Danger Bells for Products with High Carbon Footprints: Which Markets are at Risk?

Carbon Intensive Products: Which Markets are at Strategic Risk?

The rules of competition in the global market are being rewritten by climate change and conscious consumer movements. Now, not only the price and quality of a product, but also its environmental footprint directly affects its commercial success. Especially "dirty" products with a high carbon footprint face serious risks in the international arena. So, which are the most risky markets for these products and why do they face the danger of being declared "undesirable"?

Top of the List: The European Market and the CBAM Factor

From a Turkish perspective, the biggest risk for high emission products is undoubtedly the European market. The main reason for this is the Border Carbon Adjustment Mechanism (CBAM), which we have discussed before. This mechanism simply says this: If a product you sell to Europe has high "embedded emissions", you will be subject to a fee, a carbon tax, when you pass through customs.

Europe has taken this step in order to protect its own conscious producers and prevent unfair competition. While a producer in Europe is investing and increasing its costs for environmentally friendly production, a company in another country is prevented from easily introducing a "dirty" product that it produces without following any rules.

This turns the European market into a double-edged sword:

• If you are prepared: If you produce low-carbon products, this could be a big advantage for you.
• If you are unprepared: If you don't know your carbon footprint and are not working to reduce it, it could turn into a risky area where you could lose your existing market completely.

The risk is not limited to Europe. Many developed countries and global brands are now making similar demands. In particular, similar data requests come from large companies in markets such as America and Australia.

Unwanted Products: Why Sales are at Risk

High-emission products are no longer only damaging the environment, but also direct sales. Conscious consumers are aware of their carbon footprint, the most important parameter of climate change. This audience now questions brands' sustainability claims and wants to see concrete steps.

At this point, companies with the following characteristics stand out:

• Transparent studies on carbon footprint,
• Set concrete mitigation and stabilization targets,
• Report their measurements transparently and accurately.

Companies that do not take these steps and do not have any environmental claims or commitments to offer to concerned consumers face serious problems. Customers can easily switch to another brand that works in this field and inspires confidence. Nowadays, not only price but also a brand's environmental and sustainability performance plays a decisive role in purchasing decisions.