Kazakhstan assesses risks for exporters under CBAM

The implementation of the European Carbon Border Adjustment Mechanism (CBAM) involves a large amount of work in cooperation with the relevant ministries of Kazakhstan and the industrial sector. This was announced by Vice Minister of Ecology and Natural Resources Mansur Oshurbayev, Kazinform reports.

According to him, an interdepartmental working group has already been set up to develop proposals in a short time and identify the risks for Kazakh enterprises.

According to the QazTrade Trade Policy Development Center, the EU accounts for 39% of Kazakhstan’s exports, including oil, oil products, ferroalloys, coal, uranium, wheat, and others. In 2023, the volume of Kazakhstan’s exports to the bloc amounted to $41.4 billion, of which $388.7 million was accounted for by carbon-intensive goods.

QazTrade Deputy CEO Nurlan Kulbatyrov noted that since last year, the center, in cooperation with the Ministry of Trade and Integration, has been holding information events for export-oriented companies on the carbon tax.

“Our producers have questions related to the new cross-border tax initiative. We support the EU’s sustainable development and decarbonization goals, but these goals should not create barriers to international trade,” said Nurlan Kulbatyrov.

Delphine Sallard, senior expert at the European Commission’s Directorate-General for Taxation and Customs Union, said that cross-border carbon regulation will most affect the country’s ferrous metals and aluminum sectors. In 2022, they accounted for about 0.9% and 0.8% of the total value of Kazakhstan’s exports to the EU.

According to Ainur Amirbekova, Director of the International Integration Department at QazTrade, the introduction of the EU carbon tax will automatically affect the cost of export goods and, consequently, the competitiveness of products, the center’s website says. The increased price could hypothetically close some markets to Kazakhstani goods. Therefore, the country’s enterprises should start working on decarbonization and transition to alternative technologies now.

Kazakhstan should reduce its net emissions to 328.4 million tons of carbon by 2030 and cut emissions by 25% compared to 1990 levels with international support. According to OECD experts, this means that by 2030, the country should reduce the share of coal generation from 65% to 40% and increase the share of renewable energy from 10% to 24%.

As GMK Center reported earlier, in 2023, Kazakhstan’s steel enterprises increased steel production by 16.4% compared to 2022, to 3.92 million tons.