EU's Carbon Border Adjustment Mechanism Enforced, Impacting Egypt's $14 Billion Exports
The European Union's Carbon Border Adjustment Mechanism has begun enforcing carbon tariffs on Egypt's $14 billion exports, significantly impacting key sectors such as steel and cement. This initiative, which aligns with EU emissions trading prices, could lead to annual losses of $1.2-1.8 billion for Egypt, prompting the government to propose compliance strategies, including domestic carbon taxes and a national carbon market. Capacity-building efforts are also planned to train engineers and enhance emissions monitoring capabilities.

The European Union's Carbon Border Adjustment Mechanism (CBAM) commenced full enforcement, imposing carbon tariffs on Egypt's exports to the EU, valued at $14 billion for the 2024/25 fiscal year. The tariffs, which align with EU Emissions Trading System prices of €85-100 per tonne of CO2, affect key sectors such as steel, cement, aluminium, fertilisers, electricity, and hydrogen.
The mechanism requires stringent emissions monitoring from Egyptian exporters. Industries impacted represent 33% of Egypt's GDP, with potential annual losses of $1.2-1.8 billion due to cost increases. El-Lethey outlined strategies for compliance by 2026, including leveraging domestic carbon taxes and securing $3-5 billion in green financing.
He proposed extending transitional periods to 2028 and establishing a national carbon market, which could save $800 million. Capacity building initiatives aim to train 10,000 engineers, while advanced MRV platforms will support real-time emissions reporting.




Comments