summary:
Today, most countries are setting goals and taking actions to curb climate change. Among them, the European Union is the most active and progressive. It has declared in its green policy platform that greenhouse gas emissions will be reduced by 55% in 2030 compared with 1990 and by 80% in 2050 to achieve carbon emissions reductions. The determination to neutralize the mainland. In order to effectively curb the problem of border carbon leakage caused by increasingly stringent environmental regulations and maintain the international competitiveness of domestic industries, the European Union has decided to implement the "Carbon Border Adjustment Mechanism (CBAM)" in 2021, which will be gradually launched on a trial basis in 2023 and is expected to be implemented in 2021. It will be officially implemented in 2026. This article attempts to understand the possible impact on China's small and medium-sized enterprises based on the current trade situation. It is estimated that the impact of CBAM on China's trade from the transition period to the initial implementation period is still slight. However, the increase in environmental costs caused by green tariffs still poses a burden to business operations, and relevant measures must be taken. Countermeasures. In addition, it explores the impact of subsequent international reactions and the EU's possible tightening measures on future development directions, and provides possible ways and suggestions for small and medium-sized enterprises to improve their adaptability or seek guidance and assistance when facing rising business costs and policy changes.
1. CBAM implementation methods:
According to the latest revised specifications of the European Council on April 25, 2023, it was determined that six major items: steel, aluminum, chemicals, cement, fertilizers, and electricity will be included in the first wave of control list, and will be effective from October 2023 to the end of 2025. During the implementation transition period, the detailed rules and follow-up plans will be adjusted according to the implementation status. During the transition period, manufacturers only need to complete product carbon disclosure and submit reports without paying any fees. After formal implementation, product carbon inventory information must be submitted to a third-party verification agency recognized by the EU to be completed before May 31 of the following year. declare. The carbon content per unit product is the production process emissions/product quantity. The production process emissions are divided into simple and complex products. For simple products (should be raw materials), only direct emissions from energy use in the manufacturing process will be calculated, while for complex products (should be processed products), additional emissions will be calculated. The direct emissions from the above intermediate products, cement and fertilizers need to be added to the indirect emissions from electricity use. If the carbon content certificate cannot be provided, the emission intensity of the worst X% of similar facilities in the EU will be used to calculate, and separate details will be set for electricity input. The carbon price is calculated based on the EU ETS average price in the previous week. The carbon content of the unit product * import quantity * carbon transaction price is the fee that the manufacturer needs to pay. Purchase in full according to the voucher method (in tons), and in the exporting country The carbon fee paid can be discounted. In addition, in the initial stage, free quotas are provided at different proportions according to industry, and then are revised downwards year by year. It is expected to be completely zeroed in 2034. Volume-based pricing will be fully implemented. Any carbon footprint of the product will need to purchase a relative quota voucher, which will help enterprises accelerate the achievement of net-zero goals.
2. The impact of the impact on small and medium-sized enterprises in my country and the response measures:
1. Impact impact
Looking at my country's overall trade situation with the EU, it is initially estimated that the impact will not be large. The trade export volume to the EU in 2022 is approximately US$34.92 billion (accounting for approximately 7.3% of global exports), of which CBAM controlled products are approximately US$4.38 billion (accounting for 12.1% of EU exports). Among the six major controlled items, only steel (4.22 billion) US dollars) and the aluminum industry (US$156 million) have a large trade volume, and the output value of the remaining four items is very small. In addition, the coverage of CBAM control list items in the overall steel and aluminum industry exports exceeds 97%, covering almost all export items. It can be seen that the first Among the impact of the wave, the steel industry is the top priority. If the average export volume of steel industry controlled items to the EU in the past five years is 1.4 million tons* the carbon content per unit product is about 0.3~2.3t CO2e X 2022 EU ETS carbon trading average price Calculated at 85.2 euros, it can be estimated that after the formal implementation of CBAM, the steel industry will have to pay approximately NT$1.19 billion to NT$9.11 billion in annual fees, accounting for approximately 2.4~20% of the industry’s trade volume. It can be seen that although the overall proportion is not high, it is important to It is still a big burden for relevant enterprises.
Observing the possible direct export impact on China's small and medium-sized enterprises, among the detailed items of steel industry exports to the EU in 2022, the largest export is the direct export of steel raw materials (about 2.21 billion U.S. dollars). It is speculated that it should belong to the upstream raw material supply side, mainly large enterprises , followed by steel screws, bolts, nuts and other fastener processed products (about 1.68 billion U.S. dollars). This industry is most likely to be the main scope of influence of small and medium-sized enterprises. In 2022, the trade volume of metal manufacturing exports by small and medium-sized enterprises to the EU will be about 660 million U.S. dollars. , it is estimated that a considerable proportion will fall into this industry category. This industry is located in the middle and lower reaches and is processing and export-oriented. It is the third largest exporter in the world. The industry characteristics are mainly small and medium-sized enterprises. It is located in Luzhu, Taoyuan, Rende, Tainan, The Gangshan area in Kaohsiung has formed an industrial cluster, mostly adopting traditional business models, with few applications of digital technology and smart manufacturing, and low resilience to shocks. In recent years, it has received attention and been listed as a priority for coaching and upgrading. In addition, the role of small and medium-sized enterprises in the industrial chain of products indirectly exported to the EU also needs to be clarified. Since they will be affected by supply chain pressure, it remains to be seen whether companies have the ability to independently complete carbon inventories and achieve emission reduction targets.
