| Working with suppliers and customers to decarbonise our world Successfully navigating the Carbon Border Adjustment Mechanism (CBAM) with speed and accuracy is of vital importance to the LoneStar Group and our customers. Lead by our in-house sales and procurement experts, we’re openly collaborating with external partners within our supply chain to accurately gather and deliver first-right-time CBAM data requirements. Our aim? To mitigate the multiple risks that this new regulation may present. Meeting the EU’s low carbon goals CBAM was introduced in October 2023 by the European Union (EU) to tax the production of carbon intensive goods entering the territory. Its goal is to encourage cleaner industrial practices in non-EU countries with a view to cutting emissions by at least 55% by 2023. CBAM therefore aims to ensure the carbon price of imports is equivalent to that of domestic production. Ultimately protecting the EU’s climate or domestic market objectives from carbon leakage; a scenario where production moves outside of the EU to avoid climate-related policies before untaxed goods are imported back in. CBAM covers imports of cement, iron, steel, aluminium, hydrogen, fertilisers and electricity with the potential for further expansion. Importers of these goods will be required by law to report the associated emissions and pay for CBAM certificates. The price of these will be linked to the carbon price under the Emissions Trading System (ETS). Reporting on a new reality As a supplier of several CN codes covered by this decarbonisation initiative, the LoneStar Group is responsible for delivering the correct CBAM data to our EU customers and importers. In a positive update, ~80% of our suppliers, including ~90% of our non-EU suppliers, now provide the required carbon emissions data to meet CBAM’s requirements. As the phased introduction of CBAM rolls out – reaching completion in 2026 – we continue to guide our trusted global supply chain to close any remaining data gaps, increase reporting accuracy and prepare them to manage any potential cost implications of the evolving policy. ‘Being compliant with CBAM is vital to our business. We can’t hide away from the fact that we’ve had to adapt quickly to the onerous reporting. We’re not alone in facing these challenges and we hold an unwavering commitment to delivering compliant information. In fact, we now see our expert understanding of CBAM and other regulations as a competitive edge for the LoneStar Group and our customers.’ Luke Brown. Group ESG Manager. The LoneStar Group. In-house expertise. Future opportunity Crucially, through our reporting rigour and existing experience of surpassing the needs of numerous global critical-industry compliance requirements, we’re able to ensure our downstream partners avoid any CBAM financial penalties or disruptive delays at borders. Whilewe recognise that the reporting of CBAM data is resulting in additional time, effort and associated costs relating to our products and services, CBAM and its muted 2027 UK equivalent does create new opportunity for us all. By scrutinising supply chains to seek preferable trade-offs between cost and carbon or working more closely with partners to understand their ESG strategies, the LoneStar Group is uniquely placed to exceed the economic and environmental requirements of international policy makers into the future. Learn more about our ESG and compliance expertise by contacting our Group ESG Manager Luke Brown today. |
Our CBAM Commitment
Our CBAM Commitment
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