General Authority for Investment and Free Zones Discusses with Private Sector Representatives the Implications of the EU Carbon Border Adjustment Mechanism (CBAM) on the Egyptian Economy, with a Focus on the Steel Sector as One of the Most Affected Industries
On Monday, September 8, 2025, the General Authority for Investment and Free Zones (GAFI) hosted a conference to present and discuss the World Bank’s report assessing the impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM) on the Egyptian economy. The event focused in particular on the steel sector, which is among the most heavily affected industries. The conference was organized in collaboration with the Ministry of Industry, the Ministry of Planning and Economic Development, the Ministry of International Cooperation, the General Organization for Export and Import Control (GOEIC) under the Ministry of Investment and Foreign Trade, the Egyptian Environmental Affairs Agency (EEAA), as well as representatives of the Federation of Egyptian Industries and private sector stakeholders involved in CBAM compliance.
In her opening remarks, Dr. Dalia El-Hawary, GAFI Deputy CEO, emphasized that GAFI is holding a series of sustainability-focused conferences targeting the private sector to address the implications of CBAM, which the EU has announced will take effect in January 2026. She noted that the mechanism introduces new requirements for manufacturers and exporters and will affect thousands of Egyptian companies in sectors such as steel, aluminum, cement, and fertilizers.
Dr. El-Hawary highlighted the key findings of the World Bank’s August 2025 report on the economic impact of CBAM and the introduction of a carbon price in Egypt. Preliminary results suggest a potential loss to Egypt’s GDP amounting to hundreds of millions of dollars, with several sectors, particularly aluminum and steel, expected to face significant pressure due to their high carbon emission levels.
She stressed that, while CBAM presents challenges, GAFI sees it as an opportunity to promote sustainable manufacturing practices. Effective engagement with CBAM, she said, requires a genuine partnership between the government and the private sector to ensure investment continuity, safeguard the competitiveness of Egyptian exports, and enhance their access to global markets.
Dr. El-Hawary explained that GAFI has developed an internal action plan aligned with the national strategy for dealing with CBAM, built on three key pillars:
1. Enhancing investment promotion efforts for sustainable projects;
2. Facilitating and incentivizing green investments and the transition to clean energy to help the private sector reduce emissions; and
3. Strengthening business sustainability, raising awareness, building capacities, providing technical support, and creating platforms for dialogue with various stakeholders, particularly the private sector.
She concluded her remarks by calling on public and private sector participants to view CBAM as an opportunity and the beginning of a new era of sustainable competitiveness that would position Egypt as a key player in the global green economy and supply chains.
In her presentation, Dr. Nermeen Aboul Atta, Advisor to the Deputy Prime Minister for Industrial Development, Advisor to the Minister of Industry for Sustainable Development, and Head of the Technical Secretariat of the ministerial committee formed by Prime Ministerial decree to address CBAM, discussed several key issues. She elaborated on the efforts of the Technical Secretariat, which includes all relevant government entities and private sector representatives, to enhance national readiness for CBAM compliance. Dr. Aboul Atta stressed the importance placed on this matter by Egypt’s political leadership, especially regarding direct engagement with the private sector. She provided a detailed overview of the affected sectors and facilities, with a special focus on the steel industry, and concluded by outlining the steps taken so far as well as the next actions planned on this critical file.
In his opening speech, Eng. Essam El-Naggar, Chairman of GOEIC, stressed that the climate challenges facing the planet require joint efforts by government, institutions, and the private sector to develop urgent solutions to reduce carbon emissions and achieve the Sustainable Development Goals (SDGs). He reaffirmed GOEIC’s commitment to international quality and safety standards, its role in supporting Egyptian industry and assisting exporters in aligning with global standards, and the government’s commitment to international agreements on emission reductions. He also highlighted GOEIC’s role in reducing the cost of verification and validation processes, which remain one of the main barriers to the voluntary carbon market in Egypt.
From the Ministry of Planning and Economic Development, Dr. Samar Al-Ahdal, Supervisor of the European Cooperation Sector, presented the Ministry’s initiatives and efforts to coordinate with bilateral and multilateral development partners to secure grants that support sectors affected by the carbon border tax. Chief among these is the “Green Sustainable Industries Program,” with a budget of €271 million to support the most impacted companies.
Following the opening session, specialized sessions were held by GOEIC representatives, offering practical guidance on preparing CBAM reports in line with the latest European Commission updates. Additional technical sessions were led by the EEAA, focusing on applying environmental standards and requirements for the steel industry to achieve low-carbon manufacturing.
