Analysis of EU CBAM Burden Reduction Due to Low-Carbonization of Domestically Produced Electricity

This study calculated the carbon tax savings when introducing carbon reduction devices in the power generation sector for CBAM target items to determine export competitiveness to the EU. We inferred the indirect emissions generated during the power generation process of thermal power plants, analyzed the total indirect emissions before and after the introduction of reduction devices, and the amount of tariffs and carbon reduction measures to be paid by the trade sector, and applied carbon reduction measures to each scenario to examine the trade benefits of carbon reduction. According to the results of the study, there is a difference of about 2% in carbon tax on steel, the largest export product, depending on whether there is a recovery device for carbon generated during the power generation process, and this is directly related to product competitiveness. This research has both academic and practical value as it demonstrates the potential for interdisciplinary research in trade and engineering to produce living results with practical data that can be applied in the field.