The European Commission has adopted a set of proposals, known as the European Green deal, with the aim of reducing net greenhouse gas emissions in the European Union (EU) by at least 55% by 2030, and achieving zero net emissions by 2050. In addition to the Corporate Sustainability Reporting Directive (CSRD), another pillar of this policy is the creation of the Carbon Border Adjustment Mechanism (CBAM), a new border tax aimed at equalizing the price of carbon paid for EU products operating under the EU Emissions Trading System (ETS) with that of similar imported goods.
CBAM is likely to impact the cost of carbon in global supply chains, and also has reporting obligations beginning as early as October of 2023, and the regulation has raised many questions. Which companies will it impact? What products are in scope? Will it impact companies that don’t do business in the EU?
This week, Heather Horn was joined by Barry Murphy and Niels Muller, PwC partners who are following CBAM, to share their insights on what it means and what companies can do now to prepare.
In this episode, you’ll hear discussion of:
- 2:26 - An overview of the EU Green Deal and CBAM
- 9:37 - How CBAM is intended to spur global alignment on carbon pricing
- 13:26 - Effective dates, applicable products, and other details of the regulation
- 25:58 - The current status of verification (audit) requirements and how these may evolve
- 29:39 - How CBAM could potentially impact the cost of carbon in global supply chains
- 33:59 - Recommendations for companies that want to begin preparing for CBAM ahead of the October 2023 effective date
Want to learn more about CBAM? Watch our webcast series.
Barry Murphy is PwC’s Global ESG leader for Tax and Legal Services. Based in the UK, he has 20 years of experience advising clients on their domestic and international tax affairs. He is also focused on driving compliance solutions with the digital first approach.
Niels Muller is a PwC partner based in the Netherlands specializing in energy transitions and sustainable energy. In this role he advises institutional investors, financial institutions, and utility companies as well as governments and non-governmental organizations on sustainability and tax projects.
Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.
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