What is the CBAM

The European Commission announced in July 2021 that in order to achieve the goal of net-zero emissions by 2050, the “Carbon Border Adjustment Mechanism” (CBAM) will be implemented on a trial basis in 2023 and formally implemented in 2026, requiring cement, Importers of five commodities, steel, aluminum, fertilizer, and electricity, purchase certificates based on the carbon content of the products to reflect the carbon cost of the products.

The decision of the European Union announced that the era of building new rules for international trade with carbon barriers is coming. If there are 212 items of goods in Taiwan totaling 24.5 billion Taiwan dollars, if they have not paid the carbon fee in Taiwan, they will be subject to carbon tariffs when they enter Europe.

At present, the implementation key points announced by the EU are: the initial carbon content is mainly the greenhouse gas emitted directly in the process, but indirect emissions will be included in the future; if the country of origin has a carbon fee mechanism, it can be deducted from the CBAM certificate that needs to be purchased; Prices will be calculated based on the weekly carbon market closing price.

Although CBAM has raised doubts about whether it violates the WTO's principle of non-discrimination, Taiwan is an export-oriented economy of small and medium-sized enterprises and lacks bargaining chips.