CBAM Explained: Key Insights For Asian Exporters To The EU
To succeed in the EU market, you need to strengthen green capabilities and have a clear understanding of new regulations like the Carbon Border Adjustment Mechanism (CBAM). Set to take effect this year, CBAM will impact Asia's manufacturers in production and trade. Discover how to stay ahead with our experts’ insights on CBAM!
What is CBAM?
Carbon Border Adjustment Mechanism (CBAM) is a mechanism for imports of goods from outside the EU: a system that puts a fair price on the carbon emitted during production and that encourages cleaner industry in non-EU countries, according to European Commission. It requires Asian exporters to adopt solutions to minimize greenhouse gas emissions during manufacturing.
The Carbon Border Adjustment Mechanism (CBAM) will first directly affect industries such as cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity.
By the end of 2025, the European Commission will review the CBAM's effectiveness and may expand its scope to cover more products and services, including the entire value chain and possibly even "indirect emissions," such as carbon emissions from electricity used in manufacturing goods.
How can Asia companies prepare for CBAM?
For Asian companies navigating the CBAM, it’s crucial to get ahead of the curve. Experts suggest that manufacturers in high-risk sectors mentioned above focus on reducing carbon emissions as soon as possible to meet EU standards.
Now is the time to lay the groundwork by developing a clear strategy to adapt your production processes, ensuring you remain competitive and effectively manage emissions throughout your production chain.
Future-proof your business with I-REC
With CBAM tightening the screws on carbon emissions, companies are being urged to transition to clean energy solutions to stay competitive. This transition isn’t just about meeting requirements; it’s about seizing the opportunity to embrace I-REC (International Renewable Energy Certificates) as a way to demonstrate their use of clean energy and enhance your green credentials.
By obtaining I-RECs, you can demonstrate your commitment to clean energy and gain a competitive advantage in the export market by differentiating yourself from others. As the leading certificate in Asia's EAC market, I-REC is recognized by major sustainability reporting programs like the Greenhouse Gas Protocol and RE100. It is also a widely used instrument in over 60 countries.
Transform CBAM challenges into growth opportunities
With GreenYellow, you can turn CBAM challenges into opportunities for growth. Understanding the market's needs, we offer a comprehensive range of energy transition services, including the provision of I-REC renewable energy certificates. These services help businesses reduce Scope 2 emissions, thereby lowering your GHG emissions.
By obtaining I-REC certificates, businesses not only meet increasingly stringent market standards but also gain a competitive advantage over their competitors. This is particularly important in a context where consumers are increasingly concerned with environmentally friendly products and services.
Contact us at GreenYellow Asia today to prepare in advance for CBAM!
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