The Climate Friendly Materials (CFM) Platform collaborates with research institutions across eight EU countries in the development common policy action wit the goal of decarbonisation the European basic materials sector. Last year, the Climate Friendly Materials Platform proposed an innovative policy framework to support the decarbonisation of the basic materials sector in the EU.
This policy brief focuses on one major component of this package: introducing the climate contribution to compliment the free allocation in the EU Emissions Trading System. The climate contribution is a weight-based charge on consumption of carbon-intensive materials sold for final use in Europe. The charge is linked with the EU ETS, as its level it depends on the market prices of emission allowances and product benchmarks. To understand the benefits of introducing climate contribution, it is important to first identify the weaknesses of current policy mix.
The brief clarifies the concept and its place within a broader policy framework, and explains why it is a viable option to meet the policy objectives of Carbon Border Adjustment Mechanism in a way that has major advantages compared to alternative instruments focusing on border measures.