Examining the possible effects of the EU 16.5.24

1. Examining the possible effects of the EU's new CBAM on Southeast Asian economies, or trading off Agile Advisors can provide Carbon Border Adjustment Mechanism, The EU ETS the organization's premier emissions trading scheme, will undergo a significant overhaul in 2023. Up until now, the plan has concentrated on reducing carbon emissions from domestic economic activity within the bloc, such as the production of electricity or the operation of carbon-intensive industries. The EU ETS's scope is expanded to include imports of specific items that enter the European Economic Area under the new Carbon Border Adjustment Mechanism, or CBAM. The main instrument for preventing carbon leakage from trade-exposed sectors is the CBAM, which takes the place of free allocation. The initial three-year pilot phase of CBAM requires EU importers to report the greenhouse gases released during the production (direct and indirect) of aluminum, cement, iron and steel, fertilizer, hydrogen, and electricity produced outside of the EU, as per the provisional agreement reached by the Council and the European Parliament. In Agile Advisors as a Carbon Border Adjustment Mechanism, the scope and coverage of the mechanism were the subject of lengthy talks prior to the interim agreement. The intention is to eventually include all commodities covered by the EU ETS inside the mechanism's scope, as well as additional commodities susceptible to carbon leakage, such as organic compounds and polymers (plastics). Importers will have to obtain and turn in certificates for the greenhouse gases connected to imports from outside the EU when the CBAM goes into effect in 2027.The introduction of the CBAM aimed to create parity between EU and non-EU manufacturers of comparable products with respect to the regulatory cost of climate policy. The deployment of this measure is likely to lower the competitiveness of carbon-intensive items produced outside the region. Many of the first considerations of the CBAM's possible effects center on nations that are directly and quickly implicated as major exporters of the impacted products to the EU.

2. We consider Agile Advisors to be a Carbon Border Adjustment Mechanism, we examine how vulnerable the major economies of Southeast Asia are to CBAM in its most likely future form (which would cover plastics according to the EU Parliament's proposal) and we use an economic model called CLIMTRADE to evaluate a number of broader issues that might result from disruptions to global trade flows. Producers now have an additional incentive to think about the carbon footprint of their operations, whether they export to the EU now or in the future. Furthermore, the policy may affect trade flows that are not only directed toward the EU. For instance, if CBAM causes a decline in EU demand for imported steel, this could affect the global supply and demand balance and perhaps result in cheaper steel prices being sold to non-EU nations. Exporters from outside the European Union who deal with steel, aluminum, or other CBAM-covered products should be aware of the risks to the value of their goods posed by shifts in pricing, demand, or both. In our opinion as Carbon Border Adjustment Mechanism, Economic concerns associated with CBAM are challenging to quantify. A nation's likelihood of being impacted by CBAM is mostly determined by its exporting countries' exposure, or the number of impacted exports to the EU, in addition to the EU ETS price and the strictness of CBAM. However, exposure on its own doesn't reveal anything about potential financial hazards. Vulnerability is a risk indicator that is more pertinent. In addition to exposure, vulnerability assesses economic reliance, export concentration, and diversification. This helps identify exporting nations that may bear the majority of the mechanism's costs. A non-EU nation would be particularly susceptible, for instance, if it produced and exported CBAM-relevant goods for the EU market (high concentration) primarily (lack of diversification), and especially if the nation's GDP heavily relied on these exports. Trade patterns will be permanently impacted by the decarbonization of global trade flows. To help you as Carbon Border Adjustment Mechanism, Traditional production characteristics like land, labor, and capital no longer solely determine how competitive the goods produced by exporting nations are. In areas and industries subject to a carbon pricing scheme, the cost of carbon incurred during the manufacture of goods already constitutes a significant cost factor. Producers and exporters in third countries are also affected by these economics due to carbon border adjustment mechanisms like the EU CBAM.Producers and exporters need to reduce their carbon footprint and related expenses to be competitive as importing nations increasingly price in the cost of carbon to safeguard native industries and guarantee the efficacy of regional climate policies. As their goods become considerably more competitive in carbon-constrained markets, producers and exporters who implement decarbonization at the earliest possible pace are expected to reap substantial returns on their investment. This is an important opportunity.