Border Carbon Adjustments in the EU

Background

As part of the European Green Deal, implementation of a BCA is once again being considered as a measure to address carbon leakage. According to the roadmap for the European Green Deal, a proposal for a BCA for “selected sectors” will be released in 2021. So far, we can only speculate what such a BCA might look like, as few policy details have been released. Given the resurgence of discussions about BCAs on the EU political agenda, it is an opportune time to have a closer look at the various available policy design elements and options, along with the associated environmental, economic, political and legal implications, in order to better understand what form of BCA might work for the EU.

On March 18, ERCST presented the Sectoral CBAM Report with a deep dive into the specificities of individual sectors as well as chapter synthetizing the findings to a general CBAM Design. According to the roadmap for the European Green Deal, and European Council conclusions from July, a proposal for a BCA for “selected sectors” will be released in 2021 and should be introduced by the end of 2022.

This report delves into a CBAM Proposal with the optimal options for the general CBAM Design. This report is the second in a series of fours reports that will be published during the 2nd part of ERCST’s project on Border Carbon Adjustments in the EU.The first part of the BCA in the EU project culminated in a report published in September on the issues and options for introducing a BCA in the EU.

Additional

Andrei Marcu Canada WTO presentation March 4th, 2021