Azerbaijan prepares new draft law for implementation of carbon tax

Azerbaijan is preparing a draft law on carbon tax application, the President of COP29 and the country's Minister of Ecology and Natural Resources, Mukhtar Babayev, said at the “Raising Ambition, Enabling Action: COP29 Sustainable Business Forum” event on May 17, Azernews reports.

He made the remark while speaking about the preparation of a number of draft laws to meet new climate challenges.

"In developed countries, a carbon emission tax is applied. Our country is preparing a draft law on this issue, which is in its final stage," emphasized Babayev.

He mentioned that the EU will introduce this tax on products from carbon-intensive industries, and this should be taken into account by Azerbaijani exporters of certain types of products.

"We are open to receiving proposals from the private sector regarding the alignment of business practices and Azerbaijani laws with the global climate agenda. We will work with deputies for the prompt review and approval of the necessary laws," noted Babayev.

According to him, Azerbaijan's fulfillment of its climate commitments (reducing greenhouse gas emissions by 40 percent) and increasing the share of renewable energy in the energy balance to 33 percent will bring long-term benefits to the country.

He stressed that decisions at various levels in Azerbaijan demonstrate adherence to the green agenda.

"For example, the import of electric vehicles is exempt from duties and taxes. This was done as part of the development of the electromobility process in the country. Other steps will also be taken. An important task is the creation of green economy zones and green energy in Azerbaijan," said the minister.

Babayev also mentioned the intensification of work on establishing the export of green energy from the Caspian Sea to the EU.

"We are negotiating at all levels, and business has an important role in this process ahead of COP29," added Babayev.

Azerbaijan's commercial banks should envisage 'green' loans in their portfolios and follow climate policy, President of COP29 and Minister of Ecology and Natural Resources of Azerbaijan Mukhtar Babayev noted.

“The banks must implement a well-thought-out climate policy and introduce a climate component and responsibility measures into their portfolios. This is aimed at the long term,” the minister explained.

According to him, to finance green projects, special types of loans and mechanisms are needed, and banks should work in this direction.

“The banks should offer 'green' loans to those projects that are aimed at protecting the environment. They should adopt international practice. Regulators represented by the government and the Central Bank are ready to facilitate this,” Babayev emphasized.

To note, 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 center of the world and will receive about 70–80,000 foreign guests.

The United Nations Framework Convention on Climate Change is an agreement signed at the Earth Summit in Rio de Janeiro in June 1992 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. Unless the parties agree otherwise, the COP is held annually. The first COP event took place in March 1995 in Berlin, and its secretariat is located in Bonn.