Blue Carbon Market – a solution to TT’s Export Tax?

Can Blue Carbon MRV be a Solution to the UK Carbon Border Adjustment Mechanism (CBAM)

On August 21, 2025 the British High Commission in Port of Spain launched its report titled, “The UK’s Carbon Border Adjustment Mechanism: Implications for Trinidad and Tobago”, in collaboration with The University of the West Indies, St Augustine. A panel discussion followed bringing together representatives from the Government of the Republic of Trinidad and Tobago, civil society, private sector, and academia to explore and discuss the UK’s Carbon Border Adjustment Mechanism (CBAM) and its potential impact on Trinidad and Tobago.

The CBAM is a tool implemented by the United Kingdom (UK) to impose a fair price on carbon emitted during the production of carbon-intensive goods that enter the UK, and to encourage cleaner industrial production in non-EU countries. The CBAM is tied to environmental pledges made under the Paris accord. The report stated that global CBAMs present a significant economic challenge to Trinidad and Tobago owing to the country’s reliance on carbon-intensive exports. The report noted that, based on 2023 export figures, 33.18% of Trinidad and Tobago’s total global exports fall under the product scope of existing or planned CBAMs.

Coming into force in 2027, The UK’s Carbon Border Adjustment Mechanism (CBAM), implemented from 2027, will apply a carbon price on specific, carbon-intensive imported goods like aluminium, cement, and steel to prevent “carbon leakage”.

Trinidad and Tobago, however, has mangrove coverage at 7,532 hectares, with significant portions on the west coast. Mangroves are known as blue carbon storage sentinels. Blue carbon Monitoring, Reporting and Verification (MRV) in Trinidad and Tobago can potentially mitigate the impact of the UK’s CBAM by enabling the generation of high-quality carbon credits from mangrove conservation and rehabilitation, thereby reducing the embedded carbon in its exports. A robust MRV system provides verifiable data for these credits, creating a financial incentive for carbon reduction and enhancing the twin-island state’s overall carbon accounting under the Paris Agreement. For Trinidad, this means reduced CBAM costs, increased revenue from carbon credits, and potential financing for further decarbonisation efforts.

A strong blue carbon MRV system allows T&T to accurately quantify and verify the carbon sequestered and stored in its coastal ecosystems, like mangroves and seagrasses. Research work in Blue Carbon initiatives is currently undertaken by the IMA, which include piloting a blue carbon credit system with the Inter-American Development Bank, and conducting research to assess mangrove blue carbon storage for market participation. The IMA is focused on improving digital mapping, monitoring, reporting, and verification (MRV) of blue carbon ecosystems to enhance ecosystem services and create opportunities for livelihoods and revenue.