Carbon rules reshape Thai business as CBAM looms

European measure accelerates shifts in corporate strategy, regulation and long-term planning, writes Yuthana Praiwan

- NUTTHAWAT WICHIEANBUT

Steel wire rods produced by Tata Steel Thailand. Steel exports to the EU now face levies under the CBAM.

The European Union's Carbon Border Adjustment Mechanism (CBAM) is sending ripples of concern throughout global trade, unsettling exporters of certain products while raising broader questions about its long-term impact on industries not yet covered by the measure.

More than a tariff, CBAM represents a new kind of regulatory frontier - one that forces businesses to reckon with the environmental cost of their operations.

In Thailand, analysts and business leaders have been debating the implications since last year. Some warn the mechanism will reshape not only profit margins, but also the very way companies conduct business.

The conversation has shifted from short-term calculations of exports and revenues to deeper reflections on sustainability, competitiveness and survival in a carbon-conscious world.

This shift underscores a growing urgency: businesses must pay closer attention to the environmental dimensions of their products and services.

For the Thai government, the push towards a climate change law is not only about achieving its net-zero target, but also about aligning with international efforts to curb the increasingly severe natural disasters linked to global warming.

CBAM is forcing Thai businesses to adopt a new calculation that goes beyond profits and losses, requiring them to measure and disclose their carbon footprints, said Treethep Palakavong Na Ayudhya, chief executive of Global Carbon Corporation, a local greenhouse gas management consultancy.

The mechanism is a non-tariff barrier that applies to products with high carbon emissions during production. The initial list covers iron and steel, aluminium, cement, fertiliser, electricity and hydrogen.