The Business for CBAM Coalition is concerned with the European Commission’s proposal for a Temporary Decarbonisation Fund that support is based on the full production of eligible sectors.
This causes several problems. Firstly, this means that a steel company exporting only 10% of its production could receive a similar level of support as a competitor exporting 90%, which doesn’t seem logical to us. Furthermore, it makes the measure a lot more expensive than if the support would only be given to actual exports. Certain lobby groups have criticised the narrow scope of eligible sectors covered, but this is entirely logical if all production needs to be supported.
We therefore propose to only focus support on the share of actual exported production. This allows the Commission to expand the number of eligible sectors. The Commission is concerned with WTO compatibility. To ensure this remains, we suggest providing a discount to the CBAM charge of imported goods that is equal to the support provided via the Fund.
We welcome that eligibility is limited to specific goods facing a heightened risk of carbon leakage and that the proposal clearly links support to concrete deliverables for long-term decarbonisation.
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