![]() ![]() He said the policy would force companies to invest more to meet environmental, social and governance standards, which only big companies had the resources for. Malaysian International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz told The Jakarta Post on March 20 he deemed the policy unfair, arguing European countries could not expect Asean countries to follow their transition timeline. ![]() Initially, the policy only targets cement, electricity, fertilisers (such as nitric acid, ammonia and potassium), as well as iron, steel and aluminium products.Īmong Asean member states, Indonesia and Malaysia would be the two most heavily impacted by the import restrictions due to their considerable exports of iron, steel and aluminium to the EU, according to Singapore-based think tank ISEAS-Yusof Ishak Institute. ![]() Noncompliant goods shipped to the EU will be subject to a special tax. The EU argues it aimed to prevent “carbon leakage”, or domestic industries moving overseas to evade costly emission standards, and thereby ensure a level playing field to keep EU products competitive. The policy, known as the Carbon Border Adjustment Mechanism (CBAM), is set to take effect gradually, starting in 2026. Some deride the EU policy as a trade barrier, while others say it may force origin countries to move faster towards more sustainable production practices. JAKARTA: Asean countries, especially Malaysia and Indonesia, are bracing for measures aimed at keeping some of their export goods out of the European Union (EU) unless manufacturers can prove their products’ environmental credentials. ![]()
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