CBAM shall reduce carbon leakage by encouraging producers in non-EU countries to green their production processes.
EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU’s carbon pricing rules.
If a non-EU producer can show that they already paid a price for the carbon used in the production of the imported goods in a third country, the corresponding cost can be deducted for the EU importer.
Concerned products:
- iron and steel,
- cement,
- fertilizer,
- aluminum and
- electricity generation.
A simplified CBAM system, where importers will have to report emissions embedded in their goods without paying a financial adjustment will apply as from 2023 for selected products with the objective of facilitating a smooth roll out and to facilitate dialogue with third countries.
Once the definitive system becomes fully operational in 2026, EU importers will have to declare annually the quantity of goods and the amount of embedded emissions in the total goods they imported into the EU in the preceding year and surrender the corresponding amount of CBAM certificates.
Consequences for the local economy:
- Emissions reporting for concerned products for deliveries into EU (2023)
- Need to purchase emissions certificates
- Increased Competition of non-EU producers in non-EU markets
More information:
Carbon border and Western Balkans – barrier or bridge to EU? (balkangreenenergynews.com)
Leave a Reply