Carbon tariffs are the next border restriction facing Australian exporters

  • Carbon Border Adjustment Mechanisms are now coming to fruition with one example expected to come into force by 2023 instigated by the EU.
  • The costs of slow or no action in preparing for such borders will be too high as it will likely mean Australian primary resources will be locked out of a major market
  • The question for governance and board professionals is how we adjust rapidly and in a meaningful way within the constraints of our business models.

It may not only be COVID–19 that is impacting our movements across borders. There are now signals from our international trading partners that may threaten Australia’s ability to export its produce because of borders now being proposed on importers. How Australian primary and extractive industries prepare for these, in concert with the development of agile government policies, are now becoming front and centre for businesses and their governance and risk professionals. Late last year, ABARES, released Insights 2020 which highlighted the opportunities that Australia agriculture has as a global contributor to food and fibre production in a world where net zero greenhouse gas emissions will become the norm, which is the purpose of the Paris Agreement. This article draws upon the insights from that report. Definitions referred to in the article are provided in Table 1.

The challenge of reducing greenhouse gas emissions is global. As countries plan trading with their partners to meet this challenge, the emissions intensity of products will increasingly become part of global trading rules. This creates risks and opportunities for Australia’s agricultural and mining exports.

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