Water security could affect the emissions profile of export industries
Expanding desalination capacity across North Africa could have implications for the carbon intensity of industrial products exported to Europe, particularly where additional electricity demand is met with carbon-intensive energy sources.
The issue was raised by a Morocco-based consultant at Oman Climate Week, with the comments reported by Carbon Pulse on 22 September. The discussion comes as countries across the Maghreb seek investment and infrastructure responses to increasing water scarcity.
For industrial exporters, the potential CBAM impact is conditional rather than automatic. Energy consumed to secure additional water supplies could increase production-related emissions where the resulting emissions fall within the applicable calculation for a covered product.
Desalination is not itself subject to CBAM
Desalination does not constitute a separate category of goods subject to the Carbon Border Adjustment Mechanism. Any resulting effect on a company’s carbon-border liability must instead be determined under the rules applying to the specific industrial product being exported to Europe.
That includes the applicable system boundaries and the treatment of emissions associated with energy use. Consequently, greater reliance on desalination cannot by itself be translated into a higher CBAM charge for every exporter.
The relevant outcome depends on several factors, including the source of electricity, the industrial production process and the methodology used to allocate emissions to the covered product.
Water and electricity decisions become increasingly connected
The issue creates a broader planning consideration for industrial companies operating in water-stressed regions. Investment in reliable water supplies can protect production from physical constraints, but the energy required to provide that water can influence both operating costs and the emissions profile of production.
For industrial planners, water procurement and power procurement may therefore need to be evaluated together rather than as separate infrastructure decisions.
Managing resilience without raising product carbon intensity
The underlying challenge for exporters is to improve water security while limiting any unnecessary increase in the emissions intensity of the products that depend on additional water infrastructure.
As Maghreb industries prepare for European carbon-border requirements, the interaction between water availability, energy consumption and production emissions could become another consideration in the competitiveness of covered exports.
