Trade: Orgalim contribution to the Commission consultation on a possible Carbon Border Adjustment Mechanism – CBAM
Published: 28 October 2020
Policies & Issues: Trade, Energy & Climate
Orgalim has participated in a Commission consultation on a possible Carbon Border Adjustment Mechanism - CBAM, and this way contributed to building the EU’s future strategy on this important topic.
Orgalim supports the EU's climate ambition and the goal of carbon neutrality by 2050. To be successful for Europe’s industry, we are advocating for a level playing field. To that extent, we agree with the rationale behind potential carbon border adjustment measures. The main objective of a carbon border adjustment should be to fight climate change by avoiding carbon leakage while at the same time taking into account the competitiveness of carbon-lean industries. Therefore, such measures should also avoid carbon leakage from the EU to third countries. Also, it must not result in non-EU companies redirecting their exports, so that carbon-friendly production increases in the EU while carbon-intensive production is moved outside the EU; this would lead to no overall carbon reductions globally.
Even though we support the rationale, we question the workability of a possible Carbon Border Adjustment Mechanism (CBAM) for our sectors. There are, for example, many concerns about the high bureaucratic impact of the implementation and its costs, as it is very difficult to measure the carbon footprint of an imported complex product, taking into account both the carbon footprint of the final product and its components.
These are our key points with regard to the Carbon Border Adjustment Mechanism, as addressed in our consultation submission and our Position Paper (August 2020):
Trade is key for EU competitiveness - the CBAM should be designed in a non-protectionist way and respect the WTO rules, ensuring markets are, and remain, open for our industries.
A multilateral approach for the EU green agenda: coherence between EU trade and climate policies - article 6 of the Paris Agreement aims to promote an integrated, holistic and balanced approach that will help governments in implementing their National Determined Contributions through voluntary international cooperation. This cooperation mechanism, if properly designed, should make it easier to achieve CO2 reduction targets.
The cost of a Carbon Border Adjustment Mechanism for complex goods: call for impact assessment - we call on the Commission to work on a proper and comprehensive Commission impact assessment prior to its implementation, taking into account the wider impact on complex goods. Orgalim stands ready to contribute to this debate.
We remain engaged and committed to continue the collaboration going forward to shape a future that’s good for Europe, its citizens and its industry.
To read our response to the consultation in full, please download the document above.
Senior Adviser - Trade and Legal
Adviser - Energy and Environment