Epsilon Archive for Student Projects

Abstract

This thesis seeks to investigate the potential effect the regulation of CBAM has on a manufacturing companies supply chain within the industry of construction equipment. Further, the aim is to explore whether the environmental regulation of CBAM hinders or drive competitiveness. A case study is conducted at Volvo Construction Equipment through several semi-structured interviews to better understand the effects the regulation has on a company’s strategic and operational activities throughout the supply chain. In addition, the research offers a case example of a component used at the manufacturing site, to explore the financial and environmental effects of the regulation. The study takes a qualitative and grounded theory approach to better understand the ongoing behaviours and patterns connected to environmental regulations. The findings are analysed through the lens of sustainable supply chain management theory as well as transaction cost theory. The analysis shows that CBAM can to some extent hinder competitiveness among companies operating in the EU compared to global competitors. However, the effects of the regulation on a firm’s competitiveness and innovation will mostly depend on the company’s approach, whether it is proactive or reactive. With a proactive approach to the regulation of CBAM and integration of it in a decision-making tool for sourcing decisions, the legislation, together with internal pressures, can trigger innovation.