Wednesday, 26 January 2022

Thank you for joining us for this webinar organised by the partners of the Climate Friendly Materials Platform (CFMP). It brought together experts, industry representatives, and policymakers to discuss how the carbon border adjustment mechanism (CBAM) can play its part in the Fit for 55 (F55) package and unlock climate-friendly investments at EU scale.

The event was chaired by Heleen de Coninck (Professor at Eindhoven University of Technology and Radboud University) and our speakers included:

  • Karsten Neuhoff (Professor at DIW Berlin & Technical University Berlin)
  • Bas Eickhout (Member of European Parliament)
  • Erika Mink (Head Government & Regulatory Affairs, Thyssenkrupp)
  • Marco Mensink (Director General, European Chemical Industry Council)

With the webinar, the CFMP partners offered a space to discuss an alternative design option for the CBAM, often referred to as the excise option (option 6 in the impact assessment by the EU Commission) or climate contribution.

Download background brief
Background

The current CBAM proposal has EU and global objectives, by addressing carbon leakage concerns and creating incentives for emission reductions and carbon pricing in third countries. This requires, that the specific carbon intensity of the production has to be reported and verified for all imports. This however implies that indirect emissions, exports and part of the value chain cannot be covered and triggers resource shuffling concerns. Hence some carbon leakage concerns remain, explaining the debate on the timing of the introduction of the approach.

What has changed since the proposal was introduced?

In the COP26 in Glasgow all major emitters have committed to climate neutrality – and the EU CBAM proposal may thus already have delivered its international objectives. Hence now the focus is shifting towards effective implementation, hence we want to explore if a CBAM design that focuses on EU objectives can be effectively designed (while not precluding the use of further instruments for international engagement).

How could the CBAM be structured instead?

The EU Commission already assessed in a support study and ? The EU Commission already assessed in a support study and impact assessment a CBAM design applying standardised carbon intensities to traded materials using existing excise structures. While this does not create international incentives, it does allow for coverage of exports, the value chain, indirect emissions, and a broader set of materials.

Using existing frameworks and avoiding the need of international tracing of materials would allow for fast and reliable implementation. It ensures an effective carbon price signal while addressing carbon leakage concerns to unlock climate-friendly industry investments at EU scale.