Decarbonization of businesses for a more sustainable future: the ETS and the CBAM at the heart of an Euromed Clusters Forward webinar

As part of the Euromed Clusters Forward project, co-financed by the European Union and coordinated by ANIMA Investment Network, an informational webinar was organized on July 3rd in collaboration with the company D-Carbonize, specializes in supporting companies towards decarbonization through a digital platform for measuring, managing, and reducing carbon footprints. This webinar, the first session corresponding to the launch of the Regional Working Group on Mediterranean Value Chains, aimed to raise awareness among clusters and businesses in the Southern Mediterranean about European regulatory developments in climate change mitigation, particularly through two major tools: the Emission Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM). 

The EU ETS: a binding and incentive carbon market 

Established in 2005, the EU ETS (or European Union Emissions Trading System) is the cornerstone of the European Union’s climate policy. It operates on the principle of ‘cap and trade.’ Specifically, the Union sets an overall cap on CO₂ emissions for the affected sectors (heavy industry, energy, intra-European aviation), which is then allocated in the form of quotas. Companies must return one quota for each ton of CO₂ emitted. 

Some companies may receive quotas for free, but this number decreases each year. If a company emits less than its quotas, it can sell its surplus; if it exceeds its quotas, it must purchase allowances on the market or face financial penalties. This system thus creates a direct economic incentive to reduce emissions. 

The CBAM: a mechanism for commercial climate justice 

The CBAM aims to prevent carbon leakage, that is, the relocation of production to countries with looser environmental regulations. Currently in a transitional phase since October 2023, it will fully apply starting in 2026 to imports of high-emission products (cement, iron, steel, aluminum, fertilizers, electricity, hydrogen, etc.). 

Importers will be required to declare the direct CO₂ emissions related to the production of the goods they import and purchase CBAM certificates equivalent to the price of CO₂ in the European ETS. This mechanism aims to restore fairness between European producers, who are subject to the ETS, and foreign producers, who are not, while maintaining environmental pressure on globalized supply chains. 

Calculate emissions: differentiated methodologies 

The webinar emphasized the complexity of the calculation methods imposed by the EU, which vary according to the type of product:  

• For so-called basic goods (for example, a ton of rolled steel), the EU provides standard reference values, but encourages companies to supply more precise verified data to optimize their obligations.  

• For complex goods (assemblies, processed products), it is often necessary to reconstruct the supply chain and add direct and indirect emissions at each step. This process requires good traceability, digital tools, and sometimes the support of experts.  

Exporting companies will thus need to rigorously measure their carbon footprint, in collaboration with their suppliers, under penalty of being disadvantaged when entering the European market. 

Non-compliance: what risks for businesses?  

Non-compliance with the obligations of the CBAM leads to severe penalties. The importing company may be required to purchase additional certificates, with a penalty of 100 euros per undeclared ton, with no possibility of offsetting through surplus quotas. The webinar emphasized the importance of the current preparation phase (2023-2025), where companies can train, equip themselves, and begin to structure their carbon reporting, without yet being subject to payments. Starting in 2026, the obligation will become both declarative and financial. 

Preparing now 

 This webinar clarified the challenges and concrete implications of these regulations for Mediterranean exporters wishing to access or remain competitive in the European market. It also emphasized the importance for clusters to integrate these dimensions into their support offerings for SMEs: awareness-raising, training, calculation tools, and preparation for certification.  

Through D-Carbonize and other partners, the Euromed Clusters Forward project aims to continue supporting this ecological transition, essential for building a sustainable and competitive regional economy.  

For more information:  

The D-Carbonize website: d-carbonize.eu  

A conference from the Franco-Belgian Forum on industrial decarbonization, published on the AWEX YouTube channel: https://www.youtube.com/watch?v=HaIXCJzXO6Q