New framework balances EU carbon rules with data sovereignty

A new paper from Han-Teng Liao and Chang-Yi Kao tackles a pressing challenge: how global semiconductor supply chains can meet the EU's Carbon Border Adjustment Mechanism (CBAM) transparency requirements without sacrificing data sovereignty. The authors propose a RegTech reference architecture built on the International Data Spaces (IDSA) framework, which orchestrates trustworthy environmental telemetry across the semiconductor-petrochemical nexus. The framework distinguishes mandatory CBAM rules from voluntary Science Based Targets (SBTi) and Safe-and-Sustainable-by-Design (SSbD) frameworks, ensuring compliance without overexposure.

Applying the model to the Taipei-Penang technology corridor, the paper details how sovereign data exchange enables Digital Product Passports (DPPs) to drive Global Business Services (GBS) capabilities. It also integrates Agentic AI for autonomous compliance monitoring and FinTech green financing mechanisms. By turning upstream physical vulnerabilities into circular negative feedback loops, the architecture provides a scalable blueprint for global industrial clusters to achieve sovereign, sustainable, and transparent value chains.