[CDx Launch Session Summary] Fishbowl 14: Compliance Requirements

The session on “Compliance Requirements” explored the challenges and strategies for corporate decarbonization amidst emerging compliance pressures, particularly with the EU’s Carbon Border Adjustment Mechanism (CBAM). Roble Velasco-Rosenheim of the I-REC Standard Foundation explained that CBAM aims to level the environmental compliance costs between domestic and foreign producers, especially for industries like steel and aluminum, by taxing imports based on their carbon emissions. This initiative, while intended to prevent carbon leakage, has sparked debates around fairness and economic protectionism.

James Moore of RE100 Thailand stressed the need for businesses to proactively understand their carbon footprint and prepare for future compliance. He emphasized the importance of the 3D framework—Data, Decarbonize, and Disclose—as a pathway for companies to build readiness for both voluntary and compliance markets. The panelists agreed that while compliance is often seen as a burden, it should be viewed as an opportunity for leadership in sustainability, particularly in Southeast Asia, where the regulatory landscape is still evolving. Regional collaboration, led by organizations like ASEAN, is crucial to aligning efforts and negotiating with larger economic blocks.

The discussion also underscored the necessity of clear communication and stakeholder engagement in navigating complex regulatory landscapes.

Key Takeaways

• Carbon Footprint Understanding: Companies must assess their carbon footprint early and build readiness for compliance with mechanisms like CBAM to avoid falling behind in global competition.

• Viewing Compliance as Opportunity: Compliance can be a differentiator for businesses, offering a chance to innovate, build resilience, and position companies as sustainability leaders in the market.

• 3D Framework: The Data, Decarbonize, and Disclose approach ensures companies are prepared for both voluntary and compliance market demands, starting with accurate baseline data and moving to transparent reporting.

• Regional Collaboration: ASEAN's collective voice is essential for effectively addressing CBAM challenges and creating aligned policies to negotiate better terms for Southeast Asia.

• Proactive Stakeholder Engagement: Building partnerships with supply chain partners and engaging in policy dialogues helps businesses stay ahead of compliance regulations and drive decarbonization forward.

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