Exporters fear costs of EU carbon scheme

A stack of steel rods at a steel factory in Rayong. The imposition of CBAM is expected to affect the prices of exports of steel, iron and aluminium.

Asian exports could potentially face a higher cost burden as the EU is preparing to launch a new regulation pertaining to imported carbon-intensive commodities later this year, experts say.

As part of the EU's schemes to achieve climate neutrality by 2050, also referred to as the EU Green Deal, the Carbon Border Adjustment Mechanism (CBAM) is set to be the world's first trade-related mechanism aimed at reducing carbon leakage through the imposition of a border tariff.