CBAM efficiency at covering complex products and complex
value-chains is still to be demonstrated.
In 2021, the European Commission presented a proposal to introduce a carbon border adjustment mechanism (CBAM) next to the EU Emission Trading Scheme (EU ETS). The mechanism is meant to ensure that the prices of imported goods reflect their carbon content. Under this proposal, importers must surrender carbon certificates corresponding to the carbon price that would have been paid had the goods been produced under the EU’s carbon pricing rules (EU ETS).
Why is it important
Although the European Commission’s CBAM proposal does not include the continuous filament glass fibre products, these could be covered in a revision of the scope. The CBAM has been initially designed to include non-complex products with a high trade exposure. Provided the mechanism can efficiently cover more complex products and complex value-chains, the CBAM could be an effective instrument to promote climate efforts globally while providing a carbon price signal on the EU market.
A number of uncertainties surround the CBAM, in particular its applicability to all industrial sectors, and its impacts. Therefore, Glass Fibre Europe is of the opinion that the legislator should review several aspects in the initial proposal:
– Perform prior in-depth assessment of the CBAM applicability, efficiency, and its impact on a sector before its inclusion
– Provide for effective tools to prevent opportunistic trade flows
– Maintain the allocation for free allowances to a newly covered CBAM sector as long as the efficiency of the CBAM has not been demonstrated for that specific sector, and introduce export adjustments alongside the gradual phase-out of free allocations