CBAM and Plastics
5 May 2025
Driving a Sustainable Future for Injection Moulding
The Carbon Border Adjustment Mechanism (CBAM) is a ground-breaking policy designed to tackle carbon leakage, a phenomenon where businesses relocate production to regions with less stringent environmental regulations to avoid carbon costs. Currently, CBAM focuses on carbon-intensive basic materials like steel, cement, aluminium, fertilisers and hydrogen. But what if its reach extended to the plastic injection moulding industry? While not currently included, the potential benefits of such an expansion are significant, particularly in accelerating the circular economy and the use of recycled content.
Understanding CBAM
In essence, CBAM places a levy on imported goods based on the carbon emissions generated during their production. This creates a level playing field, ensuring that domestic industries committed to reducing their carbon footprint aren't disadvantaged by cheaper, more carbon-intensive imports. For the UK, this means incentivising cleaner production practices both domestically and globally.
Why Plastics? The Case for Expansion
The global plastics industry is a major contributor to greenhouse gas emissions, from the extraction of fossil fuels to the manufacturing and disposal of plastic products. Several factors make the inclusion of plastics within CBAM a logical progression:
- Feedstock Carbon Intensity: Many plastics are derived from petrochemicals, the production of which is highly carbon-intensive. By including plastics, CBAM could address the embedded emissions associated with these feedstocks.
- Growing Environmental Awareness: Consumer and regulatory pressures are mounting for greater sustainability in the plastics sector. Extending CBAM would align with these demands and incentivise lower-carbon alternatives.
- Lifecycle Emissions: As carbon accounting methodologies become more sophisticated, it's increasingly possible to quantify the lifecycle emissions of plastic products. CBAM could leverage this data to drive reductions across the entire value chain.
- Downstream Product Pressure: As CBAM matures, the pressure to include downstream products will increase. Plastics are used in a huge number of downstream products.
Accelerating the Circular Economy and Recycled Content
The extension of CBAM to plastics could have a profound impact on the circular economy and the use of recycled content:
- Incentivising Recycled Materials: CBAM could create a financial advantage for using recycled plastics, which typically have a lower carbon footprint than virgin materials. This would drive demand for recycled content and stimulate investment in recycling infrastructure.
- Promoting Eco-Design: Manufacturers would be incentivised to design products for recyclability and durability, reducing waste and minimising the need for virgin materials.
- Driving Innovation: The need to reduce carbon emissions would spur innovation in bio-based plastics, alternative materials, and more efficient manufacturing processes.
- Transparency and Traceability: CBAM would require accurate carbon accounting, which would lead to greater transparency and traceability in the plastics supply chain. This would enable consumers and businesses to make more informed choices.
- Reduced reliance on raw petrochemicals: The cost of virgin plastics would increase, therefore making recycled plastics a more economically viable option.
For plastic injection moulding companies like TEX Plastics, this potential shift presents both challenges and opportunities. By proactively embracing sustainable practices, investing in recycled materials, and adopting eco-design principles, they can position themselves as leaders in a low-carbon future.
In conclusion, while the extension of CBAM to plastics is not yet a reality, its potential benefits are clear. By putting a price on carbon, CBAM could accelerate the transition to a circular economy, drive innovation, and create a more sustainable future for the plastic injection moulding industry.