2. Actions in response
Nowadays, most small and medium-sized enterprises understand the carbon impacts and hidden worries that may occur in the future. However, due to limited resources and manpower, and the regulations and systems have not yet clearly formulated emission reduction standards for small and medium-sized enterprises, the speed of carbon inventory and related proactive actions are generally lagging behind compared to larger enterprises. In view of this, our country has promoted relevant guidance measures. Taking the steel industry as an example, the small and medium-sized enterprise investment acceleration action plan has approved the investment in low-carbon production lines and the construction of green energy equipment by suppliers of coated metal stainless steel, Panyuan wire rods and other parts. and intelligent data management systems, etc. In addition, the Industry Bureau and the Metal Industry R&D Center have prepared a budget and established a carbon reduction service team to assist with carbon inventory, verification, technical equipment upgrade guidance, and talent training programs. The screw fastener industry, which is the first to bear the brunt, is also calling for and With the association's attention, the China Steel and Metals Center has assisted in meeting the administrative requirements required by CBAM. The government has also provided services such as carbon footprint guide manuals, carbon reduction calculation tools, and online consulting services. It is hoped that the international trade requirements will be combined with the needs of the general public. Enterprises, governments and industrial research institutions jointly provide guidance and promote small and medium-sized enterprises to accelerate net-zero path planning.
3. International Development
At present, the international community is generally opposed to the EU's move, believing it to be tariff protectionism in the name of environmental protection. In particular, countries with large exports of raw materials and export-oriented developing countries have reacted most strongly, and have adopted international legal channels and developed relevant regulations. There are checks and balances such as countermeasures. However, in order to take into account the regional policy goals of domestic industrial competitiveness and sustainable development, this measure is imperative for the EU. Relevant industries must respond early and plan carbon reduction paths to reduce the impact. Although my country is not the main target of the tax at this stage, important trading partners such as the United States and Japan are interested in following up on similar mechanisms, and the scale of the impact will be doubled by then. In addition, China's export items are mainly electronic parts and machinery manufacturing. According to the international situation, it is judged that they should not be subject to control in the short term. Once all metal processing items are included in the control in the future, it will have a huge impact on export trade, and advance planning is still required. Carbon reduction path prevents problems before they happen.
reference, summary
CBAM is currently in the pilot stage. The impact of the first wave of lists on the industry is still controllable, and there is still a large proportion of free quotas in the initial stage of implementation. However, small and medium-sized enterprises should take this opportunity to ride on the international carbon reduction trend and use the large-scale When enterprises are subject to carbon reduction and inventory inspection standards and the government provides guidance resources, they can simultaneously implement relevant measures to facilitate seeking references and consulting objects. By inventorying the entire chain of carbon footprints, the required resources and manpower can be effectively reduced, and relevant talents can be completed at the same time. Cultivation can more fully disclose analytical information and risks, enhance industry transparency and competitiveness, and avoid being at a loss when the industry is strictly regulated.
In the future, we should continue to pay attention to international trends to avoid possible environmental operational risks, such as the CCA system that the United States is about to follow, or the possibility that the European Union will continue to expand items, such as the intention to include EU ETS projects in the CBAM list, resulting in transportation and fuel costs. Increase or include more items in the calculation of electricity emissions. Because China’s energy emission coefficient is too high, this move will seriously weaken the competitiveness of export products. We need to rely on energy transformation and development to reduce harm. The plastic industry was originally included in the managed items. , we should clarify the relationship between the industrial supply chain and the carbon emission intensity of products as soon as possible and respond accordingly.
China also established a carbon rights exchange in April and is expected to levy a carbon fee in 2024. Since the carbon fee paid by CBAM in the original exporting country can be offset, this move can transfer trade costs to domestic green investment funds, but the EU carbon The trading system has been in place for many years and its operation is relatively mature and stable. The recent carbon trading price of 93 euros has reached the highest benchmark performance of 50 to 100 US dollars/ton of CO2 before 2030 recommended by the International High-Level Carbon Price Committee. Compared with neighboring areas such as mainland China, it is about 8 US dollars. / ton CO2, South Korea is about 28 US dollars / ton CO2. This price is bound to be too high. It is expected that domestic implementation will adopt a mild and gradual approach, and will be implemented with incentives such as offsets and subsidies. However, no matter how the carbon price is set, early carbon Inspecting and lowering product carbon standards is the most direct and effective way for domestic sales or exports.
Source:
1. The EU has not yet clearly standardized the list of product categories, and has only defined them in a generally accepted way.
2. The implementation details are yet to be formulated by the European Commission. According to the previous review version, the ratio is estimated to be 10%.
Sponsor: Ministry of Economic Affairs, Small, Medium and New Enterprises Agency, Ministry of Economic Affairs
Execution unit: Plastic Industry Technology Development Center
