Ahmed Wafiq, CEO of Integral Consult, said the Carbon Border Adjustment Mechanism (CBAM) serves as a tool for regulating global carbon emissions.

He explained that European Union countries have been paying the cost of carbon emissions for 20 years, whereas other countries have not.

He made the remarks during the 7th Forum on Strategies for Transition to Green Economy – dubbed the 7th Green Economy Forum – which kicked off on Tuesday under the theme of “The Transition C-Panel”.

He added that the EU aims to further increase the cost of carbon emissions and make it mandatory for companies, with the aim of regulating emissions globally.

Wafiq pointed out that CBAM establishes a fair carbon price for emissions generated during the production of carbon-intensive goods entering the EU, aiming to prevent carbon emissions by ensuring that industries are not relocated to Europe without accounting for the emission costs.

The mechanism also enhances global climate action and encourages countries to adopt carbon pricing policies, while ensuring a level playing field by making imports to the EU more competitive with local products that are subject to carbon pricing under the EU Emissions Trading System (ETS).

He noted that the ETS allows for trading of EU Allowances (EUA) to ensure total emissions remain within a predetermined cap. The system was introduced in 2005, is currently in its fourth phase, and provides free allocations to participating industrial sectors.