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Border Adjustments Driving Low-Carbon Investments
Border carbon adjustments (BCAs) are policies that charge imported products for the pollution it took to manufacture that product. They are sometimes referred to as carbon import fees or carbon border adjustment mechanisms, among other names. BCAs are being explored or developed in countries that make up nearly 60% of the global economy—and companies are already making low-carbon investments in anticipation of their implementation.
*Counter shows the total amount of greenhouse gas emissions associated with imports to countries that are implementing or exploring BCAs, which currently includes the EU, U.S., UK, Taiwan, Canada, Australia, South Korea, Japan, and India.
ACTION AROUND THE GLOBE
The EU is furthest along in implementing its BCA, known as the Carbon Border Adjustment Mechanism (CBAM), with import charges expected to go into effect in 2026. The U.S. is also drawing global attention for its early bipartisan exploration of a BCA due to the size and dynamism of the U.S. market. The power of these market-driven policies is on display as the anticipation of import fees has already motivated low-carbon investments globally. The following is a list of companies (and their associated annual carbon emissions) that have made public announcements about low-carbon investments and operational changes in anticipation of BCA policies:
70 million MT CO2
Korea’s largest steel producer, POSCO, has invested in low-carbon materials, CCUS, electric smelting furnaces, and hydrogen reduction ironmaking. Specifically, they invested in an Electric Arc Furnace in February 2022 to help prepare for CBAM implementation.1 EAFs typically produce steel with 75% fewer CO2 emissions than traditional blast furnace facilities.2 POSCO reduced its annual emissions by 11% between 2017 and 2022.3
27 million MT CO2
Indian aluminum manufacturer Hindalco initiated an internal carbon price (ICP) in preparation for the CBAM, to “help us in putting a cost for CO2e emissions internally and aid in managing climate-related risks.”4 This ICP is also meant to enable more carbon-efficient projects to get approved through the investment decision process. Hindalco used its ICP tool to calculate the return on investment and streamline approval for a new solar and battery storage project.5
0.5 million MT CO2e
In December 2024, the Egyptian government oversaw the signing of several strategic agreements aimed at enhancing Abu Qir’s sustainability to help the company comply with the CBAM. These agreements included a deal with a green hydrogen supplier to replace natural gas as a feedstock for fertilizer production and a contract to install an automated control system to improve energy efficiency.7
6.1 million MT CO2e
Motivated in part by the CBAM, in 2024, Çimsa Çimento secured a $70 million green loan from the International Finance Corporation to improve the company’s energy efficiency through waste heat recovery systems and install solar PV at facilities, which is expected to reduce the firm’s emissions by 10%.
29 million MT CO2
Hyundai Steel, Korea’s second-largest producer, signed memorandums of understanding to supply low-carbon steel to three downstream European steel users. A Hyundai official explained that “With the [CBAM] coming into full effect in 2026, we anticipate a significant increase in demand for carbon-reduced steel plates, especially from European automakers.”9
32 million MT CO2
In 2023, the Taiwan Cement Corporation committed to spend nearly $1 billion to boost its holdings in a low carbon Turkish cement manufacturer because they believe that under the CBAM regime, low-carbon cement will become a major competitive strength in entering the European market.11
6.2 million MT CO2e
In August 2024, Woodside Energy acquired OCI Global’s Clean Ammonia Project in Beaumont, Texas. Woodside justified this investment, explaining that the EU CBAM “will create a pricing advantage for low carbon ammonia relative to conventional unabated ammonia. The OCI Clean Ammonia Project with its lower carbon intensity will have the potential to attract premium pricing when compared to conventional ammonia producers”13 and that the CBAM “is going to be the driving force that pushes consumers of ammonia or hydrogen to adopt lower carbon molecules from 2026 onwards as a way to remain compliant and reduce costs.”14
50 million MT CO2e
In 2024, JSW identified that “failure to comply with emerging climate-related policies and regulations, particularly carbon pricing and EU CBAM, are the most significant risks for JSW Steel.”16 JSW’s new subsidiary, JSW Green Steel, has just announced that they are moving forward with a low-carbon green steel plant that will produce steel with one-fifth the emissions of average Indian steel production, with production specifically intended for the EU market.17
1 “Climate Risk Management,” POSCO Sustainability, https://sustainability.posco.com/S91/S91F10/eng/UI-PK_W008.do.
2 “Steel is the New Green,” Steel Manufacturers Association, https://steelnet.org/sustainability/#:~:text=Significantly%20more%20energy%20efficient%20than,process %20isn’t%20anything%20new.
3 “POSCO Sustainability Report 2022,” POSCO, page 42. .
4 “Task Force on Climate-related Financial Disclosures Report 2021-2022,” Hindalco, https://www.hindalco.com/upload/pdf/tcfd-summary-report-fy-2021-22-report.pdf.
5 “Natural Capital,” Hindalco, pg. 103 https://www.hindalco.com/integrated-annual-report/pdf/natural-capital.pdf.
6 “Building on Our Success: Sustainability Report,” Abu Qir Fertilizers Company (AFC), 2019 / 2020, pg 117 https://abuqir.net/uploads/sustainability/AbuQir_Sustainability_2020.pdf.
7 Sarah Samir, “AFC Signs 3 Agreements to Reduce Carbon Emissions,” Egypt Oil and Gas Group, December 15, 2024, https://egyptoil-gas.com/news/afc-signs-3-agreements-to-reduce-carbon-emissions/.
8 “Integrated Annual Report: Summary Report 2023,” Cimsa, page 10 https://cimsa.com.tr/en/wp- content/uploads/sites/3/2024/07/Cimsa-EFR-2023-ENG-Ozet-Rapor-V.1.pdf.
9 Moon Joon-hyun, “Hyundai Steel extends global sales network for eco-friendly steel,” The Korea Herald, July 15, 2024, https://www.koreaherald.com/article/3434885.
10 “2021 TCC ESG Report,” Taiwan Cement Corporation, page 15 https://www.tccgroupholdings.com/en/report/esg/report_2021_Full_Report.pdf.
11 “Taiwan Cement to boost stakes in Europe,” Taipei Times, November 29, 2023, https://www.taipeitimes.com/News/biz/archives/2023/11/29/2003809846.
12 “Woodside’s climate strategy is integrated throughout our company strategy,” Woodside Energy, December 31, 2024, https://www.woodside.com/sustainability/environment/climate.
13 EX-99.1., April 26, 2024, https://www.sec.gov/Archives/edgar/data/844551/000119312524194465/d878828dex991.htm.
14 CBAM to Drive Low-Carbon NH₃ Market: Woodside Q&A.” Argus Media, November 21, 2023, https://www.argusmedia.com/en/news-and-insights/latest-market-news/2638854-cbam-to-drive-low-carbon-nh3-market-woodside-q-a.
15 “JSW,” Ditch Carbon, updated February 2025, https://ditchcarbon.com/organizations/3033.
16 JSW Climate Action Report 2024. JSW Steel Ltd., 2024, p. 62, https://www.jswsteel.in/sites/default/files/assets/industry/steel/IR/CSR/Sustainability%20Reports/JSW-Climate-Action-Report-2024-23052024.pdf.
17 “JSW Plans Green Steel Unit for EU Exports.” Financial Express, April 18, 2024, https://www.financialexpress.com/business/industry/jsw-plans-green-steel-unit-for-eu-exports/3810704/.