What is the Carbon Border Adjustment Mechanism?



In this article, we uncover what the Carbon Border Adjustment Mechanism is, how this could impact the telecommunications industry and how here at Shields, we are supporting the development of more sustainable working practices within the sector.



As the sustainability targets set out in the Paris Agreement (2015) draw nearer (2030) and pressures to find additional methods of tackling climate change mount, new legislation designed to reduce carbon emissions is being drafted across the sectors. The Carbon Border Adjustment Mechanism (CBAM) is one of the most recent developments within the EU and the UK is now in talks to implement a similar system.


What is a Carbon Border Adjustment Mechanism?

The Carbon Border Adjustment Mechanism is a carbon tariff that will be implemented in the EU from 2027. This new system will apply to certain raw material products and would see importers purchase carbon certificates in relation to the amount of emissions generated by the production of the goods. The goal of the CBAM is to reduce the risk of carbon leakage and encourage more sustainable production practices around the world.


What the CBAM may mean for the telecommunication industry:

While the proposed CBAM may not directly impact the telecommunication industry, the knock-on effect of this new tariff could result in increased costs. The EU version of the CBAM applies to specific raw-material products only, including cement, iron, steel and electricity. As such, if any telecom original equipment manufacturers (OEMs) or their suppliers import these materials, they may incur higher costs which could, in turn, be passed on to operators.


How Shields can help:

“The environment is at the heart of our business,” explains our CEO, Daniel Jones. “Enabling telecommunication network providers to reuse and recycle equipment is a crucial part of our strategy to support the industry in building a more sustainable future. It’s our goal to create a global circular economy within the sector and reusing and recycling equipment is essential to achieving this aim.

“The proposed CBAM may have financial implications for equipment purchased directly from the OEM which may lead to more network operators seeking alternative buying strategies. Our MarketPlace platform offers operators a real-time overview of their available inventory, enabling them to source items from existing stock. This effectively eliminates the need to purchase new equipment from overseas and mitigates the requirement for raw material mining, additional manufacturing and shipping. Not only is this model much more cost-effective and efficient in terms of the delivery of the required parts, but it stands to significantly reduce the carbon emissions associated with telecommunications.

“It’s crucial that every business and every country finds additional ways to progress the net-zero journey and we’re delighted to be able to offer a solution that supports this.”

Find out more about our MarketPlace solution here.