Many countries around the world are actively trying to find solutions to Climate Change. Some countries, such as the United States of America, have chosen to incentivise green industries in the hope that they will naturally replace more polluting industries. Other countries are targeting polluting industries, ensuring they pay a fair price for the emissions they output.

The European Union (EU) have recently launched the Carbon Border Adjustment Mechanism (CBAM), which hopes to spearhead the EU to the forefront of worldwide green policy. CBAM will replace the EU Emissions Trading System and hopes to capture “Carbon-leakage”, meaning that importers in the EU pay a fair price for imports. Exporters will now need to report the emissions produced when manufacturing their goods, which EU importers will then link to import declarations as part of a quarterly report. The following six sectors affected are:

• Aluminium
• Iron & Steel
• Cement
• Fertilizer
• Electricity
• Hydrogen

Affected companies in the UK must act fast to remain compliant. Not only will compliance allow companies to protect current EU exports, but there will be strong potential to win over new customers if good compliance and green credentials can be demonstrated. Many other countries, including the UK, may choose to adopt a similar framework over the coming years, so you may stand to gain an advantage if new compliance measures are swiftly adopted.

Business West can offer consultancy in this area, advising how CBAM will affect your business, and what you can do to remain compliant in the face of these latest changes to export. If you think this will affect your business get in touch now.