This study examines the implications of the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) on key sectoral exports and renewable energy investments in ASEAN economies engaged in the Belt and Road Initiative (BRI). Using a global computable general equilibrium model, it simulates CBAM’s impacts on carbon-intensive exports—iron, steel, and aluminum—critical to BRI projects, and its potential to reshape trade dynamics. While the initial scope of the CBAM has limited effects on ASEAN exports, expanded coverage could cause notable declines especially in Indonesia, Malaysia, Thailand, and Vietnam. Beyond immediate trade implications, CBAM represents one of many drivers in greening the BRI, aligned with global climate agenda. China’s leadership in advancing renewable energy and low-carbon projects under the BRI plays a pivotal role in this transition. The study underscores how CBAM-induced compliance costs and green investments intersect, offering opportunities for ASEAN economies to enhance sustainability. By fostering renewable energy adoption and integrating green practices into BRI projects, ASEAN can leverage the global green transition to bolster economic resilience. This research provides insights into aligning regional priorities with international climate commitments while maintaining competitiveness in a low-carbon future.