The Egyptian government has announced plans to develop a comprehensive roadmap for implementing the Carbon Border Adjustment Mechanism (CBAM), signaling a critical step toward its national green transition strategy. According to an official statement, the initiative aims to accelerate Egypt’s shift toward a low-emission economy, particularly in industrial sectors, through coordinated national policy and international support.
The announcement follows a high-level meeting between Deputy Prime Minister for Industrial Development and Minister of Industry and Transport, Kamel El-Wazir, and Minister of Planning, Rania Al-Mashat. The two ministers outlined a multi-pronged strategy focused on mobilizing green investments and expanding financing tools to modernize Egypt’s industrial base in line with global climate goals.
CBAM Alignment and Green Industry Push
The Carbon Border Adjustment Mechanism—a cornerstone of the European Union’s climate strategy—imposes tariffs on imported goods based on their carbon content, pushing exporting nations to decarbonize supply chains. Egypt’s roadmap is intended to ensure compliance with CBAM while positioning the country as a competitive green industrial hub.
In their discussions, El-Wazir and Al-Mashat reviewed the latest developments in the Green Sustainable Industries (GSI) program, which offers soft loans and non-refundable grants to rehabilitate and decarbonize factories across Egypt. The program, in collaboration with international development partners, has already secured €271 million (EGP 16 billion) in funding, including EGP 1.2 billion in grants. These funds are channeled through Egyptian banks to support cleaner production processes, promote renewable energy, and enhance industrial efficiency.
Partnering with EBRD and Global Climate Funds
The ministers also examined expanding Egypt’s partnership with the European Bank for Reconstruction and Development (EBRD) through the “NWFE” platform, a flagship initiative designed to attract green investment in key sectors including manufacturing, transport, and energy.
As part of this engagement, Egypt is considering the launch of a new national platform modeled on NWFE, specifically tailored to mobilize soft financing and international grants for green transformation in the private industrial sector.
Further collaboration is underway with the Green Climate Fund (GCF), under its High-Impact Private Sector Program, which is managed by the EBRD. This initiative aims to accelerate emissions reductions in developing countries by supporting private sector-led green projects through a blend of grants, concessional loans, and risk-sharing instruments.
Sustained Growth in Non-Petroleum Manufacturing
Al-Mashat highlighted the transformative impact of Egypt’s economic reform measures, launched in March 2024, on the non-petroleum manufacturing sector. The sector has emerged as a key driver of national growth, recording robust gains across three consecutive quarters: 7.1% in Q1, 17.7% in Q2, and 16.3% in Q3 of FY2024/2025. In the latest quarter, it contributed 1.9% to Egypt’s GDP growth—the highest among all sectors.
“This trajectory reflects the resilience of Egypt’s industrial sector and its potential to lead the green transition,” Al-Mashat said, emphasizing that development partnerships have been instrumental in providing both the technical expertise and financial instruments needed to scale sustainable practices.
Implementation Framework and Oversight
To ensure seamless coordination, El-Wazir has ordered the formation of a joint technical committee to monitor the execution of priority projects and align national efforts with international financing mechanisms. The committee will also be tasked with integrating the CBAM roadmap into Egypt’s broader industrial policy framework.
Both ministers reiterated that these initiatives support Egypt’s National Climate Change Strategy 2050 and Nationally Determined Contributions (NDCs)—without imposing any direct financial burden on the state budget.
A Strategic Shift Toward Green Competitiveness
As countries adapt to emerging global climate regulations, Egypt’s proactive approach to the CBAM and green industrial policy reflects a broader strategic pivot: leveraging sustainability as a growth engine rather than a constraint.
“By embracing innovation, international cooperation, and financial ingenuity, Egypt is setting the stage for a competitive green economy that meets the challenges of the 21st century,” Al-Mashat said.
With its industrial sector at the forefront, Egypt is poised to transition from climate adaptation to climate leadership—on its own terms and with global partnerships firmly in place.
