Is Your Supply Chain Ready for the EU’s Carbon Border Adjustment Mechanism?

Climate change is a global problem that needs global solutions.

While the EU raises its climate ambitions, and third countries might have less stringent climate policies, there is a risk of so-called “carbon leakage.”

Carbon leakage occurs when companies based in the EU move carbon-intensive production abroad to countries with less stringent climate policies, or when EU products get replaced by more carbon-intensive imports.

The EU’s Carbon Border Adjustment Mechanism (CBAM) is the EU tool to impose a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, to encourage cleaner industrial production in non-EU countries, and to protect local industries from unfair competition.

CBAM will enter its final regime by 2026 and will ensure the carbon price of imports is equivalent to the carbon price of domestic production and that the EU’s climate objectives are not undermined. How?

By recording that a price has been paid for the carbon emissions generated in the production of certain goods imported into the EU. It is NOW a pivotal time to rethink supply chains.

So, how can you monitor your supply chain and navigate the complexities of ESG data compliance? KYMA TEAM is now partnering with ESG Flo by Bain & Company, the ESG Platform that uses AI and cutting-edge technology to get audit-ready metrics for all your ESG reporting and compliance needs.

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