Day: July 17, 2024

CBAM Emission Calculation Explained – A Supplier’s must read

Key points:

– Dual product streams refer to manufacturers producing low-carbon goods for regulated markets like the EU, while maintaining higher-emission production for markets without carbon pricing. This practice can slow global green technology adoption and disincentivize investors from committing to clean technologies due to market uncertainty and inconsistent carbon pricing signals.

– Dual product streams delay global emissions reductions, heightening the risk of severe climate change impacts, including unpredictable weather events, as the global response to climate goals remains fragmented.

– Dual product streams may lead to decreased trade flows to the EU as manufacturers shift focus to less regulated markets. As CBAM expands, exporters like China could adapt by maintaining dual production lines to cater to the EU while prioritizing other markets.

– A coordinated global carbon pricing system could reduce trade tensions and mitigate the risks of dual product streams. Integration of Emission Trading Systems (ETS) between the EU and other nations could streamline carbon pricing and investment, potentially eliminating market exclusions and fostering global decarbonization.

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