Thai exporters not quite ready for EU carbon-emissions reporting
Thai business operators may not be ready to comply with the Carbon Border Adjustment Mechanism (CBAM) of the European Union (EU).
The mechanism for imports of goods to the EU puts a price on the carbon emitted during production. CBAM is meant to support the EU's increased action for climate mitigation while ensuring World Trade Organisation compatibility.
In the transitional phase of the implementation of the CBAM, from October 1 of this year to December 31, 2025, companies that export to the EU are subject to a reporting obligation without financial obligations.
During this period, importers must determine and document direct and indirect emissions that occur in the course of the production process of their goods exported to the EU. This step alone is likely to pose challenges for many companies, as necessary IT solutions for recording and determining carbon dioxide equivalent emissions are often lacking, according to Auramon Supthaweethum, director-general of the Department of Trade Negotiations.
He made the comment after a CBAM seminar for Thai exporters.
The Department has collaborated with the Thailand Greenhouse Gas Management Organisation, the TGO Climate Action Academy, and the Federation of Thai Industries to prepare stakeholders for the implementation of the CBAM on six groups of imported goods: steel and steel products, aluminium, cement, fertilisers, electricity, and hydrogen.
EU importers of these goods will be required to report greenhouse gas emissions data from October 1 of this year to December 31, 2025, and from January 1, 2026, they will need to purchase CBAM certificates based on their greenhouse gas emissions quantities.
Discussions at the seminar focused on verification and accreditation agencies and concerns of Thai exporters, such as confidential technology-related data reporting, readiness, and differing situations of each country depending on their stage of development. Flexibility should be provided to developing countries, and more time should be allowed for reporting and data corrections, Auramon said.
The main reasons include the complexity of data reporting and penalties for inaccurate reporting.
Additionally, the Thai business sector seeks support from the EU, such as technical assistance for data reporting in the initial three-year transition period, the possibility to use local accredited verifiers in Thailand to reduce costs, and options for emissions reductions within the country to reduce CBAM certificate costs, Auramon added.
