Effects of the EU’s CBAM on Eurasian Countries

Year 2023, Volume: 73 Issue: 2, 675 - 696, 30.12.2023

Sergei Sudakov

https://doi.org/10.26650/ISTJECON2023-1226280

Abstract

Starting from 2026, imports of certain goods to the EU will be subject to a special fee that is based on the carbon content of the imported products. Consequently, the EU’s trade partners have tried to predict the possible risks of such a change in the European trade policies. Given this, the article focuses on the analysis of the impact of the EU’s Carbon Border Adjustment Mechanism (CBAM) on different countries. In particular, the current research aims to assess CBAM payments for imports of products from Eurasian countries to the EU. Despite current trends in the EU’s trade policy, the largest CBAM payment is estimated to be for Russia. Analysis shows that the highest share of CBAM payments in exports to the EU is estimated to be for Uzbekistan, Georgia, Tajikistan and Belarus. The biggest share of CBAM payments falls on imports of metals, fertilisers, electricity and oil. However, these results should be treated with caution since some Eurasian countries are missing high quality data on the carbon intensity of the produced goods. In this light Eurasian countries should adopt a transparent system for collecting and publishing detailed information on the embedded emissions of different products. Adoption of CBAM by the EU may lead to the implementation of the analogous mechanisms by trade partners of the Eurasian region. Therefore, the decrease of carbon intensity of products and “green” transition should be among the top priorities of the industrial and economic policies of these countries.

JEL Classification : F13 , H23

Keywords

Carbon border adjustment, Trade policy, Climate policy, Export, Sanctions, CBAM, EAEU

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