The issues of carbon leakage and competitiveness have always been a major preoccupation for policymakers and stakeholders involved in the debate on decarbonisation and meeting the international commitments on climate change.
The EU institutions have adopted the ambitious target of reaching climate neutrality by 2050. This has led to increased interest, and urgency, in examining options to address the risk of carbon leakage and one of the tools that could address this risk is the EU Carbon Border Adjustment Mechanism (CBAM).
The EU CBAM is a mechanism that seeks to address the risk of carbon leakage by imposing a carbon price on imports of certain carbon-intensive goods from outside the EU, such as iron and steel, cement, fertiliser, aluminium and electricity.
Since 2019, ERCST has built up solid experience on BCAs, carbon leakage issues, and other competitiveness topics in the EU context. ERCST provides analytical input and fosters an informed debate with domestic and international stakeholders as the CBAM file progresses through the legislative process.
Specifically, ERCST has organised meetings with stakeholders and experts, international town hall meetings with EU’s main trading partners, provided analysis of input to the EU’s stakeholder consultation process and published several reports on this topic.
The two main research arms of this workstream are:
- Carbon Border Adjustments in the EU – Phase I, II, III and IV
- The Economic Impacts of an EU Carbon Border Adjustment Mechanism
The Carbon Border Adjustments in the EU project is supported by BDI, CEFIC, Enel, Eurofer, Eurometaux, Fertilizers Europe, FuelsEurope, HeidelbergCement, the Government of France, the Government of Germany, the Government of Spain, Metinvest, Solvay and the Finnish Innovation Fund Sitra.
Part I of ERCST’s project on Border Carbon Adjustments in the EU was launched in 2019 and aimed at providing analytical input to the discussion on BCAs and fostering an informed debate with domestic and international stakeholders as the CBAM file progressed through the early stages of the legislative process. The concluding report of the project, entitled “Border Carbon Adjustments in the EU: Issues and Options” was published in 2020.
In 2021, as Part II of the project, ERCST continued providing: analysis and solutions for addressing carbon leakage and competitiveness issues; independent evaluation of EUs work on the CBAM file; accompany the EUs official stakeholder consultation process by providing a forum for multi-stakeholder engagement.
Building on the successful track record and favourable reception of Phase I (2019-2020) and Phase II (2020-2021) of the project, ERCST is extending its groundbreaking analysis and outreach work on the evolving EU CBAM into a third Phase. With the support from a consortium of funders from the public and the private sector, ERCST will continue to accompany the policy discussion in Brussels and beyond, providing decision-makers and stakeholders with a better understanding of critical issues and options as this file advances through the legislative process.
- Treatment of Exports in the EU CBAM
- Indirect Emissions in the EU CBAM
- International Cooperation on BCAs
- CBAM: Aligning the Design with Evolving Circumstances
2023 will be an important year for the CBAM. With a formal proposal issued by the European Commission in 2021 and principal design parameters agreed during the informal tripartite meetings – the trilogue process – with the European Parliament and Council in 2022, the CBAM is expected to advance to the implementation phase in 2023. As it did during the preceding phases, ERCST will carefully monitor and facilitate an informed discussion on each step towards full operationalization of the CBAM.
Building on the experience and visibility ERCST has acquired through its work on CBAM to date, the objective of Phase IV of the project “Border Carbon Adjustments in the EU” will be to provide continued analytical input, convening, and outreach on the CBAM.
The objective of this work is to carry out an exercise to estimate the economic costs that an EU CBAM could potentially impose on foreign exporters of selected carbon intensive products (e.g. cement, aluminium, steel) to the EU market.
In 2020, ERCST undertook work to quantify the additional tax burden that an EU CBAM could impose on exporters of steel, aluminium, cement and electricity in the Russian Federation and South Africa. Building on this work, ERCST carried in 2021 a similar exercise for an additional set of countries, including but not limited to South East Asian countries.
CBAM in a Portfolio of Measures for Industrial DecarbonizationSara SvenssonAuthor(s): Andrei Marcu, Elena Bonfiglio
The inclusion of hydrogen in the EU CBAMAntonio FernandezAuthor(s): Andrei Marcu, Michael Mehling, Aaron Cosbey, Olivier Imbault, Antonio Fernandez
CBAM Report: Aligning the Design with Evolving CircumstancesAntonio FernandezAuthor(s): Andrei Marcu, Michael Mehling, Aaron Cosbey, Alexandra Maratou, Anita Vollmer
International Cooperation on BCAsAntonio FernandezAuthor(s): Andrei Marcu, Michael Mehling, Aaron Cosbey, Alexandra Maratou, Anita Vollmer
Indirect Emissions in the EU CBAMelenaAuthor(s): Andrei Marcu, Michael Mehling, Aaron Cosbey, Alexandra Maratou, Anita Vollmer
Treatment of Exports in the EU CBAMAntonio FernandezAUTHOR(S): Andrei Marcu, Michael Mehling, Aaron Cosbey, Alexandra Maratou
Addressing “Crunch Issues” in the EU CBAM: A Review of the ENVI Committee Rapporteur’s Draft ReportAntonio Fernandez 10 January, 2022 AUTHOR(S): Andrei Marcu, Michael Mehling, Aaron Cosbey, An assessment of the amendments suggested in ENVI draft report can only occur against the broader context and the challenges...
