One of the most critically important issues concerning CBAM, yet to be resolved, is the question of how to compare the level of effort in third countries’ climate policies to that of the EU, in order to determine crediting against the CBAM. The US, for example, has embarked on a suite of transformational climate-related initiatives under its Inflation Reduction Act (IRA), but employing subsidies rather than pricing.

The IRA is a particularly salient example of evolving circumstances that invite further thinking about the CBAM’s elaboration and implementation. As well as the question of whether to credit for equivalent effort, the IRA’s heavy subsidization may have relevance for the CBAM’s design in the area of export rebates, timeline of implementation, and roll-back of free allocation.

Other current events also have relevance. Many European industrial sectors were already struggling with long-term competitive challenges but are now also facing unprecedented costs because of the Russia-Ukraine war and longer-standing supply chain disruptions. Are these evolving challenges grounds for rethinking aspects of CBAM, or for an increasing focus on parallel supporting industrial policies?

Considering these policy questions, this roundtable discussion brought together global experts in the areas of economics, law, and policy to assess existing proposals of how to treat non-pricing policies in the EU CBAM.

Agenda