The European Union’s Carbon Border Adjustment Mechanism (CBAM) entered full enforcement on Thursday, placing carbon tariffs on Egypt’s major exports to the bloc—worth $14 billion in the 2024/25 fiscal year. According to Mohamed El-Lethey, International Consultant in Quality and Sustainability, these measures specifically target critical sectors including steel, cement, aluminium, fertilisers, electricity, and hydrogen. Tariffs track EU Emissions Trading System (ETS) weekly prices of €85-100 per tonne of CO2 equivalent, demanding rigorous emissions monitoring, reporting, and verification (MRV) from Egyptian exporters to maintain market access.
El-Lethey noted that the mechanism—aimed at preventing carbon leakage—affects industries making up 33% of GDP that rely on natural gas for 81% of energy. “Without action, losses could hit $1.2-1.8 billion annually from 8-12% cost increases,” he told reporters, citing aluminium (78% EU-directed, $1.8 billion), cement (1.2 million tonnes a year as EU’s No. 2 supplier) and fertilisers ($4.5 billion last year toward $11 billion target).
Such pressures threaten jobs in production centres like Nag Hammadi, Helwan and 10th of Ramadan City, with ripple effects on supply chains, El-Lethey added. But he pointed to upsides: domestic carbon taxes creditable against CBAM could cut net costs 25%, while opening $3-5 billion green financing from World Bank ($700 million pledged) and EBRD, leveraging Benban solar park (1.8 GW) and Gulf of Suez wind farms.
El-Lethey outlined nine interconnected strategies—four government pillars supporting five industry tactics under MRV frameworks—for full 2026 compliance. “This creates a virtuous cycle of savings, resilience and leadership in MENA green exports, up 25% by 2030,” he said.
Government pillars
He called for immediate EU negotiations to extend transitional periods to 2028 and launch a national carbon market covering 50 million tonnes of emissions yearly, generating $800 million savings. A parallel $15 billion push would raise renewables to 42% of energy mix by 2030 via Suez expansions, reducing industrial emissions 25%.
Capacity building would train 10,000 engineers in MRV, with 35% tax incentives for 300 priority factories. A $2 billion sovereign green fund at 4% interest rates would mobilise FDI and public-private partnerships for retrofits.
Industry tactics
El-Lethey detailed rapid CCS rollout in cement and steel for 22% emissions cuts within 18 months, financed by green banks. Firms should shift to blue hydrogen from gas reserves, cutting costs 15% and enabling CBAM certificates.
Supply chain alliances with solar farms would shrink footprints 18%, he said, while diversifying 20% of exports to Asia and Africa via Environmental Product Declaration (EPD) and ISO 14067 certifications draws $2 billion FDI. Advanced digital MRV platforms would ensure real-time reporting, avoiding €100/tonne penalties.
“CBAM shifts from threat to opportunity when executed cohesively,” El-Lethey said. “Egypt can redefine its industry, protect livelihoods and lead the global green economy.”
Mohamed El-Lethey is an International Quality and Sustainability Consultant with extensive expertise in developing and auditing management systems across industries. As a Certified Lead Auditor in ISO 42001, 9001, 27001, 14001, 45001, and 50001 standards and a Six Sigma Black Belt, he aids organizations in achieving world-class standards in quality, environmental performance, and sustainable business practices.
