International consultant Mohamed El-Lethey has proposed nine comprehensive strategies to help Egypt comply with the European Union's Carbon Border Adjustment Mechanism (CBAM) in 2026 while boosting export competitiveness. CBAM targets Egypt's key exports worth $14 billion, threatening 8-12% cost increases in sectors like steel and cement. Yet El-Lethey sees opportunities for billions in savings through green financing and renewables.
The European Union's Carbon Border Adjustment Mechanism (CBAM) entered full enforcement on Thursday, imposing carbon tariffs on Egypt's major exports to the bloc, valued at $14 billion in the 2024/25 fiscal year. The measure targets vital sectors such as steel, cement, aluminium, fertilisers, electricity, and hydrogen, with tariffs tracking the EU Emissions Trading System (ETS) prices of €85-100 per tonne of CO2 equivalent. It demands rigorous emissions monitoring, reporting, and verification (MRV) from Egyptian exporters to sustain market access.
Mohamed El-Lethey, an international consultant in quality and sustainability, noted that the mechanism—designed to prevent carbon leakage—affects industries comprising 33% of GDP, which rely on natural gas for 81% of their energy. “Without action, losses could hit $1.2-1.8 billion annually from 8-12% cost increases,” he told reporters, highlighting aluminium (78% directed to the EU, worth $1.8 billion), cement (1.2 million tonnes yearly as the EU's second-largest supplier), and fertilisers ($4.5 billion last year toward an $11 billion target).
These pressures endanger jobs in production hubs like Nag Hammadi, Helwan, and 10th of Ramadan City, with broader supply chain impacts. However, El-Lethey pointed to benefits: domestic carbon taxes creditable against CBAM could reduce net costs by 25%, while unlocking $3-5 billion in green financing from the World Bank ($700 million pledged) and the European Bank for Reconstruction and Development, building on the Benban solar park (1.8 GW) and Gulf of Suez wind farms.
El-Lethey outlined nine interconnected strategies—four government pillars underpinning five industry tactics within MRV frameworks—for complete 2026 compliance. “This creates a virtuous cycle of savings, resilience, and leadership in MENA green exports, up 25% by 2030,” he said. The government pillars include immediate EU negotiations to extend transitional periods to 2028 and launch a national carbon market covering 50 million tonnes of annual emissions for $800 million in savings; a $15 billion drive to raise renewables to 42% of the energy mix by 2030, cutting industrial emissions 25%; training 10,000 engineers in MRV with 35% tax incentives for 300 priority factories; and a $2 billion sovereign green fund at 4% interest to attract FDI and public-private partnerships for retrofits.
Industry tactics encompass rapid carbon capture and storage (CCS) rollout in cement and steel for 22% emissions reductions within 18 months, funded by green banks; shifting to blue hydrogen from gas reserves to cut costs 15% and earn CBAM certificates; supply chain alliances with solar farms to shrink footprints 18%; diversifying 20% of exports to Asia and Africa via Environmental Product Declarations (EPD) and ISO 14067 certifications to draw $2 billion FDI; and advanced digital MRV platforms for real-time reporting to avoid €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.”