TBILISI, Georgia, May 2. TheEU’s Carbon Border
Adjustment Mechanism to affect CAREC countries, ADB Director
General for Central and West Asia Evgeny Zhukov said during the
panel discussions on “Financing Greener Value Chains in the CAREC
(Central Asia Regional Economic Cooperation Program) region” at the
ADB Annual Meeting in Tbilisi, Trend reports.
The EU’s Carbon Border Adjustment Mechanism (CBAM) is currently
in a transitional phase (October 2023–December 2025) to expand to
all emissions trading system (ETS)-covered sectors in 2026.
The EU will impose import charges on carbon-intensive products
like cement and electricity based on the carbon dioxide emissions
embedded in their production.
CBAM seeks to align global carbon prices, accelerate emission
reductions worldwide, and reduce “carbon leakage”.
”It can significantly impact GVC supplier economies with higher
shares of carbon-intensive exports to Europe, particularly Central
and West Asia. Carbon pricing policies are in place across almost
40 jurisdictions. The CAREC region will be affected by CBAM. China
will have a significant reduction in CO2 emissions and contribute
to global reduction under this scenario,” he said.
Zhukov noted that CBAM in both the EU and OECD without carbon
pricing in CAREC will increase emissions in all CAREC economies due
to possible carbon leakage and downstream production shifting to
CAREC economies.
”For CAREC countries with high CO2 intensities in extractive
sectors, CBAM can create a challenge. CBAM could lead to
significant declines in exports and industrial production in CAREC
countries in CBAM-covered sectors. CAREC 10 countries (excluding
China) are estimated to have the most substantial decline in total
exports,” he emphasized.
Stay up-to-date with more news on Trend News
Agency’s WhatsApp channel
