Effects of the EU’s CBAM on Eurasian Countries

Sergei Sudakov ()
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Sergei Sudakov: Financial Research Institute Center for Macroeconomic Research Moscow Russia

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2023, vol. 73, issue 73-2, 675-696

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.

Keywords: Carbon; border; adjustment; Trade; policy; Climate; policy; Export; Sanctions; CBAM; EAEU; JEL; Classification:; F13; H23 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:73:y:2023:i:2:p:675-696

DOI: 10.26650/ISTJECON2023-1226280

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