Hear first-hand from the European Commission’s Director-General of TAXUD Gerassimos Thomas on the objectives of CBAM, which is now in its transitional phase. We will also be joined by experts from the private sector and academia, who will be speaking on two panels – first on the implications of CBAM for Singapore and Southeast Asia, and second on the implementation of CBAM during this transitional period.
Businesses, policy makers, and academia are invited to attend this event to build their understanding around the CBAM, its impact on Singapore and the region, and for companies, their operations. This event also hopes to be a platform for discussion and input from stakeholders in Singapore and the region.
The European Commission’s proposal for a carbon border adjustment mechanism (CBAM), was first released in July 2021, as part of the “Fit for 55” legislative package aimed at reducing the EU’s greenhouse gas (GHG) emissions by 55% from the 1990 benchmark level by 2030. As a measure against carbon leakage, the mechanism aims to equalize the carbon prices of certain EU products and similar or equivalent products imported from outside the EU in order to prevent production transfer to countries where climate change measures are lower than in the EU, with the aim of creating a level playing field for the companies producing in the EU.
The text of the CBAM legislation was agreed at the trilogue discussions in December 2022, with the scope covering goods from the cement, fertilizers, hydrogen, iron and steel, aluminium, and electricity sectors. The transitional phase for reporting started on 1 October 2023 and will run for 18 months until the end of 2025, when the permanent system enters into force.
Exporters of the covered goods from third countries like Singapore and others in the region will be impacted by the CBAM to varying degrees. The topic was raised in Singapore’s parliament in 2021, where the Ministry of Trade and Industry noted that they expect “limited impact” on Singapore’s domestic exports to the EU when the CBAM is implemented, as affected products constitute around only 0.08%, or S$14 million of total exports to the EU. Nevertheless, the Ministry noted that the CBAM should be consistent with WTO principles and not raise barriers to international trade. In particular, it should be applied in a non-discriminatory manner and take into account existing carbon taxation or other mitigation mechanisms implemented by exporting countries.