Illustrative image (Photo: VNA) Bangkok (VNA) – Thai business operators may not beready to comply with the Carbon Border Adjustment Mechanism (CBAM) of theEuropean Union (EU), according to Thailand’s Department of Trade Negotiations.
On December 13, 2022, the EU announced that it will implementCBAM, requiring all goods exported to the market to be taxed on carbon based onthe intensity of greenhouse gas emissions in the production process in the hostcountry. CBAM targets companies moving carbon-intensive production to countries with lessstringent environmental regulations to avoid paying higher costs for theircarbon emissions, thereby gaining a competitive advantage.
In the transitional phase of the implementation of the CBAM,from October 1, 2023, to December 31, 2025, companies that export to the EU arerequired to submit reports without fulfilling financial obligations.
During this period, importers must determine and document directand indirect emissions that occur in the course of the production process oftheir goods exported to the EU.
According to Auramon Supthaweethum, director-general of theDepartment of Trade Negotiations, the step alone is likely to pose challengesfor many companies because they lack necessary IT solutions for recording anddetermining carbon dioxide equivalent emissions.
The department has collaborated with the Thailand Greenhouse GasManagement Organisation, the TGO Climate Action Academy, and the Federation ofThai Industries to prepare stakeholders for the implementation of the CBAM onsix groups of imported goods including steel and steel products, aluminum,cement, fertilisers, electricity, and hydrogen.
EU importers of these goods will be required to reportgreenhouse gas emissions data from October 1, 2023, to December 31, 2025. FromJanuary 1, 2026, they will need to purchase CBAM certificates based on theirgreenhouse gas emissions quantities.
Auramon said that countries need flexibility and more time forreporting and data corrections because of their differences in confidential technology-related data reporting, readiness, and stage of development./.
