(MENAFN- Trend News Agency) TBILISI, Georgia, May 2. TheEU's Carbon BorderAdjustment Mechanism to affect CAREC countries, ADB DirectorGeneral for Central and West Asia Evgeny Zhukov said during thepanel discussions on "Financing Greener Value Chains in the CAREC(Central Asia Regional Economic Cooperation Program) region" at theADB Annual Meeting in Tbilisi, Trend reports.
The EU's Carbon Border Adjustment Mechanism (CBAM) is currentlyin a transitional phase (October 2023–December 2025) to expand toall emissions trading system (ETS)-covered sectors in 2026.
The EU will impose import charges on carbon-intensive productslike cement and electricity based on the carbon dioxide emissionsembedded in their production.
CBAM seeks to align global carbon prices, accelerate emissionreductions worldwide, and reduce "carbon leakage".
''It can significantly impact GVC supplier economies with highershares of carbon-intensive exports to Europe, particularly Centraland West Asia. Carbon pricing policies are in place across almost40 jurisdictions. The CAREC region will be affected by CBAM. Chinawill have a significant reduction in CO2 emissions and contributeto global reduction under this scenario,'' he said.
Zhukov noted that CBAM in both the EU and OECD without carbonpricing in CAREC will increase emissions in all CAREC economies dueto possible carbon leakage and downstream production shifting toCAREC economies.
''For CAREC countries with high CO2 intensities in extractivesectors, CBAM can create a challenge. CBAM could lead tosignificant declines in exports and industrial production in CARECcountries in CBAM-covered sectors. CAREC 10 countries (excludingChina) are estimated to have the most substantial decline in totalexports,'' he emphasized.
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