CBAM, ESG Drive Major Shift For Jordanian Industries Targeting EU Market

(MENAFN- Jordan Times) AMMAN - Navigating the complexities of the European market requires a strategic shift towards sustainability, digital integration, and robust change management, according to Circular Economy and Sustainability Expert at Royal Scientific Society (RSS) Omar Saleh.

Speaking on the evolving landscape of Jordanian exports, Saleh outlined a three-pillar entry strategy for the EU market. "The gateway to the European market is summarised in three priorities: agrifood, data-driven logistics, and critical raw materials," Saleh stated.

"This leads us to the vital importance of change management, which requires tangible incentives." Saleh said during his presentation at the EuroCham Jordan.

Green Transition: CBAM and ESG

A central theme of the discussion was the Carbon Border Adjustment Mechanism (CBAM), often referred to locally as CIBA, which aims to reduce carbon emissions. Jordan became a signatory to these regulations on October 1, 2023, with the measures set to take full effect on January 1, 2026.

"This transition necessitates a total rethink of our industrial processes," Saleh noted. "For instance, major exporters like the Arab Potash Company must now establish a precise carbon footprint. We need urgent awareness because the life cycle for a circular economy is now effectively in play."

While Environmental, Social, and Governance (ESG) frameworks no longer remain voluntary, He warned that they are already influencing financial health.

"These standards are increasingly tied to the relationship with the bank," he explained. "Furthermore, external financing must now fall under Taxonomy regulations."

Road to COP31

Looking ahead to COP31 that will take place in Istanbul, Saleh emphasised the need for early preparation. "The private sector must attend to understand market requirements well in advance," he said. "On the sidelines of the conference, there will be activities specifically designed to provide practical solutions."

He urged the creation of a "national roadmap" for awareness. "We must think ahead. There should be continuous sectorial meetings to move through clear stages: identifying where to export, diagnosing the problems and then implementing the solutions."

Industrial Challenges and Circular Economy

The Jordan Chamber of Industry remains focused on the "Exporter's Journey," specifically within the chemicals, cosmetics, and wooden products sectors.

Jordan suffers from a major problem in industrial waste disposal, where waste is often dumped in desert cesspools or water ponds as mentioned during the discussions.

To counter this, he advocated for a transition to a circular economy. "To transform, we must start with policies, move to technologies, and finally look to the country's resources. To improve design and supply, we must include 'take-back' mechanisms and incentives."

Opportunities, Global Competition

The shift toward "green chemistry" and "circular supply chains" is not just a regulatory burden but a massive employment engine. "This sector would generate around seven million jobs in the supply chain globally," Saleh highlighted, adding that consumer protection also plays a pivotal role in this new economy.

However, the expert warned that Jordan is competing for a shrinking pool of resources. "Currently, European funding is going towards Rwanda and Africa," he noted. He also stressed that these high standards now apply also to the energy sector, specifically aviation and jet fuel.

To bridge the gap in electronics manufacturing, Saleh pointed out that it needs a stronger foundation. "This requires iron, molding machines, and robust infrastructure," he said.

"Ultimately, we must know the law, its limits, and who can help. This is possible through facilitated dialogues with the European market, as they will not accept products unless they meet a specific level of quality."

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