We support the European Commission’s proposal to consistently monitor risks and react appropriately when there is a clear circumvention case. We appreciate the proposed measures to address abusive practices by 1) adding reporting requirements where there is a high risk of abuse and by 2) introducing additional conditions to be fulfilled for the use of actual verified values relating to specific cases of goods, as well as evidence demonstrating that the abusive practices have not materialised. These are proportionate measures that reinforce the safeguards of the mechanism.
1. Keep CBAM an environmental tool
It is important that countries who get penalised because of abusive practises have a route out of additional conditions when such practices cease to exist. We therefore propose a route to get rid of the aforementioned additional conditions for market economies where industry is subject to carbon costs equivalent to at least 75 % of those resulting from the EU ETS in the relevant year.
2. Identify and act against additional circumvention routes
A risk of abusive practices that has not yet been covered in the Commission proposals exists where third countries use revenues from their own carbon pricing mechanisms to reimburse, without conditions via a backdoor, installations covered by those schemes. Such practices would nullify the effects of the carbon pricing mechanism. We propose that carbon pricing mechanisms allowing such reimbursements without decarbonisation conditions should not be eligible for reductions in CBAM obligations.
About the Business for CBAM Coalition
The Business for CBAM Coalition brings together businesses and business associations committed to upholding the ambitions of the Carbon Border Adjustment Mechanism (CBAM) and consequently of the EU Emissions Trading System (ETS). These policies are essential – not only for the EU’s path to cost-effective decarbonisation, but also for securing the long-term competitiveness of European industry in a rapidly evolving global economy.
Contact the secretariat via info@businessforcbam.eu