As the European Union (EU) heightens its climate ambitions, there are increasing regulations related to "carbon leakage." This phenomenon occurs when EU-based companies shift carbon-intensive production to countries with less strict climate policies, potentially increasing emissions. To address this, the EU has introduced the Carbon Border Adjustment Mechanism (CBAM), an environmental regulation designed to establish a fair price for carbon emissions associated with the production of carbon-intensive goods entering the EU. Its purpose extends to encouraging cleaner industrial practices in non-EU countries. 

Goods Covered in the Initial Phase: 

The CBAM's scope encompasses products like cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen in the transitional phase. Moreover, there are plans to evaluate the possibility of expanding the range of covered products by 2030, potentially including additional sectors. 

Impacts: 

• Importers must carefully track and report emissions data for their imported goods. The European Commission is developing IT tools to help importers report and manage this data. 
• Non-compliance with reporting requirements may result in financial penalties. 
• The regulation introduces an additional layer of complexity in the import process. 

Timeline: 

As the CBAM unfolds between 2023 and 2035, it will have significant implications for industries, global competitiveness, and the fight against climate change. Here are some key dates to keep in mind: 

• October 1, 2023: The CBAM enters its transitional phase. Importers of carbon-intensive goods begin reporting embedded greenhouse gas (GHG) emissions. 
• January 31, 2024: The first reporting period for importers concludes. Flexibility in reporting methodologies is allowed. 
• January 1, 2025: Reporting using only the EU method becomes mandatory. 

Benefits: 

• Importers disclosing emissions data enhances transparency about the carbon impact of goods. 
• The regulation incentivizes importers to choose lower-emission products, driving sustainable choices. 
• Imported goods are subject to emissions reporting similar to domestically produced goods, leveling the playing field. 
• The regulation raises awareness about carbon emissions associated with international trade. 

How Can JAS Support You? 

• EU Import Customs Clearance: Our team of customs experts consult you and assist you in expediting the customs clearance process and the complexity of tariff codes, duties, taxes, and international trade regulations.* 
• EU Regulation Monitoring: We keep you informed about CBAM updates and evolving regulations, ensuring you remain compliant and adaptable to changes. 

*The importer is at all times responsible for providing all documentation related to customs clearance, including correct shipment/tariff and emission-related data. 

As part of ongoing efforts to combat climate change, the European Union (EU) has extended the Emissions Trading System (ETS) to include CO₂ emissions from all large ships entering EU ports. Starting in January 2024, this move will hold shipping companies accountable for their carbon footprint, fostering energy efficiency and incentivizing low-carbon solutions within the maritime logistics industry.

Inclusion of Maritime Emissions in the EU ETS:

In May 2023, the EU officially adopted amendments to the ETS Directive and the Regulation on the Monitoring, Reporting, and Verification (MRV) for maritime transport. These amendments will integrate maritime emissions into the ETS, encompassing 50% of emissions from voyages starting or ending outside the EU and 100% of emissions between two EU ports or when ships are within EU ports. This step will apply to all large ships of 5,000 gross tonnage and above, irrespective of their flag.

Transition Period and Compliance:

To facilitate a smooth transition, shipping companies will gradually be required to surrender emission allowances for a portion of their reported emissions:

• In 2025, they have to surrender allowances for 40% of their emissions reported in 2024.
• In 2026, the percentage will increase to 70% for emissions reported in 2025.
• From 2027 onwards, they must surrender allowances for 100% of their reported emissions.

Impact on the Maritime Logistics Industry:

• Compliance Costs and Financial Implications: Companies will face extra expenses as they are now required to purchase and sell emission allowances. In order to stay within their allotted allowances, substantial capital investments will be necessary for the adoption of emission-reducing technologies and sustainable fuel alternatives.
• Operational Adjustments: Shipping companies must optimize vessel routes, reduce idle times, and adopt slow steaming practices to align with emission reduction targets. This will require careful planning and coordination to maintain the efficiency and effectiveness of supply chain logistics.
• Market Competitiveness and Differentiation: Companies embracing sustainable practices will gain a competitive edge as eco-conscious customers and businesses are increasingly prioritizing environmentally responsible shipping solutions.
• Collaboration and Information Sharing: Close collaboration with authorities, port operators, and stakeholders will help ensure accurate emission reporting and progress monitoring.

Conclusion:

Including maritime emissions in the EU Emissions Trading System marks a significant shift for the maritime logistics industry. While compliance with the regulation will present challenges, it also creates opportunities for the sector to embrace sustainability, foster innovation, and collaborate effectively to contribute to a greener future.

JAS Indonesia, in partnership with the Bruni Foundation, marked International Literacy Day (ILD) by organizing the "Book Donations for World Literacy Day" event on September 8, 2023. Led by JAS Sustainability Ambassador Sigit Yulianto, this event exemplified the team's dedication to championing literacy as a fundamental human right and their commitment to positively impacting the community.

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Held at a local school, the ILD event showcased the incredible potential of collective community action. Its success was driven by a joint effort: prior to the event, the JAS office initiated a book donation campaign among its employees, and a group of JAS Indonesia colleagues volunteered to represent JAS at the local school. However, the event went beyond mere book donations; the team also shared food, drinks, and moments of joy, fostering an atmosphere of unity that enriched the day.

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The teams' actions serve as a reminder that when individuals and organizations unite for a common purpose, they can create positive change. Literacy is not merely about reading; it is a pathway to a brighter future for all.  

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The Sustainability Ambassadors at JAS play a key role in spearheading and executing sustainability initiatives. They are driven by a passion for creating a more sustainable organization and work closely with the Worldwide sustainability team and key stakeholders. Their expertise and influence serve as catalysts for transformation, inspiring and guiding others to contribute to a greener and more inclusive future.  

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International Literacy Day has been observed globally on September 8 since 1967, emphasizing the significance of literacy as a basic human right. It also serves as a call to advance progress towards achieving Sustainable Development Goal 4 (SDG4) on education and lifelong learning.

This notice serves as a reminder of the yearly Golden Week holiday in China.  

What is Golden Week?  

September 29 - October 6, 2023 is the annual Golden Week in China, China's National Day Holiday week, to celebrate the birth of the People's Republic of China. During this week, ceremonies and other events take place throughout China.   

During this time, factories typically close, and production is halted or limited. In addition, airlines, shipping companies, railway, and commercial operators also typically limit their activities or run-on skeleton crews during these days.  

How can I reduce the impact of Golden Week on my Supply Chain?  

• Maintain clear and open communication so that we can work with you to find the solution that best fits your needs  
• Book as early as possible. The earlier you book, the greater the chance that you can secure shipping space.  
• Note what shipments are most urgent so they can be given priority   

If you have any questions or concerns, please reach out to your JAS representative.