Exporters warned of carbon standards

Published: 14/01/2010 at 12:00 AM

• Newspaper section: Business

Thai exporters must act to be ready to comply with upcoming stringent carbon standards to be imposed by the United States and Japan, a United Nations agency warns.The politicised concept of Border Carbon Adjustments (BCA) was proposed as a tool for policymakers in Thailand's major export markets to regulate carbon emissions between countries of unequal environmental standards.

BCA allows countries to apply a penalty in the form of a tariff or an obligation to purchase carbon credits on imports from countries which practice less stringent emission standards, according to the United Nations Industrial Development Organisation (Unido).

BCA could be quite expensive for Thai companies, especially SMEs (small and medium-sized enterprises), said Ayumi Fujino, head of the Unido regional office in Bangkok.

Technical capacity is another critical issue that needs to be taken into account for exporters to comply with such measures.

While the legality of BCA under the World Trade Organisation remains doubtful, the measure has been endorsed in Japan while it awaits legislative approval in the US. The European Union is also working on it, she added.

By increasing costs in imported materials for developing nations, the measure would force these nations lose a measure of their competitiveness in overseas markets.

The Thailand Greenhouse Gas Management Organisation (TGO) has called on Thai manufacturers to be aware of more intensified measures regarding carbon emissions following the UN's climate change summit in Copenhagen last December.

So far, 25 products have been approved to carry carbon footprint labels that detail carbon emissions for the life cycle of the items, including Thai Namthip soft drinks, Charoen Pokphand frozen foods, and Thai Airways International's in-flight menus, according to the TGO executive director, Sirithan Pairoj-Boriboon.

The agency has also granted 56 products a carbon reduction label, covering a wide range of goods such as cement, cans, vegetable oil, rice and condoms, he added.

The TGO and Unido have joined with the Federation of Thai Industries (FTI) to arrange a one-day seminar on Jan 20 to provide critical input for the Thai private sector and government agencies on policy responses to BCA.

The forum aims to raise awareness among the Thai export community and increase understanding of preparatory measures that must be taken to remain competitive in the changing global market.