CBAM: Sustainable Trade with the Carbon Border Adjustment Mechanism

Today, environmental awareness and concerns about climate change are more important than ever. As a result, various climate regulations and mechanisms to control carbon emissions are being developed worldwide. One of these mechanisms is the Border Carbon Adjustment Mechanism (BCAM), also referred to as SKDM in Turkish. But what exactly is SKDM, and why is it so important?

Definition and Importance of SKDM

SKDM is a mechanism developed by the European Union (EU) as a tool to combat climate change. Its primary goal is to regulate the carbon emissions of imported products and promote sustainable trade. As part of the EU’s commitment to reducing carbon emissions, SKDM aims to create a greener global trade environment by calculating and regulating the carbon footprint of imported goods.

SKDM’s Role in Combating Climate Change

Climate change poses a serious global threat, and reducing carbon emissions is critical to mitigating it. SKDM encourages the use of greener and more sustainable products by taking the carbon emissions of imported goods into account. Promoting products with lower carbon footprints helps reduce greenhouse gas emissions released into the atmosphere, thereby playing a key role in addressing climate change.

Preventing Carbon Leakage in the EU

The EU has long committed to reducing carbon emissions. However, strict regulations can sometimes lead businesses to relocate production outside the EU, causing carbon leakage. Carbon leakage can undermine the EU’s emission reduction targets and fail to contribute to global emission reductions. SKDM aims to prevent this leakage, ensuring alignment with the EU’s environmental objectives and creating a level playing field for businesses both inside and outside the EU.

Impact of SKDM on Businesses and Imports

SKDM primarily affects businesses in energy-intensive sectors that export products to the EU. These sectors include:

• Cement

• Iron & steel

• Aluminum

• Fertilizer

• Electricity

• Hydrogen production

SKDM requires businesses to calculate and regularly report the carbon emissions of imported products. While this adds regulatory and reporting obligations, in the long term it promotes environmental responsibility and sustainable business practices.

Why SKDM is Important

SKDM serves several critical goals:

• Combating climate change

• Promoting sustainable trade

• Preventing carbon leakage

Although it introduces additional regulatory and reporting requirements for businesses, SKDM also offers opportunities for environmental responsibility, sustainability, and competitive advantage. Its implementation is a significant step toward a greener and more sustainable global future.

The goal of SKDM is to encourage environmental sustainability while providing EU companies and others worldwide with the opportunity to consider environmental impacts. By taking this step toward a greener and more sustainable future, trade can align with climate objectives.

At Carbon Gate, we have developed a software platform with Turkish language support that can automate and accelerate all SKDM processes. Preparing SKDM declarations has never been easier with our platform.

With our new digital platform, you can quickly adapt to the process by pre-registering your company and preparing for sustainability today.

Pre-registration link: https://forms.gle/zEHqudA8UdrNeN499

For more detailed information, you can contact us at cbam@carbongate.io.