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illuminem summarizes for you the essential news of the day. Read the full piece on the Financial Times or enjoy below
🗞️ Driving the news: The global business community is preparing for the repercussions of the world’s pioneering carbon border tax, the Carbon Border Adjustment Mechanism (CBAM)
• With the CBAM, the EU aims to neutralize the costs between its producers, who are under stringent emissions regulations, and international businesses importing into the bloc
🔭 The context: CBAM will necessitate extensive documentation and adherence to new procedures and contracts, impacting the costs for businesses importing into the EU
• The levy is expected to be in full operation by 2026, encompassing several industries including iron, steel, cement, aluminum, fertiliser, hydrogen, and electricity generation
🌍 Why it matters for the planet: This groundbreaking measure is pivotal for valuing pollution and curbing rising carbon emissions
• By equalizing the financial consequences of emissions for both European and non-European producers, it aims to incentivize global industries to propel international carbon pricing initiatives
⏭️ What’s next: With CBAM in its initial phase, companies and countries are closely monitoring its implementation and assessing its impact
• There’s anticipation about the international response, especially from major economies like China, India, and Turkey, who have already expressed their reservations
💬 One quote: “CBAM adds an ongoing burden on European businesses, creating additional expense for them, while non-EU exporters are going to have to invest significantly in their carbon reporting systems,” (Anuj Saush from The Conference Board)
📈 One stat: More than 80% of surveyed businesses by The Conference Board anticipate a price increase for customers due to the levy
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