The Thai Rubber Association has monitored the Carbon Border Adjustment Mechanism (CBAM) Measure of the EU. In a session held on 22 June 2022, the European Parliament (EP) voted to adopt draft legislation for the EU CBAM as proposed by the Commission on the Environment, Public Health and Food Safety (ENVI) on 21 December 2021. 

The news report states that CBAM will extend the originally proposed scope to also include organic chemicals, plastic polymers, hydrogen and ammonia in addition to the former five industries (electricity, iron and steel, cement, aluminum, and fertilizers). Moreover, it extends the CBAM to indirect emissions (CBAM calculations will include indirect emissions derived from the electricity used by manufacturers/ being emissions of the electricity used during the production process of those 9 in-scope products) in addition to direct emissions before. The EU has established a centralized EU CBAM authority to operate the CBAM system instead of 27 competent authorities. The CBAM transitional period starts testing the information reporting during 1 January 2023–31 December 2026 and will be fully operational from 1 January 2027. The exporters of 9 in-scope products will receive free allowances of certificates granted in accordance with the European Union Emission Trading System (EU ETS) to avoid trade barriers following non-discriminatory trading of WTO. However, free allowances granted to exporters and EU industries will be gradually decreased and fully phased out by 2034.

In addition to the CBAM legislation, the EU is concerned about climate change, loss of biodiversity, deforestation, and forest degradation. The EU attempts to roll out the regulation to support deforestation-free products or EU Regulation on Deforestation-Free Products, which identifies methods to control commodities related to deforestation; as a result, it will affect imported products and free-moving goods within the EU market. However, the EU has no intention of banning goods from any trading partner countries and is ready to negotiate. The EU supports all trading partner countries to be able to build supply chain that do not affect forest areas and the environment. Furthermore, the EU also planned to expand the cooperation framework to high-consumer countries such as the United States and China. However, there are doubts from some trading partner countries that the draft legislation is discrimination and protectionism for the EU market. 

The Thai Rubber Association will monitor the implementation of the EU measures or regulations that relate to the environment. Additionally, TRA will inform members and relevant parties to prepare to handle the CBAM measure and other measures that may affect Thai rubber exports to the EU. Furthermore, it will enhance the level of environmental standards in Thailand with a holistic approach to economic and environmental sustainability in the future.

Mr.Chaiyos Sincharoenkul

President

The Thai Rubber Association