Firms prepare for next phase of CBAM
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Firms prepare for next phase of CBAM

Local businesses, especially small and medium-sized enterprises (SMEs), need help to improve their manufacturing environmental standards as new phases of the European Union's Carbon Border Adjustment Mechanism (CBAM) are slated to cover exports to the bloc, says the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).

CBAM is a non-tariff barrier meant to encourage entrepreneurs to use more renewable power in their manufacturing to reduce their carbon footprint.

The transitional phase of CBAM, which started last October, requires importers of iron and steel, aluminium, cement, fertiliser, electricity and hydrogen to report greenhouse gas emissions embedded in their imports without being subject to financial payments or adjustments.

Importers are scheduled to pay a levy for CBAM certificates from Jan 1, 2026.

The JSCCIB is working with the International Chamber of Commerce-Thailand to ease the impact of CBAM on Thai products, said Montri Mahaplerkpong, vice-chairman of the Federation of Thai Industries.

The second phase of CBAM, starting from 2026, is expected to affect many products, including nuts, screws, bolts and nails, while in the third phase all products exported to the EU will be subject to CBAM, he said.

"We are preparing measures to help Thai manufactures better deal with CBAM when their products are exported to the EU," said Mr Montri.

"We need to set new environmental standards and educate SMEs on international laws."

The process to set the standards, which include carbon dioxide emission issues, and launch other CBAM-related measures should take three years as a series of discussions is needed among businesses and state agencies, he said.

Mr Montri expects the standards to be applied to all types of businesses, especially those operated by SMEs.

Many SMEs need financial help to improve their products as well as know-how on international trade, he said.

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