2023-07-06 07:40:38
Today, decarbonization is a matter of life or death for Tunisian exporting companies. The entry into force of the carbon border adjustment mechanism, also called carbon border tax, can harm SMEs if they persist in inaction.
Strengthened by its competitive advantages, such as proximity to Europe, the rich reservoir of human capital, the integration of the private sector into global value chains, etc., Tunisia has long rested on its laurels. However, on the economic level, many things have changed in recent years.
The transition to a green and sustainable economy, motivated by the fight once morest climate change, is, in this sense, one of the most profound changes that the various economies aim to achieve in the medium term. Indeed, to achieve carbon neutrality, several actions have been taken on a planetary scale. This involves, for example, accelerating the energy transition, developing the circular economy, implementing CSR policies, etc. But also penalizing polluters, in particular polluting companies, the objective being to encourage them to adopt new models respectful of the environment. Among the tools adopted under the “polluter pays” principle is the carbon border adjustment mechanism (Macf), also known as the “European carbon tax”, which was introduced by the European Union at the end of 2022.
How will the border carbon tax work?
Perceived by some observers as a protectionist maneuver aimed at protecting the European market from competition from emerging countries, this new tax will enable the European Union to extend its environmental standards to companies exporting to its territory.
In concrete terms, the introduction of this mechanism will require European Union importers to buy “carbon” certificates corresponding to the carbon price that would have been paid if the goods had been produced in accordance with European Union rules on carbon pricing.
The price of the certificates will be calculated according to the average weekly price of the EU Emissions Trading System (ETS) allowances sold at auction. It should be recalled here that the Seqe is the Union’s emission quota system which sets a ceiling for the quantity of greenhouse gas emissions that can be released by industrial installations in Europe and which allows producers to sell and trade emission allowances.
According to European lawmakers, the Macf will help reduce the risk of “carbon leakage”, a phenomenon reflecting the movement of greenhouse gas-emitting industries outside the European Union to avoid strict environmental standards.
This new carbon tax will apply, from October 1, 2023, to certain products, such as cement, iron, steel, aluminum, fertilizer, electricity, automotive components and hydrogen, and should subsequently be extended to other sectors, such as textiles and the food industry. It will only really come into force at the end of the transition phase (2023-2025), during which importers will have to declare the carbon emissions of imported goods without having to pay the additional cost.
Exporting companies harmed?
Indeed, the entry into force of this mechanism will not be without effect on the Tunisian export sector since the European market monopolizes 75% of Tunisian exports. In other words, the application of the new tax to Tunisian products exported to Europe will result in an additional cost that will affect the competitiveness of Tunisian companies, which are already small and weakened by the succession of exogenous shocks.
Today, the green transition of the Tunisian industrial fabric is no longer a choice. Production units are now forced to reduce their carbon footprints, by accelerating their energy transitions or adopting new, less polluting technologies in the sole hope of not losing market share and sometimes the only market which allows them to grow.
To help companies prepare for this major change, certainly virtuous, but which requires substantial investment, the Ministry of Industry, Energy and Mines has looked into a program called “SOS decarbonation” which will support beneficiary companies in ensuring their energy and ecological transition. Its objective is to pave the way for an upgrade of industrial processes. A job that is not, however, easy and that requires time, money and skills. Today, decarbonization is a matter of life or death for Tunisian exporting companies. This is why it is important to accelerate this transformation which can, paradoxically, generate opportunities for Tunisia.
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