The 29th UN Climate Conference (COP29) in Baku, Azerbaijan, marked a critical step toward launching a global carbon market under the United Nations Framework Convention on Climate Change (UNFCCC). Delegates approved foundational rules to facilitate carbon credit trading, a system long delayed but expected to become operational within the next year. However, tensions arose when the BASIC nations—Brazil, South Africa, India, and China—insisted on addressing the European Union’s Carbon Border Adjustment Mechanism (CBAM) as part of the official agenda. BASIC countries criticized CBAM regulations, which impose tariffs on imports based on carbon intensity, as unilateral trade restrictions incompatible with multilateral agreements like the Paris Accord.

Although the COP29 presidency opted to limit CBAM discussions to informal sessions, the issue remains contentious. Developing nations, including India and South Africa, argue that CBAM and similar policies disproportionately harm emerging economies, penalizing them for lacking carbon pricing frameworks. These measures, they claim, contradict the principles of climate equity embedded in the UNFCCC. Meanwhile, wealthier nations contend that CBAM incentivizes global decarbonization and ensures fair competition by aligning trade with environmental standards.

CBAM Reports offers comprehensive services, including insights on CBAM regulations and guidance for compliance, such as navigating the CBAM XML template for reporting emissions. Contact us and we will help your business adapt to evolving trade policies and turn regulatory challenges into opportunities.

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