs that are used been well understood thus far. to regulate and ensure the safety, performance, 6 • Key Policy Recommendations 45 • The Government needs to play a role in the charging infrastructure or co-investing in e-mobility transition to provide incentives e-mobility projects including public finance in early stage to create ` Infrastructure for charging stations: establish the required infrastructure, demonstration, early- infrastructure for charging stations, by stage procurement, bear technology risks, create providing land for charging station installations, the awareness/knowledge among the public and or by mandating that new buildings include private sector and set an attractive regulatory charging stations. framework to enable private sector participation ` Incentives for manufacturers: provide including through PPPs. Here is a list of measures incentives to manufacturers of EVs and that governments could consider to promote the charging infrastructure to encourage uptake of e-mobility: investment and job creation ` Tax incentives and subsidies: where fiscal ` Encouraging the use of EVs in shared space allows, provide tax incentives and mobility schemes: can provide an affordable subsidies for the purchase of EVs, charging and accessible way for people to use EVs at infrastructure, or RE systems lower rates (pay as you go) ` Mandates and targets: defining the strategic ` Encouraging the use of RE: by providing targets (sales of EVs by 2035, banning sales incentives for the installation of RE systems, of ICEs …etc.) or by mandating the use of RE for charging ` Education and awareness campaigns: stations education and awareness campaigns to ` Promoting the use of EVs in public educate the public on the benefits of e-mobility transportation and fleet operations: by and the availability of EVs and charging providing funding for the purchase of e-buses, infrastructure or by mandating the use of EVs in public ` Public-private partnerships: partner with transportation service / in government fleet the private sector by providing funding for operations 46 UNLOCKING ELECTRIC MOBILITY POTENTIAL IN MENA Opportunities, Challenges, and Way Forward 6 • Key Policy Recommendations 47 INFRASTRUCTURE #BuildingBetterLives MOLO eMobility