BACK EU's CBAM Measures Are About to Begin: How Should Thai Enterprises Respond?
The Carbon Border Adjustment Mechanism (CBAM) may not be widely recognized by the general public, but it’s a critical concept for industrial business operators. CBAM is a European Union (EU) mechanism that places a carbon price on certain imports to prevent high greenhouse gas (GHG) emissions from entering EU member states. Although CBAM is currently in its initial phase (October 1, 2023 – December 31, 2025), Thai businesses and industrial estates must adapt quickly to comply with CBAM regulations, as they will directly impact exports to the EU.CBAM Requirements in the European Union
CBAM is part of the Fit for 55 package under the European Green Deal, aimed at reducing greenhouse gas (GHG) emissions by 50–55% by 2030 and achieving net-zero emissions by 2050. Currently, in the transitional period, importers must report their production process carbon emissions to the CBAM central coordinating authority. Non-compliance could lead to fines ranging from €10 to €50 per ton of carbon. In 2026, CBAM will be fully enforced, expanding the list of regulated products and requiring importers to have verified carbon emissions reports and purchase CBAM certificates for emissions exceeding the EU’s benchmark. Certificates must be submitted annually by May 31.How Thai Businesses Can Prepare for CBAM
CBAM’s regulations will have a direct impact on Thai exporters and industrial estates producing goods to the EU, as importers will require CBAM certificates to present to the CBAM authority. To avoid disruption when CBAM is fully enforced in 2026, Thai businesses should begin preparations now by:
1. Disclosing Carbon Emissions in Production Processes
To align with CBAM requirements, the Thai government has encouraged businesses to disclose carbon emissions data from their production processes. This includes preparing carbon footprint labels for products, joining voluntary carbon trading programs, or setting up operations in industrial estates that manage energy efficiently.
2. Staying Updated on Related Policies
As CBAM is still in its transitional phase, businesses must stay informed on the latest developments from the EU. It is also important for them to engage with relevant agencies to enhance their ability to negotiate in the future.
Businesses Affected in the First Phase
Businesses Affected in the First Phase
- The first phase of CBAM applies to seven categories of imported goods:
- Iron and steel
- Aluminum
- Cement
- Fertilizers
- Electricity
- Hydrogen
- Downstream products in these categories
According to data, Thailand currently exports products in these seven categories, valued at 28.573 billion THB annually. However, the implementation of the CBAM may result in a decline in exports if businesses fail to meet its requirements, as importers might reduce their imports or opt for locally produced goods within the EU to cut costs.
Green Energy Solutions at 304 Industrial Park
Although CBAM may present challenges for Thai businesses, it also serves as a catalyst for increasing environmental awareness among companies. For those concerned about CBAM, one solution is to establish operations in environmentally focused industrial estates, such as the 304 Industrial Park. This park continuously develops renewable energy solutions. The NPS power plant, for example, manages efficient power systems within the park, with a biomass power plant generating 398 MW and solar floating systems producing 150 MW. These clean energy solutions help businesses meet CBAM’s environmental sustainability goals, making compliance with EU regulations much more attainable.
Information Source:
- https://www.greenpeace.org/thailand/story/20621/climate-renewable-energy-thailand-net-zero-emission-plan/
- https://www.scb.co.th/th/personal-banking/stories/business-maker/net-zero-in-action.html
- https://sangchaigroup.com/what-is-net-zero-and-why-is-it-important/
- https://techsauce.co/news/net-zero-global-climate-change-action
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