The Federation of Korean Industries(FKI) has assessed that the Carbon Border Adjustment Mechanism(CBAM) and mandatory supply chain due diligence pursued by the European Union(EU) could increase the burden on South Korean companies.

The FKI disclosed the assessment during a breakfast meeting attended by the EU’s Ambassador to South Korea Maria Castillo Fernandez and officials from South Korean companies, including SK nexilis, Samsung Electronics, POSCO and Hyundai Motor. 

The CBAM, widely regarded to be the world’s first carbon border tax, aims to impose costs on goods imported to Europe if they emit more carbon than locally-produced ones.

The FKI requested that the EU actively reflect South Korea’s views in the process of legislating the CBAM so as to minimize possible burdens on South Korean businesses. 

The FKI also made a similar request regarding the EU mandatory legislation on due diligence which seeks to ensure respect for human rights and the environment throughout the entire supply chain.

In response, the EU ambassador said that the EU and South Korea are global leaders in the fields of green and digital transformation, adding that that the EU will seek out new opportunities by boosting its partnership with South Korea in those areas.