PwC Indonesia and IDCTA hosted a seminar on the EU Carbon Border Adjustment Mechanism (CBAM): Implications for Indonesian Exporters and Supply Chains

Today, PwC Indonesia, in collaboration with the Indonesia Carbon Trade Association (IDCTA), held a seminar titled "The EU Carbon Border Adjustment Mechanism (CBAM): Implications to Indonesian Exporters and Their Supply Chains." The enactment of CBAM aims to reduce greenhouse gas emissions by placing a price on certain emissions associated with selected imports. This mechanism complements the existing EU Emissions Trading System and seeks to prevent carbon leakage, ensuring a level playing field for EU and non-EU producers.

The EU Carbon Border Adjustment Mechanism (CBAM) is a regulatory initiative designed to prevent carbon leakage and encourage global climate action by imposing a carbon price on imports of certain goods into the European Union. Starting in 2023, the CBAM targets carbon-intensive industries requiring importers to purchase carbon certificates that reflect the carbon emissions embedded in their products. This mechanism aims to level the playing field for EU producers who are subject to stringent carbon regulations and promote the adoption of cleaner technologies worldwide. By aligning carbon costs between domestic and imported goods, the CBAM seeks to drive global reductions in greenhouse gas emissions and support the EU's broader climate goals.

Yuliana Sudjonno, PwC Indonesia Partner & Sustainability Leader, said, "The introduction of the CBAM poses significant challenges for Indonesian exporters, demanding greater transparency and sustainability within their supply chains. This policy essentially imposes carbon tariffs on imports to the EU and potentially incurs additional costs to maintain their access to the European market. Eventually, CBAM compels Indonesian businesses to adopt greener practices by reducing carbon footprints.”

The seminar serves as a platform for dialogue and knowledge-sharing among stakeholders affected by CBAM regulations, contributing to informed decision-making and sustainable business practices. The objectives of the seminar include educating attendees on the fundamentals of CBAM and preparation for compliance, exploring impacts on Indonesian exporters and supply chains, identifying challenges and opportunities in meeting CBAM requirements, and facilitating stakeholder discussions on potential offset and contribution of the voluntary carbon market against CBAM.

To close, Yuliana added, “We will continue to assess the CBAM impacts and guide businesses to achieve a greener supply chain."