Climate pioneer Mahmoud Mohieldin said that the financing plan, which relies on funding from Western donors to help developing countries switch to cleaner energy generation, can be replicated in heavy industries and other sectors where it is difficult to mitigate emissions.
Mohieldin, who serves as climate lead for the Egyptian presidency of the UN Climate Change COP27 Conference of the Parties, added in an interview that expanding the Just Energy Transition Partnership structure to include sectors such as steel, aluminium, cement and fertilizers makes sense due to new EU rules. Which would impose sanctions on exporters from developing countries.
Muhyiddin said that the rules established under the European Union’s carbon border adjustment mechanism would have “serious repercussions” for countries exporting to Europe.
He continued, saying, “I look at countries, including my country, and we see the importance of these four sectors, including fertilizers, during the past two years, which in fact constitute a very large share of export trade to the European Union.”
The Carbon Border Adjustment Mechanism is the world’s first system to impose fees on carbon dioxide emissions, and will take effect from 2026 on imports of iron, steel, aluminium, cement, electricity, fertilizer and hydrogen, in an effort to encourage environmentally friendly production around the world.
The United Nations Climate Change Conference (COP28), which will be hosted by Dubai starting November 30, will focus on the progress made in implementing the Just Energy Transition Partnership programs and ways to mobilize more climate finance.
Mohieldin said that countries exporting to the European Union in sectors where it is difficult to mitigate emissions could try to disrupt the mechanism for adjusting carbon limits through the World Trade Organization, or use carbon markets or negotiate to obtain exemptions, while there is a good opportunity to use investment and technology in Carbon removal