Shaping Beyond Borders: How the European Union’s Carbon Border Adjustment Mechanism (CBAM) influences Indonesia's Climate and Trade Governance

Details

Supervisors

Delreux, Tom

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en administration publique, à finalité spécialisée

Abstract

enIn 2019, The European Green Deal and its ambition to reduce carbon emissions by 50% in 2030 was announced. The plan contained several policies, one being the modernization of the ETS (European Trading System), which rules carbon pricing in the European Union (EU). This reform entails the end of free allowances and the creation of a Carbon Border Adjustment Mechanism (CBAM). This measure imposes a carbon tariff for certain goods entering the EU. The test phase began in 2023 and has already been widely discussed in literature; it will enter its final phase in January 2026 but will be fully implemented in 2027 due to the Omnibus simplification (Regulation (EU) 2025/2083, 2025). Indonesia, as a case study, is particularly relevant as two World Trade Organization (WTO) disputes were introduced regarding Nickel and Palm Oil. The country allows us to shed light on the Global South’s objections, claiming that some of the EU policies are wolves in sheep's clothing; environmental measures encouraged by a protectionist agenda. On the other side, the EU intends to act as a global catalyst for emission reduction by leveraging its regulatory power to raise climate ambitions beyond its borders. This thesis examines the extent to which the European Union's Carbon Border Adjustment Mechanism (CBAM) has prompted strategic adaptation in Indonesia's regulatory, diplomatic, and trade policies, and what this reveals about the EU's capacity to shape third-country behavior.