How carbon pricing can help ramp up EU-Asean climate cooperation
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SOUTH-EAST Asian countries are important EU trading partners and are exposed to the European Union’s new Carbon Border Adjustment Mechanism (CBAM) to some extent – particularly Vietnam’s, Malaysia’s and Thailand’s iron and steel sectors. That is why the EU understands the region’s strong interest in the mechanism. We want to ensure the fullest transparency in its design, and feedback from industry on the ground will be critical to this.
The introduction of CBAM will add to carbon pricing’s growing reputation as a climate change mitigation tool that gets results. The mechanism complements the EU’s pioneering Emissions Trading System (ETS), in place since 2005, which has helped reduce emissions from power and industry plants by 37 per cent. The EU is also now extending the ETS to other activities such as aviation, maritime transport, road transport and building heating.
We know that Thailand, Malaysia, Indonesia and Vietnam are considering carbon pricing systems of their own, while Singapore has already introduced a carbon tax for certain industrial sectors. The EU welcomes and encourages these initiatives.
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