LCA and CBAM

Life Cycle Assessment (LCA) and the Carbon Border Adjustment Mechanism (CBAM) are two distinct but increasingly interconnected tools in the realm of environmental regulation and climate policy. LCA is a methodology used to assess the environmental impacts associated with all the stages of a product's life from raw material extraction through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling. By evaluating the cumulative environmental effects of products or services, LCA helps in identifying areas for improvement and supports sustainable decision-making. CBAM, on the other hand, is a policy tool designed to level the playing field for domestic producers subject to carbon pricing and competitors from countries with less stringent greenhouse gas emissions rules. It aims to prevent carbon leakage by imposing a carbon price on imports of certain goods from outside a region or country, matching the carbon price that would have been paid had the goods been produced under the importing country's more stringent carbon constraints. Together, LCA and CBAM represent a comprehensive approach to understanding and mitigating the environmental impacts of products and industries. LCA provides the detailed environmental impact data necessary for informed decision-making, while CBAM ensures that such decisions are reflected in the market, encouraging global adoption of lower-carbon practices.