- GreenChem
- Legislation
With global efforts to combat climate change intensifying, the CBAM (Carbon Border Adjustment Mechanism), also known as the carbon border adjustment mechanism, came into force on October 1, 2023. This measure is one of the European Union’s most ambitious initiatives to promote the transition to a low-carbon economy. Its main objective is to combat carbon leakage, i.e., the shift of production to countries with less stringent environmental regulations, in order to ensure fair competition for European companies and contribute to climate neutrality by 2050, as set out in the European Green Deal.
What are the consequences of this mechanism for the transport sector? How can companies such as GreenChem prepare for and turn this change into a competitive advantage?
What is CBAM and why was it introduced?
CBAM is a central measure of the European “Fit for 55” package, which aims to reduce greenhouse gas emissions by 55% by 2030 compared to 1990 levels. In practice, the mechanism involves the introduction of a tariff on CO₂ emissions embedded in products imported from non-EU countries. The CBAM applies to carbon-intensive goods such as steel, cement, aluminum, fertilizers, electricity, and hydrogen, extending the principle of the European Emissions Trading System (EU ETS) to imports.
The objective of the CBAM is clear: to align the environmental costs incurred by European producers with those of their international competitors, reducing the risk of industries relocating to countries with less stringent regulations and promoting fairer and more sustainable global competition.
The phases of the CBAM for structural change
The implementation of the CBAM will take place in two phases:
- Transitional phase (October 2023 – December 2025)
No payments are required, but importing companies will have to collect and submit quarterly data to the competent authorities on the emissions embedded in the imported CBAM products, and Each EU Member State has own CBAM Competent Authority.
- Final phase (from January 2026)
According to the European Commission:
- EU importers of goods subject to CBAM will have to register with the competent authorities and purchase CBAM certificates, the price of which will be calculated based on the weekly average value of EU ETS allowances, expressed in EUR/ton of CO₂ emitted.
- Importers will declare annually the emissions embodied in imported products and return an equivalent number of certificates.
- If a carbon price has already been paid in the country of origin, the corresponding amount may be deducted.
Source: Carbon Border Adjustment Mechanism – European Commission
Impact of CBAM on the transport sector
The CBAM has direct and significant implications for the transport sector. In particular, for GreenChem, ammonia (anhydrous or in aqueous solution) and urea (also in aqueous solution) fall within the scope of the mechanism, as they are essential components for the production of AdBlue used in SCR systems for NOx reduction in diesel engines.
Due to the high energy intensity of the relevant production processes and the significant CO₂ emissions associated with them, these substances are among the products most at risk of carbon leakage. As a result, they are subject to the reporting and adjustment obligations under the CBAM, with tangible operational impacts on sourcing and supply chain management.
GreenChem: a structured and informed response
GreenChem addresses this challenge with a proactive and structured approach, combining sustainable practices and compliance with environmental regulations. With over 50 plants producing AdBlue in Europe and Brazil, the company has already embarked on an adjustment plan that includes:
- Mapping of non-EU suppliers;
- Requesting certifiable data on emissions during production;
- Internal reorganization for mandatory quarterly reporting;
- Assessment of independent environmental certifications.
The goal is twofold: to mitigate regulatory risk and consolidate the reliability of the entire supply chain.
CBAM as a competitive positioning lever
CBAM is not just a regulatory obligation, but a potential strategic lever for companies, such as GreenChem, that want to strengthen their ESG (environmental, social, and governance) reputation. Being transparent and responsive in emissions management not only enables compliance with regulations, but also helps build a solid corporate image in a market that is increasingly sensitive to sustainability.
According to the “2024 State of Supply Chain Sustainability Report” by the MIT Center for Transportation & Logistics and CSCMP, “Investor pressure to improve supply chain sustainability has increased by 25% over the past five years, becoming the fastest-growing driver of sustainability.” This highlights how regulatory compliance can go hand in hand with strengthening competitiveness, especially in sectors such as logistics and transportation, where transparency and compliance are now prerequisites for any international partnership.
Operational obstacles to overcome
Despite the advantages, there are significant operational challenges for businesses relating to implementations of CBAM, such as:
- Technical complexity in quantifying embedded emissions;
- The lack of reliable data from non-European suppliers;
- The costs associated with data collection, certification, and auditing;
- Regulatory uncertainty regarding the expansion of CBAM to other sectors, such as fine chemicals or polymers.
To overcome these obstacles, companies must adopt a flexible approach, invest in process digitalization, and strengthen collaboration with suppliers already aligned with ESG standards.
Prepare today to lead change tomorrow.
The CBAM represents a turning point in European environmental policy. Its impact will go far beyond the sectors immediately involved, changing the logic of global supply, production, and competitiveness.
For GreenChem, this is a challenge to be tackled with rigor, but also a real opportunity to reaffirm its commitment to more sustainable transport. In a context where resilience, transparency, and innovation are the new watchwords, how companies interpret this regulatory transformation will determine not only their competitiveness, but also their contribution to a more equitable and sustainable future.