Thai Exporters Face Challenges from EU's Carbon Border Adjustment Mechanism Implementation
Thai exporters are under pressure to transition to low-carbon production due to the EU's Carbon Border Adjustment Mechanism (CBAM) effective January 1, 2026. The measure aims to prevent carbon leakage and has already impacted Thai shipments to the EU, particularly in carbon-intensive sectors. A study by the Puey Ungphakorn Institute for Economic Research highlights a 14% decline in export value of CBAM-covered goods post-announcement in 2020, and a further 24% drop post-implementation in 2023. Small exporters face greater challenges than larger firms, necessitating adaptation strategies.
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The EU's Carbon Border Adjustment Mechanism (CBAM), effective January 1, 2026, pressures Thai exporters to adopt low-carbon production practices. The measure aims to prevent carbon leakage and has impacted Thai shipments, particularly in sectors like cement and steel.
A PIER study shows a 14% decline in export value of CBAM-covered goods since the 2020 announcement and an additional 24% decline following the 2023 rollout. Small firms are disproportionately affected due to limited resources for compliance.
EU importers are expected to favor low-carbon products, increasing the urgency for Thai exporters to adjust. Additionally, banks like Bangkok Bank are beginning to support exporters with loans aimed at reducing emissions and adapting to new regulations.
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