The good, bad and ugly of CBAM implementation

As Europe’s Carbon Border Adjustment Mechanism (CBAM) enters its implementation phase this year, many EU businesses will begin facing carbon tariffs on imports, while importers grapple with a new and complex reporting burden.

While the mechanism is designed to prevent carbon leakage and create a level playing field between EU producers and foreign competitors subject to lower carbon prices, concerns are being raised about whether this will be achieved, as well as the far-reaching implications beyond the sectors it targets.

To unpack how CBAM works and explore whether its design is truly fit for purpose, Pamela Largue spoke with Jostein Røynesdal, Vice President and Head of EU Affairs at Hydro, and Hélène Lavray, Government Affairs Leader Europe for Climate & Energy at Dow. Both highlighted the complexity of the mechanism and warned of potentially serious trade implications.

In this episode of the Energy Transitions podcast, you will learn more about:

• Shortcomings of the current CBAM system and what can be done to fix it;
• What will change this year with the implementation of CBAM, what it means for importers and the resource shuffling that could arise;    
• The potential impacts of applying CBAM on electricity;    
• How CBAM could impact emissions allowances within the EU ETS and impact European producers;    
• The potential pitfalls of administering and reporting;     
• The impact of CBAM on developing nations and diplomatic relations;    
• Potential impacts on global trade.

LISTEN NOW

Jostein Røynesdal and Hélène Lavray will be speaking at European Industrial Energy Days in a panel discussion entitled, Carbon Costs and Competitiveness: What EU ETS and CBAM means for Industrial Energy Users. Register to meet them in person and join the conversation. 

Listen to previous episodes:

Leveraging long-term gas contracts and PPAs in a volatile market
Putting data at the heart of the DSO evolution

Read more about industrial decarbonisation:

How offshore wind can unlock a competitive EU steel industry
German steelmaker decarbonises with Iberdrola solar power