EU: Indirect exporters to Europe urged to comply with EU carbon rules

EVEN COMPANIES that do not export to Europe will need to comply with the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), the Philippine Exporters Confederation, Inc. (Philexport) said.

In a statement on Friday, Philexport, citing an official of SGV & Co., said that Philippine direct and indirect suppliers to the EU also need to familiarize themselves with the rules.

Lucil Vicerra, indirect tax services leader and global trade and customs partner at SGV, said that CBAM must be viewed as a mechanism that will steer Philippine businesses towards “remaining competitive in the global market.”

EU: Indirect exporters to Europe urged to comply with EU carbon rules

“Acting now, while recognizing that it is a longer-term endeavor, will lead to a competitive advantage over regional peers,” Ms. Vicerra said.

“By meeting CBAM requirements, businesses can demonstrate environmental responsibility, maintain current EU business, capture additional market share, and establish themselves as industry leaders,” she added.

She said that even exporters not directly exporting to the EU could still be affected if their customers that buy their materials and products export to Europe.

“CBAM does not only cover direct exports from the Philippines to the EU; it also covers indirect imports,” Ms. Vicerra stated.

She said that if an exporter from another country exports a product for which some materials were made in the Philippines, the direct exporter will need to ask the Philippine exporter for the carbon emissions data.

“The responsibility is there for Philippine companies that are indirectly exporting to the EU (to) understand what is being required of us,” she added.

She said that although the indirect exporters from the Philippines will not be affected by the policy in terms of cost, the exporters may lose out to other CBAM-compliant manufacturers if they are not able to comply with the direct exporters’ requirements.

“This could happen if the non-EU manufacturer is unable to comply with the requirement to calculate and provide the carbon emissions data, and the non-EU distributor is unable to provide its customers with the emissions data from the supplier and manufacturer,” she said.

EU: Indirect exporters to Europe urged to comply with EU carbon rules

“Filipino companies are thus advised to see compliance with CBAM regulation as a ‘transformative journey’ that has to be taken,” she added.

CBAM is a tariff on carbon-intensive products, such as steel and cement, that are imported into the EU. It entered into force on a transitional basis on Oct. 1. — Justine Irish D. Tabile

27 February 2024

HEDGE FUNDS: Hedge Funds Are Dumping Tech at the Fastest Pace in Months

Nvidia’s blockbuster earnings report last week has been followed by big outflows from the tech sector among hedge funds as they look to take some chips off the table after piling in ahead of the

Read More
7 June 2024

ASIA: China Plans New Way to Measure Products’ Carbon Footprint

China has announced plans for a new method to measure the ‘carbon content’ of its products – an issue that has caused tension with some of its trading partners. This move, seen as a key step in

Read More
4 October 2024

TAX EVASION: After a Deloitte client’s $2.4B tax dodge faltered, the accounting giant won’t say if it helped others exploit the same loophole

ICIJ reviewed hundreds of pages of court records to examine the Big Four firm’s role in a controversial tax maneuver, which one expert labeled “easily replicable.” Late last year, the Internal

Read More
1 March 2024

US: IRS Investigating People Earning Above Certain Threshold

he Internal Revenue Service (IRS) has announced it will crack down on ultra-rich earners who have not filed tax returns in recent years. Starting this week, the government agency will attempt to claw

Read More