Carbon Regulatory Mechanism at the Border (SKDM) is an important tool developed by the European Union (EU) to combat climate change. This mechanism allows imported products to Carbon It aims to promote sustainable trade by regulating its emissions. SKDM will be implemented as a transition period from 2023 to 2025, and will be fully operational from 2026. SKDM is based on the Green Covenant, which the EU declared in 2019. This agreement aims to develop a range of policies and practices aimed at achieving the EU's goal of net zero greenhouse gas emissions by 2050. SKDM has been designated as a critical tool for achieving these goals.

Definition and Purposes of SKDM

SKDM, Europe The Green CovenantIt appeared as part of I. Its main goal is to reduce carbon emissions within the EU and to ensure that foreign trade is regulated in this framework in order to achieve this goal. Importer companies, their products Carbon FootprintBy internalizing ni, environmental Sustainability They will contribute to their goals. This mechanism will be applied in areas such as cement, iron-steel, fertilizer and electricity, particularly targeting sectors with high carbon emissions.

Possible Results

Implementation of SKDM can have a variety of consequences, both environmentally and economically.

Environmental Effects: Thanks to the mechanism, lower carbon emissions are aimed at the production processes of imported products. This may contribute to reducing carbon emissions on a global scale.

Economic Impacts: However, the implementation of SKDM can create challenges, especially for developing countries. It may be that importing firms face additional costs and their competitiveness is reduced. Therefore, in some countries the risk (carbon leakage) of the production processes may arise to shift abroad.

Trade Dynamics: SKDM can also affect international trade relations. Countries outside the EU may be encouraged to adopt stricter environmental regulations, while at the same time increasing production costs in these countries.

Major Sectors Under the Scope of SKDM

Iron-steel Sector: The iron-steel sector stands out as the sector that will be most affected by SKDM. This sector is known for its high carbon emissions and consumes large amounts of energy in production processes. With the implementation of SKDM, firms in this sector will face the obligation to report carbon emissions and meet certain financial obligations.

Cement Sector: The cement sector is another critical area covered by SKDM. Cement production causes a significant amount of CO2 release, as it involves processes that require high temperature. Therefore, cement manufacturers will also face additional costs as a result of SKDM applications.

Aluminum Sector: Aluminum production is an intensive process of energy use and is associated with high emissions. Therefore, the aluminum sector is another sector that is expected to be affected by SKDM. Manufacturers will have to monitor and report on carbon emissions.

Fertilizer Sector: Fertilizer production can cause the release of greenhouse gases, especially nitrous oxide. Therefore, the fertilizer sector is also covered by SKDM and is affected by these regulations.

Electricity Sector: Electricity generation creates high carbon emissions, especially when fossil fuels are used. With SKDM applications, electricity producers will also be under the obligation to report their emissions.

Hydrogen Sector: Hydrogen production is important for environmental sustainability, especially with "blue" and "green" hydrogen methods. However, carbon emissions will also need to be monitored in this area.

Carbon Footprint Calculation Process

Analysis of the Production Process: The first step is to analyze the production processes of imported products in detail. At this stage, the types of energy used and the carbon emission factors of this energy are taken into account. The energy sources used in the production process (fossil fuels, renewable energy, etc.) and the amount of greenhouse gas released by each of them must be determined.

Determination of Energy Consumption: The total amount of energy consumed during the production of products must be determined. This is a critical step to calculate energy consumption per product. Importers are obliged to correctly declare this data.

Calculation of Carbon Emissions: Once energy consumption is determined, the total amount of emissions of each energy source is calculated using carbon emission factors. For example, with emission factors determined by the type of fossil fuels used, energy consumption is multiplied to achieve total carbon emissions.

Calculation of Product Embedded Emissions: Embedded emissions must be calculated for each product. This includes determining the total greenhouse gas emissions that occur during the production process of the product. Based on the methodologies specified in the SKDM Charter, different methods of calculation can be applied based on whether the products are "simple" or "complex".

Receiving Carbon Certificates: Through calculated embedded emissions, importers must obtain a certain number of SKDM certificates for each ton of CO2 equivalent. These certificates are used to determine the carbon fee that the importer must pay. By the end of May each year, a SKDM notification must be made on the import and emission values that took place during the previous year.

Data Verification and Controls: The accuracy of the data the importers declare is audited by the EU. If the importer cannot provide accurate and complete data, calculations are made using the standard emission factors set by the EU and a carbon fee is collected accordingly.

Countries and Organizations Playing a Role in the Development Process

Countries of the European Union: SKDM is shaped within the framework of the EU's climate policies. EU member states have been actively involved in the design and implementation of this mechanism. In particular, the European Parliament and the Council of Europe have contributed to the progress of the process by adopting the SKDM Charter on 10 May 2023.

European Commission: The European Commission is the main organization responsible for determining the technical and application details of SKDM. The Commission makes the necessary legal arrangements to ensure uniform implementation of SKDM across the EU. It has also assumed the task of creating data collection and reporting systems during the transition period.

Third Countries: SKDM also includes imports from countries outside the EU. In this context, regulations for the importation of products at risk of carbon leakage will be implemented, especially in sectors with high emission density (cement, iron-steel, aluminum, etc.). However, the countries participating in the EU ETS are exempt from this mechanism.

International Organizations: During the development of SKDM, the World Trade Organization (WTOThe goal of ensuring compatibility with ) also plays an important role. This increases the validity of the mechanism under international trade rules.

Conclusion

The Carbon Regulatory Mechanism at the Border stands out as an important step in the fight against climate change. Importers are expected to promote sustainable trade by taking into account their carbon footprint. However, the economic challenges and competitiveness issues brought about by the practice must also be considered. In the coming years, the effects of SKDM will become more pronounced and shape global trade dynamics.

Bircan HASGÜL