REPORT: Border Carbon Adjustments in the EU: Issues and Options

Date: 30 September 2020

Author(s): Andrei Marcu, Michael Mehling and Aaron Cosbey


As part of the European Green Deal (EGD), the European Commission is currently elaborating a legislative proposal for a Carbon Border Adjustment Mechanism (CBAM) to prevent greenhouse gas emissions leakage and level the playing field between European and foreign emitters.

This report brings together the main takeaways from the project ‘Border Carbon Adjustments (BCAs) in the EU: Issues and Options’ launched in November 2019 to provide analytical input and foster an informed debate with domestic and international stakeholders as the CBAM file progresses through the early stages of the legislative process.

Drawing on extensive feedback obtained in a series of stakeholder consultations, the report offers a detailed analysis of the building blocks of BCAs as a policy option in the European context, discusses alternative policy options, and considers different combinations of policy instruments to achieve the desired outcomes.

The report applies a heuristic multi-criterion analysis to BCAs and breaks this policy instrument down into eight design elements, each with several implementation options. These options are assessed on the basis of five evaluation criteria: environmental benefit; competitiveness benefit; legal feasibility; technical and administrative feasibility; and political and diplomatic feasibility.

 

This report is one of the deliverables of ERCST's project "Border Carbon Adjustments in the EU: Issues and Options”, which was made possible by support from Enel, Eurofer, FuelsEurope, the Government of France, the Government of Germany, HeidelbergCement, Metinvest, and Solvay.