Dr.Ayman Sobhy: Carbon tax! The challenge to Egyptian industrial
Sustainable Built Environment expert and Environmental consultant certified by EEAA in applied EMS & executed CAPs for corporates
Carbon tax on Egyptian industrial imports especially the products of carbon-intensive industries, such as iron, steel, cement, aluminum, fertilizers, in addition to electrical energy.
The winds of change are swirling across Europe, and a storm cloud gathers on the horizon for Egyptian exporters.
The specter of the carbon tax, a levy on goods with a high carbon footprint, looms large.
Will it become an insurmountable barrier, a stranglehold on Egyptian exports’ access to the lucrative European market?
Egyptian businesses, fueled by ambition and a drive to compete, have long seen Europe as a prime destination for their goods.
But with the carbon tax looming, a sword of Damocles hangs overhead. Products with a significant carbon footprint could face crippling costs, squeezing profit margins and potentially derailing their European aspirations.
This isn’t just a hypothetical threat. The carbon tax is a powerful weapon in Europe’s arsenal, a tool to combat climate change and incentivize sustainable practices.
For Egyptian exporters, it’s a reality check, a stark reminder that business as usual may no longer be an option.
The European Commission has approved a first-of-its-kind “carbon tax” on industrial imports, aiming to achieve climate neutrality by 2050.
The tax would impose additional barriers on exports from countries like Egypt, particularly from carbon-intensive industries like iron, steel, cement, aluminum, and fertilizers.
Starting in 2026, the “carbon tax” will be implemented under the “carbon border adjustment mechanism” to prevent European companies from shifting high-emission industrial production outside the EU and encourage non-EU countries to remove carbon from their products.
The European Union is implementing a strategy to combat “Carbon Leakage,” a problem caused by high carbon content imports from other countries, which the bloc considers unfair due to price competition.
The Carbon Border Adjustment Mechanism (CBAM) aims to address carbon leakages by imposing fair prices on imported goods from non-EU member states.
This mechanism, similar to dumping duties, encourages non-member states to improve industries and reduce greenhouse gas emissions, aiming to encourage better industries.
In February 2024, the European Commission’s delegation met with Egyptian officials to discuss the Carbon Border Adjustment Mechanism’s obligations on Egyptian industrial exports.
They also held a consultative session with the Federation of Egyptian Industries on the implications of the new mechanism.
