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Carbon Border Adjustment Mechanism (CBAM)

Stay Ahead in the Carbon-Conscious Era

What is CBAM?

The Carbon Border Adjustment Mechanism (CBAM) is a pioneering policy tool implemented by the European Union to address carbon leakage and promote global climate action. It aims to level the playing field by imposing a carbon cost on imports of certain goods from outside the EU, aligning them with the bloc’s ambitious carbon reduction targets. By linking trade with environmental responsibility, CBAM seeks to foster a global market that prioritizes carbon efficiency.

Impact of CBAM on International Trade and Carbon Emissions

Influence on Global Trade

CBAM adjusts the cost of imports based on their carbon content, incentivizing countries and companies outside the EU to adopt greener practices to remain competitive.

By putting a price on carbon-intensive imports, CBAM aims to significantly reduce global carbon emissions, encouraging a shift towards more sustainable production methods.

The mechanism is expected to have a profound effect on international trade dynamics, possibly leading to shifts in supply chains and trade partnerships.

CBAM serves as a catalyst for other countries to strengthen their climate policies, aligning with global efforts to combat climate change.

CBAM Roll-Out Plan

Carbon Border Adjustment Mechanism (CBAM) Timeline

Understanding CBAM Regulations

Foundational Framework

CBAM, part of EU climate policy, aims to prevent carbon leakage by equating the carbon cost of imports with that of EU-produced goods.

Scope and Coverage

CBAM targets imports of carbon-intensive products like steel, cement, fertilizers, aluminium, hydrogen, and electricity.

Compliance Mechanics

Importers must purchase CBAM certificates, priced according to the EU's carbon pricing, to cover the carbon emissions of their goods.

Carbon Reporting and Verification

Businesses must report the carbon content of imports accurately, verified by independent bodies to ensure CBAM compliance.

Adjustment and Rebate System

CBAM includes adjustments for carbon prices paid in the product's country of origin and potential rebates in certain cases.

Penalties for Non-Compliance

There are strict penalties for not adhering to CBAM regulations, including fines and possible exclusion from the EU market.

Industries/Sectors covered in CBAM

The CBAM will initially apply to imports of certain goods and selected precursors whose production is carbon intensive and at most significant risk of carbon leakage. With this enlarged scope, CBAM will eventually – when fully phased in – capture more than 50% of the emissions in ETS covered sectors. 
Iron & Steel

How does Credibl help?

Effective ESG data management is essential for businesses to measure, monitor, and report on their sustainability efforts accurately. Our Enterprise ESG Data Management solution offers a comprehensive platform to curate and streamline ESG data efficiently. The platform is based on four pillars – Consult, Measure, Manage, Report 

Expert consulting & advisory with in-depth CBAM reporting strategy.

This involves expert consulting and advisory services, focusing on in-depth CBAM reporting strategies. It includes:

Accurately measure your product’s direct and indirect GHG emissions

This step is crucial for accurately measuring a product’s direct and indirect greenhouse gas (GHG) emissions. It includes:

Effortlessly manage all your emission data

This pillar ensures efficient management of all emission data. It includes:
ESG Data Collection & Validation Solutions

Simplified CBAM reporting and verification

This final step simplifies CBAM reporting and verification processes. It includes:

We offer a complete CBAM reporting solution

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