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Azerbaijan's Tax Service representative talks on fiscal measures for decarbonization

Green Economy Materials 17 May 2024 20:34 (UTC +04:00)
Lada Yevgrashina
Lada Yevgrashina
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BAKU, Azerbaijan, May 17. The Azerbaijani government is in the process of drafting third-generation national climate plans (Nationally Determined Contributions) aligning with the country's obligations under the UN Paris Climate Agreement, Deputy Chief of Service, 3rd Degree State Tax Service under the Ministry of Economy Samira Musayeva said at the Enhancing Ambition, Enabling Action: COP29 Sustainable Business Forum, Trend reports.

"These documents align with the country's commitments under the UN Framework Convention on Climate Change. Climate objectives will be integrated with the country's economic and investment policies, ensuring coordination," she stated.

The official mentioned that various state institutions and businesses in Azerbaijan were actively involved in this endeavor.

"In consideration of contemporary challenges and the country's economic development, strategic geographic location, and export markets, relevant ministries and agencies are engaged in this process," Musayeva elaborated.

Regarding decarbonization measures, she indicated that fiscal initiatives could commence in 2025, with ongoing consultations with Boston Consulting Group on this matter.

"All fiscal regulation instruments will be aligned with national decarbonization efforts," Musayeva affirmed.

The exploration of carbon tax implementation in Azerbaijan is also underway.

"While Azerbaijan currently lacks a carbon dioxide emissions trading system, it's crucial to acknowledge the EU's plan to introduce cross-border carbon emissions taxes in 2026. This may impact the competitiveness of Azerbaijani exporters in global markets," she emphasized.

The EU will encourage technologies that reduce carbon emissions and the availability of "green" certificates.

To note, EU member states agreed to apply carbon taxes at the border to select products imported from third countries, starting in 2026, including cement, aluminum, fertilizers, electricity, iron, and steel. However, goods valued at less than 150 euros will be exempt from these rules initially, with the list of affected products expected to expand in the future.

This November, Azerbaijan will host COP29. This decision was made at the COP28 plenary meeting held in Dubai on December 11 last year. Baku will become the world's center, receiving about 70–80,000 foreign guests.

At the Earth Summit in Rio de Janeiro in June 1992, the United Nations signed the Framework Convention on Climate Change as an agreement to prevent dangerous human interference with the climate system. COP - the Conference of the Parties - is the highest legislative body overseeing the implementation of the Framework Convention on Climate Change. There are 198 countries that are parties to the Convention. The COP takes place annually, unless the parties agree otherwise. The first COP event took place in March 1995 in Berlin, and its secretariat is located in Bonn.

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