CBAM in a Portfolio of Measures for Industrial Decarbonization

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

Building on the previous work done in the process leading up to the adoption of CBAM in Phase I (2019-2020), Phase II (2020- 202), Phase III (2021-2022) of its project “Border Carbon Adjustments in the EU”, the European Roundtable on Climate Change and Sustainable Transition (ERCST) has extended its analysis of the evolving European Union Carbon Border Adjustment Mechanism (CBAM) into a fourth phase, providing decision makers and stakeholders with a better understanding of critical issues as the CBAM reaches its implementation phase. 

Phase IV of the ERCST project is intended to provide in-depth analysis of the implementation phase of CBAM as it progresses to its full operationalization, but also to look at the EU approach together with other instruments in the context of industrial competitiveness and decarbonized industry. 

The present report is the first in a series of four reports that together will form the fourth phase of the “Carbon Border Adjustment in the EU” project. Each of the reports provides in-depth analysis and reflection around issues identified as important at this stage in CBAM implementation. This first report covers the role of CBAM in a portfolio of measures for industrial decarbonization and how it compares to the evolving policy landscape abroad. 

The report is structured in four sections: The second part of the report looks at the objective of the CBAM, the third section presents the climate and non-climate related gaps in the function of the CBAM. The fourth section discusses the evolving competitive landscape and context, and the options to address gaps and ensure a level playing field.