Abstract

The EU Carbon Border Adjustment Mechanism (CBAM) is designed to prevent carbon leakage, yet its effects may extend beyond the relationship between the European Union and its trading partners. In Central Asia the CBAM may create a new regulatory context, in which reduction of greenhouse gas emissions (GHG emissions) depends not only on state climate policies, but also on strategic decisions made by companies. These decisions include whether companies invest in carbon accounting, disclosure, risk management and decarbonization, or whether they redirect trade, production or investment flows toward less regulated markets.

This paper examines the CBAM through the lens of regulatory asymmetry in Central Asia. It argues that differences in climate regulation, emissions monitoring and corporate disclosure may create uneven incentives for companies operating under new carbon-related market access requirements. The paper focuses on Kazakhstan and Uzbekistan as two Central Asian economies where climate regulation, corporate reporting and responses to external carbon requirements are developing under different institutional conditions. The analysis combines regulatory mapping with a review of publicly available corporate reports to assess how companies disclose emissions, climate-related risks and adaptation strategies. The paper does not claim to establish actual carbon leakage. Rather, it examines the conditions under which the CBAM may generate regional spillover risks by influencing corporate choices between compliance, decarbonization and market redirection. By linking the CBAM with corporate governance and decision-making at the company level, the paper contributes to the debates on sustainable development in Central Asia and highlights the role of companies in shaping low-carbon transition outcomes.