As the European Union (EU) gradually transitions to the Carbon Border Adjustment Mechanism (CBAM), which requires mandatory carbon emission reports on exports to the EU, Gyeonggi Province and the Gyeonggi FTA Trade Promotion Center will provide training and guidance to help local companies respond effectively.

Through to April 19, Gyeonggi Province is recruiting companies to participate in the “2024 Gyeonggi Carbon Border Tax Response Consultation,” and will hold related training and briefing sessions at the Gyeonggi Regional SMEs and Startups Agency on April 26 and 29.

The CBAM is a type of trade tariff imposed by the EU on imported products with high associated carbon emissions. It was piloted in October last year and, from this year, companies exporting to the EU will have to report carbon emissions by product on a quarterly basis. It applies to companies exporting steel, cement, electricity, fertilizer, aluminum, hydrogen and more to the EU.

Until 2025, there is only an emissions reporting obligation, but from 2026, emissions verification as well as the purchase and submission of CBAM certificates will be required. Accordingly, advance preparation is essential for exporting small and medium-sized enterprises (SMEs), and proactive responses are required not only from producers of the six major items currently monitored, but also from SMEs related to organic chemicals and plastic items that will become subject to monitoring.

The “2024 Gyeonggi Carbon Border Tax Response Consultation” prepared by Gyeonggi Province is divided into Type A (capacity building) and Type B (countermeasures for the six major CBAM industries) so as to support the type of CBAM application.

In addition, the “Visiting Pre-diagnosis Service for Carbon Neutrality Responses,” being implemented for the first time this year, will visit SMEs that have insufficient time and information to adapt to the CBAM. This service will determine response levels and provide information on related support projects as well as domestic and international trends free of charge throughout the year in order to improve CBAM awareness and response capabilities among SMEs in Gyeonggi Province.

Training sessions on SME ESG supply chain management, regulatory responses, and CBAM trends and responses for SMEs will be held on April 26 and 29. Training and briefing sessions on Carbon Border Tax responses will be held both online and offline by region throughout the year. For more information and to register, please visit the Gyeonggi FTA Center website at ggfta.or.kr.

Last year, Gyeonggi Province and the Gyeonggi FTA Center supported a total of 625 companies with training and briefings on “Carbon Border Tax and Environmental, Social, and Governance (ESG) Management,” providing advice on carbon emission calculations to help SMEs in Gyeonggi Province proactively respond to changes in global carbon regulations.

“There is an urgent need for SMEs in Gyeonggi Province to prepare practical responses to emerging international changes in the trading environment, such as carbon border tax and ESG… We will actively support them to become carbon-competitive by providing timely information and close consultation so as to gain an edge in the global carbon market,” said Lee Min-woo, Director of the Investment and Trade Division of Gyeonggi Province.

In addition to FTA consulting, the Gyeonggi FTA Center also provides FTA/trade education and briefings, online platform entry support, as well as CPNP and Halal certification, and export consultations on non-tariff barriers, and operates global supply chain (GVC) support projects. For more information on related initiatives, please contact the Gyeonggi FTA Center at 1688-4684.