Asian economies are ill prepared for upcoming carbon market regulation by the European Union that proposes a levy on imports of carbon-intensive goods and makes goods produced in countries with weaker carbon pricing mechanisms highly uncompetitive, industry sources and analysts told S&P Global Commodity Insights. Few countries in Asia have imposed any form of carbon tax and only China, South Korea and Australia have established nationwide emission trading schemes to price carbon. Most exporters in these countries also lack broader awareness about the impacts of the EU’s move, and are yet to establish uniform, stringent emission accounting and reporting practices. EU’s carbon border adjustment mechanism, or CBAM, could be implemented as early as 2023 when European companies have to start reporting emissions of imported goods, although they will not need to purchase CBAM certificates until 2026-2027. The Council of the European Union and the European Parliament are yet to decide on the timeline.

Source: Hellenic Shipping News