EU carbon rules to hit Korean exports from 2031
The EU’s Carbon Border Adjustment Mechanism (CBAM) is expected to significantly impact South Korea’s export-oriented industries, particularly steel and manufacturing, by imposing carbon costs on embedded emissions. At the same time, the EU is gradually phasing out free allowances under the EU ETS, increasing compliance costs for both domestic and foreign producers. This dual policy approach is prompting calls for closer alignment between Korea’s carbon pricing system and EU standards. The development highlights how CBAM is extending EU carbon pricing beyond its borders, reshaping trade dynamics and accelerating global carbon market integration.
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