Addressing Carbon Leakage in the EU: Making CBAM work in a Portfolio of MeasuresAntonio FernandezAUTHOR(S): Andrei Marcu, Michael Mehling, Aaron Cosbey, Alexandra Maratou and Dariusz Dybka
ERCST’s survey on the EU CBAM proposalAlexandra MaratouAUTHOR(S): Alexandra Maratou, Andrei Marcu
EU CBAM Brief for Policy MakersAntonio FernandezAUTHOR(S): Andrei Marcu, Michael Mehling and Aaron Cosbey
ERCST Guide to the EU CBAMAntonio FernandezAUTHOR(S): Andrei Marcu, Michael Mehling, Aaron Cosbey and Alexandra Maratou
The EU Carbon Border Adjustment Mechanism (CBAM) – Preliminary Analysis of the EU Commission ProposalAntonio FernandezAuthor(s): Andrei Marcu, Alexandra Maratou, Aaron Cosbey, Michael Mehling
The aluminium value chain and implications for CBAM designmklabAUTHOR(S): Alexandra Maratou and Andrei Marcu
Update on developments in the international jurisdictions on the Border Carbon Adjustments – part 3mklabAUTHOR(S): DOMIEN VANGENECHTEN, ANDREI MARCU, JEAN-YVES CANEILL AND THOMAS MERTENS
Preliminary Study on the economic impact that EU CBAM could potentially impose on foreign exporters of products to the EU market – Thailand, India, and VietnammklabAUTHOR(S): DOMIEN VANGENECHTEN, ANDREI MARCU, JEAN-YVES CANEILL AND THOMAS MERTENS
Recommendations on Funding Mechanisms in the Revised EU ETSmklabAUTHOR(S): DOMIEN VANGENECHTEN, ANDREI MARCU, JEAN-YVES CANEILL AND THOMAS MERTENS
Border Carbon Adjustments in the EU: A Policy ProposalmklabAuthors: Andrei Marcu and Michael Mehling
Ensuring the Acceptability of Border Carbon AdjustmentsmklabAuthors: Andrei Marcu and Michael Mehling
Border Carbon Adjustments in the EU: Sectoral Deep DivemklabAuthors: Andrei Marcu, Aaron Cosbey, Michael Mehling
Update on developments in the international jurisdictions on the Border Carbon AdjustmentsmklabAuthor(s): Andrei Marcu, Dariusz Dybka
Summary of stakeholder responses to the public consultation for a border carbon adjustment in the EUmklabAUTHOR(S): ANDREI MARCU, DARIUSZ DYBKA AND ALEXANDRA MARATOU
Position Paper – ERCST’s rationale for the submission to the Public Consultation for the Border Carbon Adjustment Mechanism under the European Green DealmklabAUTHOR(S): ANDREI MARCU, DARIUSZ DYBKA AND ALEXANDRA MARATOU
Border Carbon Adjustments in the EU: Issues and OptionsmklabAUTHOR(S): ANDREI MARCU, MICHAEL MEHLING AND AARON COSBEY
Reflections on ERCST’s “Creating markets for low-carbon products in the EU” work streammklabAUTHOR(S): ANDREI MARCU AND MATTEO CASPANI
Feedback paper – Inception Impact Assessment on the 2030 Climate Target PlanmklabAUTHOR(S): ANDREI MARCU AND DARIUSZ DYBKA
Feedback paper – Inception Impact Assessment on the Carbon Border Adjustment MechanismmklabAUTHOR(S): ANDREI MARCU, DARIUSZ DYBKA AND ERIC WILCZYNSKI
RECENT AND UPCOMING EVENTS
Launch of the ERCST Guide to the EU CBAM27 27+01:00 September 27+01:00 2021 @ 13:00 - 15:00
Cooperation on Border Carbon Adjustments18 18+01:00 October 18+01:00 2021 @ 14:00 - 16:00
Paper launch: framework for the CBAM policy tools15 15+01:00 December 15+01:00 2021 @ 14:00 - 16:00
Border Carbon Adjustment in the EU: EP draft position12 12+01:00 January 12+01:00 2022 @ 14:00 - 16:00
CBAM Global Townhall 202222 22+01:00 February 22+01:00 2022 @ 14:00 - 16:30
Border Carbon Adjustment in the EU – CBAM Scope 2 emissions2 02+01:00 March 02+01:00 2022 @ 15:00 - 17:00
Development impact of EU’s CBAM16 16+01:00 March 16+01:00 2022 @ 15:30 - 17:00