• The European Union (EU) is set to expand the Carbon Border Adjustment Mechanism (CBAM) from upstream products to downstream goods with high iron and aluminum content by early 2028, including industrial equipment, automotive vehicles and parts, home appliances, furniture and construction products, and metal packaging. The draft legislation remains in its first reading.
• The risk to Thailand’s overall exports remains limited, but it has increased compared with the previous scope and may be concentrated in certain product categories. Collectively, CBAM-related goods accounted for 0.98 percent of Thailand’s total export value in 2024, with most Thai exports to the EU under the draft scope expansion falling into the industrial equipment and automotive segments.
• Potentially affected businesses should begin screening risks across three dimensions: whether their products fall within the scope of the expanded CBAM, their degree of reliance on the EU market, and whether they operate within the supply chains of EU-exporting clients. They should also prepare data on raw materials, energy consumption, and product-level carbon emissions, while closely monitoring developments in Thailand’s climate-related legislation and future carbon pricing mechanisms.
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