- The new EU carbon tariff will have a significant impact on businesses, The Conference Board report highlights
BRUSSELS, Sept. 28, 2023 /PRNewswire/ -- European importers face rising prices and administrative hurdles as the EU's new carbon tariff takes effect, as detailed in a new report from The Conference Board. The report comes in the run-up to the first phase of implementation (from 1 October) of the EU's Carbon Border Adjustment Mechanism (CBAM), a system that will tax imports of carbon-intensive goods, closing the price gap with products manufactured in the EU.
Navigating Europe's carbon tariff: What is CBAM and what does it mean for businesses? surveyed European members of The Conference Board on how they expect CBAM to impact their companies. 83 percent of respondents (primarily senior procurement and sustainability executives) anticipate prices will increase, and 75 percent expect CBAM to influence their purchasing decisions in the future.
“Our European-based members are clear that the implementation of CBAM will increase prices for carbon-intensive products, possibly with downstream effects for consumers,” said Sara Murray, International Managing Director of The Conference Board. “Our latest insights will help our members better understand their responsibilities and the challenges they need to prepare for over the next 18 months.”
Among the report's key insights:
Prices for regulated products are expected to increase immediately from the start of implementation, years before the first tariffs are charged:
Lack of verification capacity can create obstacles in key places:
Unequal customs capacity across the EU poses additional challenges to CBAM implementation, putting the onus on Brussels to take action:
Current attempts to alleviate the administrative burden are likely to prove insufficient:
"Without swift action to address the administrative issues that importers will begin to face from next week, there is a risk that CBAM will act as a drag on the European economy," said Anuj Saush, head of the European Centre. ESG from The Conference Board. "The six categories of goods regulated by the legislation represent 4.95 percent of all EU imports, valued at €133.21 billion. Companies importing goods to countries such as Belgium, Italy and Ireland should carefully examine how they are doing to meet demand in the coming months."
The effects will vary widely depending on the origin of the imports:
About The Conference Board The Conference Board is the member-driven think tank delivering Trusted Insights for What's Ahead™. Founded in 1916, we are a nonpartisan, nonprofit entity that holds 501(c)(3) tax-exempt status in the United States. www.ConferenceBoard.org
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