KUALA LUMPUR: The Malaysian Investment Development Authority (MIDA) and Alliance Bank Malaysia Bhd have recently hosted a Carbon Border Adjustment Mechanism (CBAM) workshop to help exporters navigate the European Union's (EU) carbon border policy.
In a joint statement today, they said the groundbreaking event brings together industry leaders, and an environmental expert from Riverstone Environmental Sdn Bhd to
explore the potential of CBAM in revolutionising sustainable industrial practices.
The workshop was divided into three parts, focusing on CBAM's impact on businesses,
implementation timelines, compliance processes and strategies to navigate them.
CBAM is a carbon border tax designed to address the growing concern of carbon leakage by putting a fair price on the carbon emitted during the production of carbon-intensive goods entering EU countries.
This innovative mechanism encourages cleaner industrial production in non-EU countries, paving the way for a more sustainable future.
Investment, Trade and Industry Ministry (MITI) deputy secretary general (Investment and Management) Datuk Bahria Mohd Tamil said the ministry actively engaging with international partners to promote a low-carbon economy.
She stated that they are working together to ensure Malaysia's interests are represented in global climate negotiations and to facilitate trade for exporters affected by CBAM.
"While it's a new regulatory challenge, CBAM also incentivises sustainable practices and can enhance the long-term competitiveness of our businesses.
"With strategic planning and government support, we can navigate this transition successfully and drive innovation, improve our environmental credentials, and secure a leading position in the global market," she added.
Meanwhile, MIDA chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said it is crucial for everyone involved in the supply chain of European importers to
understand the CBAM requirements thoroughly and start taking steps to meet these new regulations.
"Being ahead of the curve is vital to maintaining our competitiveness in the global marketplace.
"The shift towards greener practices is not just a regulatory hurdle, but a chance to innovate, to enhance efficiency, and to position Malaysian businesses at the forefront of sustainable trade," he said.
According to the statement, about 75 per cent of Malaysia's exports to the EU will be impacted by CBAM, albeit collectively accounting for about 8.0 per cent of Malaysia's total exports from 2021 to 2023.
The new regulatory requirement will impose significant compliance costs and further drive the importance of sustainability in the global supply chain.
Malaysian exporters, particularly those that are heavily reliant on exports to the EU and those that produce carbon intensive products from six groups being cement, iron & steel, aluminum, fertilizers, electricity and hydrogen will be impacted in the initial phase.