EU Carbon Border Adjustment Mechanism Damaging ASEAN Businesses?

The introduction of the European Union (EU) Carbon Border Adjustment Mechanism (CBAM) has significant implications for global trade flows and investment. The Association of Southeast Asian Nations (ASEAN), the EU’s third largest trading partner after China and the US, is particularly impacted by CBAM. Hence, ASEAN-based companies will need to understand, identify and assess the financial impact, and plan for the broader challenges arising from CBAM’s introduction.

What CBAM Is and Why It Matters

In April 2023, the European Parliament approved key elements of the “Fit for 55” legislative package:

• The EU Emissions Trading System (EU ETS) reform; and
• The ...