Bangladesh Apparel Exports Face Potential EU Carbon Tax Post-2030
A study indicates that Bangladesh's apparel exports to the EU may incur a 4.8% carbon tax after 2030, if emissions are not curtailed. This comes as Bangladesh is expected to lose its duty-free trade benefits following graduation from LDC status in November 2026.
Bangladesh's apparel sector might face a 4.8% carbon tax on exports to the EU post-2030 due to the Carbon Border Adjustment Mechanism (CBAM). With the anticipated loss of duty-free access after graduating from LDC status, Bangladesh could face an average tariff burden of about 17%, combining the average EU-MFN duty of 12.1% with the carbon tax.
AI-curated by TheiaThe EU plans to expand CBAM to all imported goods by 2030, impacting over 80% of Bangladesh's exports directed to the EU. Industry stakeholders are proactively adopting renewable energy and green practices to mitigate these impacts; approximately 300 factories are already green-certified. Continued efforts to increase clean energy use are crucial to avoid additional penalties.
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