Company and sector profile Contemporary Amperex Technology Co., Limited (CATL) is a global leader in the lithium-ion battery sector and green transition. However, its energy-intensive manufacturing and complex global supply chains create significant carbon exposure. Two-thirds of the world’s cobalt is mined in the Democratic Republic of the Congo, and nearly two-thirds of nickel originates from Indonesia.44 CATL was selected to illustrate how a market leader navigates the pressures of global decarbonization. The lithium-ion battery sector is a linchpin of the global energy transition. However, battery production itself has a significant carbon footprint, driven by the carbon intensity of the local electricity grid. The sector faces layered regulations, including BCAs targeting materials and the EU’s forthcoming “battery passport”,45 which will mandate detailed carbon footprint declarations. Business exposure and response CATL’s primary exposure is indirect. While batteries are not currently covered by the CBAM, key upstream materials, such as aluminium and steel, are. As an importer of Chinese-made components for its European facilities, CATL is responsible for compliance. According to the company’s carbon accounting reports, the proportion of its total carbon footprint originating from Scope 3 has shown an upwards trend, accounting for the significant majority of total emissions in recent years. Although precise data on the share of aluminium and steel in the value- added of batteries is limited, their presence in production inputs underscores the indirect exposure risk.Challenges include complex compliance and difficulties in obtaining accurate emissions data from upstream suppliers. The company emphasizes that BCA policies must be fair and impartial, ensuring a reasonable distribution of carbon responsibility and benefits across the supply chain so that upstream and downstream actors are both incentivized to reduce emissions.CASE STUDY 2 China – CATL Strategic responses –Strong corporate governance: A dedicated team manages carbon issues with regular oversight from the board and senior management, supported by investment in digital carbon accounting infrastructure. –Strategic localization: Establishing manufacturing bases in key markets such as Germany and Hungary helps avoid potential EU CBAM liabilities on finished goods and reduces transportation emissions. –Supply chain decarbonization: The “CREDIT” programme, a sustainability audit and capacity-building system, engages CATL’s vast network of suppliers on emissions reduction and data reporting. –Market-based solutions: While batteries are not directly covered by the ETS in China, CATL is indirectly exposed through its electricity consumption and upstream suppliers. The company has also participated in the national voluntary carbon market, the China Certified Emission Reduction (CCER) programme. Climate and Competitiveness: Border Carbon Adjustments in Action 13

Climate and Competitiveness Border Carbon Adjustments in Action 2025