CBAM and the Road to Sustainability

What is CBAM and how will it impact your business?
The world’s first carbon border tax was introduced by the EU at the start of October 2023. The U.K. will follow in 2026.
The Carbon Border Adjustment Mechanism (CBAM) is the world’s first carbon border tax, created by the EU, with the aim of reducing carbon emissions. Its primary focus is to address an issue called ‘carbon leakage’ or offshoring emissions. This happens when companies transfer the production of goods to countries with lower emissions standards, often leading to an overall increase in emissions.

The first stage of the policy, which will be phased in over three years, came into force on 1 October 2023. This initial trial phase is focused on high emitting sectors, including cement, fertilisers, iron and steel, aluminium, hydrogen, and electricity. After this, CBAM will be gradually ramped up to include more sectors, until it comes into full force from 1 January 2026. Only then will the carbon price be charged.

What will companies need to do?

• Companies importing goods into the EU and in future the UK will need to work with their suppliers to gather necessary data. For example, asking for the upstream emissions or carbon footprints of each product or material.
• Companies importing goods into the EU/UK will need to quantify the financial risk of CBAM and impact of importation, then weigh up the pros and cons of production locations.
• Importers will need to consider the advantages and disadvantages of choosing low emitting suppliers outside of the EU/UK.
• Suppliers providing raw materials or goods to the EU/UK will need to provide emissions data or carbon footprints on products.
How can companies prepare for CBAM?
• Carrying out a scenario analysis to identify emissions related to CBAM-applicable imported goods and their likely impact.
• Engaging with suppliers and manufacturers to gather emissions data for imported goods. Here is an example of the Carbon Trust’s supplier engagement work.
• Involving climate risk and opportunity colleagues to calculate the tonnage of products and the resulting carbon price. This will determine how CBAM is likely to financially impact the company.
• Ensuring the company is registered for importing with relevant regulatory bodies.
• Assessing if goods are already carbon priced in the country of production or purchase to avoid double pricing.
• Establishing processes to collect emissions data, then systems to report and process payments according to CBAM’s regulations. responsibilities for these activities.

In the second section of our event, we will look at how companies view their carbon footprint and what steps they made to make themselves environmentally friendly with a guest speaker from Fox Group.

Our Patrons Ryan will talk about Energy credits.

Do you know the carbon footprint of your business? Santander can help you see how your business scores on ESG against globally recognised frameworks and will discuss the next steps in your journey to show you how to access reports and insights.

Book Here: https://www.tickettailor.com/events/prestonbid/1333155

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