Overview
Despite its location in a water-scarce region, and unlike neighboring countries dealing with an alarming water deficiency, Israel has an abundant supply of water thanks to desalination facilities that provide most of Israel’s water. Many believe that the shortage of water resources has prompted entrepreneurial and innovative developments in the field of water and agriculture. Over past decades, Israel managed to maximize its water resources and create a prosperous environmental sector, much like water-rich countries. Israel has made remarkable achievements in the water sector, including desalination facilities that are among the largest in the world, supplying approximately 80% of Israel’s water consumption; sewage effluents facilities that collect and treat most of Israel’s wastewater (Israel has one of the world’s highest reclamation rates worldwide, with 90% of its wastewater being reused); and the development of a strong domestic water technologies industry.
Nevertheless, due to a prolonged draught period and dwindling natural water resources, coupled with the rapid population growth and geo-political challenges, Israel has to ensure its ability to remain self-sufficient. The Israeli government plans to continue investing in new desalination facilities, alongside remediation of its polluted groundwater and developing its water infrastructure.
In comparison to water, Israel’s waste treatment industry is underdeveloped, with approximately 80% of its waste being sent to landfill, and only 20% to recycling. This leads to environmental hazards such as groundwater and air pollution. Furthermore, the Ministry of Environmental Protection (MOEP) cautions that Israel is quickly approaching full capacity of its current landfills. To tackle this unsustainable status quo, the MOEP announced in 2021 a strategic plan to transform Israel’s waste treatment industry. The ultimate goal is a transition by 2050 from Israel’s current, resource-consuming linear economy into a circular economy, which strives for minimum waste production and maximum efficiency in the use of resources. MOEP’s short-term goals for 2030 are to recycle 54% of the waste (compared to 20% in 2020), create the necessary infrastructure for separation at source, and establish sorting facilities that will process 100% of the waste while reducing landfill disposal to 20% (from 80% in 2020).
Furthermore, in line with Israel’s commitments to the Paris Agreement, in July 2021, the Israeli government updated its 2015 greenhouse gas (GHG) emission reduction goal to 27% decrease in GHG emission levels by 2030, using 2015 as the base year. As part of this decision, the government commits to reducing GHG emissions originating from solid waste by 47% until 2030, and by 92% until 2050, using 2015 as the base year. Additionally, the government commits to reduction of 71% in municipal solid waste sent to landfill by 2030, compared to 2018.
Leading Sub-Sectors
Leading sub-sectors for U.S. companies include Water Infrastructure, Groundwater Treatment, and Waste Treatment and Recycling.
Specifically, drilling water wells and tunneling services, water infrastructure design services, groundwater treatment technologies and services, and waste treatment technologies and services, are all viable opportunities for U.S. exporters.
Opportunities
Water
In June 2018, the Israeli government approved a strategic plan responding to the lengthy draught period, which lasted for 5 consecutive years, between 2013-2018. The plan is valued at approximately $4 billion between 2018-2025, of which at least $1 billion will be open for international tenders. According to a subsequent government resolution dated February 2019, Mekorot (Israel’s government-owned water utility company) is required to significantly increase its investment in the development of the Israeli water infrastructure. The following are key components of Israel’s plans for the water sector, which present viable opportunities for U.S. exporters:
Desalination: the establishment of two new desalination plants, “Sorek B” (awarded in 2020 and expected to begin operation at the end of 2023) and “Western Galilee” (awarded in November 2022), will increase Israel’s desalinated water capacity by additional 300 million cubic meter (from 533 million cubic meter annually in 2021). Existing desalination facilities are to be expanded by Mekorot, which will result in additional infrastructure projects.
Connecting to the national water conduit system: new desalination plants will need to be connected to the national water conduit system. Infrastructure projects related to connecting the Western Galilee plant are valued at $144-300 million. Israel also plans to connect remote locations in the country to the national conduit system to increase reliability of water supply.
Turnkey projects for drilling of shallow and deep-water wells: approximately 400 wells in total are planned in the next few years, valued at approximately $1.3 billion. In January 2022, Mekorot awarded the first drilling tender for the construction of 70 wells, valued at $158 million. Additional tenders are forthcoming.
Domestic and regional water infrastructure upgrades: as part of Mekorot’s plans to upgrade the water infrastructure, it is planning multiple design projects for drilling, pumping stations, pipelines, tanks, reservoirs, water treatment, cathodic protection and more. In addition to catering for Israel’s domestic water needs, the Government of Israel is also planning to increase the amount of water sold to Jordan, as part of the “Project Prosperity” deal between the two governments. According to the latest plan, a large desalination plant would be constructed on the Mediterranean coast that would provide additional water to Israel and Jordan.
Groundwater remediation, laying water pipes, and digital transformation projects (including advanced sensors, command and control systems, and new SCADA system) are also viable opportunities for U.S. exporters of equipment, technologies and services.
Recycling
As of 2020, Israel sends approximately 80% of its waste to landfill, while only 20% is recycled. The Ministry of Environmental Protection’s (MOEP) goal is a transition by 2050 from Israel’s current, resource-consuming linear economy into a circular economy, which strives for minimum waste production and maximum efficiency in the use of resources. MOEP’s short-term goals for 2030 are to recycle 54% of the waste (compared to 20% in 2020), create the necessary infrastructure for separation at source and sorting facilities that will process 100% of the waste, while reducing landfill disposal to 20% (from 80% in 2020).
To meet these ambitious goals for 2030, the MOEP anticipates that approximately 7-10 new sorting facilities will be required to handle dry, recyclable waste (which constitutes about 39% of total waste) in addition to the five facilities already operating, and the six facilities that are under development. The dry waste material that cannot be recycled will be transferred to energy recovery facilities where possible, or otherwise landfilled. Lastly, the MOEP plans to process organic waste (which constitutes 43% of total waste) in biological treatment facilities, where it will undergo further sorting, and then sent to composting and anaerobic digestion systems.
Supply of relevant waste treatment/sorting technology and know-how, alongside investing in, building, and equipping of new facilities, are all practicable opportunities for U.S. exporters.
Environmental Infrastructure Projects
The current scope of infrastructure investment in Israel is lower than comparable countries around the world. To address this gap, the Israeli government is planning large scale infrastructure projects across almost all industries, and publishes the multi-year Infrastructure for Growth (in Hebrew) workplan, a national infrastructure strategy consolidating all projects valued at more than 100 million shekels (~$30 million) that are either in progress, budgeted or approved by the government. The 2023 workplan includes 228 projects, valued at $114 billion in total, across many industries including several projects in the environmental sector. A significant portion of the projects will be implemented via a public-private partnership (PPP) model.
R&D
U.S.-Israeli joint R&D and cooperation in the environmental technologies sector is growing, particularly in cleantech and water. The BIRD Foundation supports joint U.S.-Israel commercial R&D in this industry and normally publishes new calls for proposals annually.
Resources
Ministry of Environmental Protection
Infrastructure for Growth 2023 (in Hebrew)
For additional information, please contact Commercial Specialist Naama Myers-Altman at Naama.Altman@trade.gov