CBAM Impact on Egypt: Steel, Fertilisers, and the EU Export Relationship

Egypt is one of Africa's largest exporters of CBAM-covered goods to the EU, primarily steel and fertilisers. This guide explains Egypt's CBAM exposure and what Egyptian exporters must do.

Published April 2026·Last updated April 2026·carbonborderadjustment.co.za

Egypt and CBAM: A Major African Exporter Faces the Carbon Gate

Egypt is one of Africa's most significant exporters of CBAM-covered goods to the EU, with well-established steel and fertiliser export relationships.

Egypt's CBAM-Covered Export Profile

Steel: Egypt uses electric arc furnaces (EAF) fed by scrap steel. EAF steelmaking has lower embedded carbon than blast furnace steelmaking, but Egypt's electricity grid is predominantly fossil fuel-based.

Fertilisers: Egypt produces ammonia and urea using natural gas from its domestic gas fields (including the Zohr field). Natural gas-based ammonia production has lower embedded carbon than coal gasification.

Aluminium: Egypt's aluminium production at the Egyptian Aluminium Company (EGAL) in Nag Hammadi uses electricity from the Aswan High Dam — a hydropower advantage.

The Carbon Pricing Gap

Egypt does not have a national carbon tax. This means Egyptian exporters cannot claim a carbon price credit against their CBAM liability — a commercial disadvantage relative to SA exporters who can claim the SA carbon tax credit.

The Compliance Pathway

Egyptian exporters should calculate actual embedded carbon, obtain third-party verification, and provide verified data to EU buyers. Given Egypt's natural gas advantage in fertilisers and hydropower advantage in aluminium, actual data will likely be significantly lower than EU default values.

For a complete CBAM compliance registration pathway, visit the Digital Product Passport Registry.

Frequently Asked Questions

Which Egyptian exports are subject to CBAM?

Egypt's primary CBAM-covered exports to the EU are: (1) Steel — Egypt has significant electric arc furnace (EAF) steelmaking capacity and exports rebar, wire rod, and flat products; (2) Fertilisers — Egypt produces ammonia and urea using natural gas; (3) Aluminium — Egypt has some aluminium production capacity at the Nag Hammadi facility.

Does Egypt have a carbon tax?

As of 2026, Egypt does not have a national carbon tax or emissions trading system. Egypt has committed to developing a carbon market under its NDC, but no operational carbon pricing mechanism exists. This means Egyptian exporters cannot claim a carbon price credit against their CBAM liability.

What is Egypt's CBAM advantage in fertilisers?

Egypt produces fertilisers using natural gas from its domestic gas fields. Natural gas has a lower emission factor than coal for ammonia production, giving Egyptian fertiliser producers a carbon advantage over producers using coal gasification.

How does CBAM affect Egypt-EU trade relations?

CBAM adds a compliance layer to Egypt-EU trade. Egyptian exporters must now provide verified embedded carbon data to their EU buyers or face higher default-based CBAM costs. The EU-Egypt Association Agreement provides preferential tariffs, but CBAM applies regardless of trade agreement status.

What should Egyptian exporters do to prepare for CBAM?

Egyptian exporters should: (1) identify covered products by CN code; (2) calculate actual embedded carbon; (3) engage an accredited third-party verifier; (4) register at the Digital Product Passport Registry; and (5) provide verified data to EU buyers.

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