9/25/2025
A POSSIBLE ANTIDOTE TO CBAM PROBLEMS COULD BE REGIONAL ETS SYSTEMS
The development of regional ETSs could help address concerns about the EU CBAM, which will enter its final phase in January 2026.
Critics of the system point to flaws such as the 'scrap loophole' and the lack of coverage of downstream products, which threaten to undermine European competitiveness.
Countries such as Turkey, the UK, Serbia and Taiwan are developing their own ETS or CBAM schemes, often seeking alignment with the EU ETS.
According to some experts, if carbon pricing were applied in all jurisdictions, CBAM would become superfluous and revenues would remain in producing countries. In the APAC region, South Korea, Japan, Taiwan, China and the Emirates are strengthening their carbon pricing systems. However, differences in cost calculation methods (e.g. facility-specific in the EU vs. national average in the US proposal) create complexity and risks of double counting.