APPLiA's Digital Interviews: CBAM Update, where are we at?

The seventh episode of the APPLiA’s series of short digital interviews is now available. Our expert, Alvaro Vilas, provides the latest developments on the Carbon Border Adjustment Mechanism (CBAM) as part of the Fit for 55 package. 

 

Watch APPLiA's Seventh Digital Interview here.

In the context of the series of short digital interviews recently launched by APPLiA, the seventh episode features Alvaro Vilas, APPLiA Digital and Competitiveness Junior Policy Specialist

The Carbon Border Adjustment Mechanism is one of the most prominent proposals of the recent Fit for 55 package, a complete overhaul of EU energy and climate legislation to support the European Union’s commitment to reduce greenhouse gas emissions by at least 55% by 2030. What is the aim of this measure? “The proposal would introduce a levy on imports of specific products entering the EU, with the primary aim of tackling carbon leakage,” explained Mr Vilas. In this regard, the impact on industrial competitiveness is to be seen as an integral part to a successful implementation of the Mechanism. 

Indeed, “crucial for the European manufacturing industry is to analyse the impact of the current scope on production costs,” continued Mr Vilas, underlining the importance for the measure to be imposed not just on raw materials, rather on finished products. “In its current form, CBAM would only serve to strengthen manufacturing outside Europe and make foreign imports more competitive on the European market,” he noted. In turn, this would create on the one side an incentive for manufacturers to take their factories outside of Europe, generating a significant loss of European jobs, but also, on the other side, cause an increase in the cost of finished products as a result of an increase in the cost of raw materials. 

With this in mind, “Europe needs to undertake a multilateral approach in line with free trade rules of the WTO and in joint cooperation with world leaders like China and the U.S. towards a decarbonised economy, that would still preserve the Single Market, competition and innovation of all EU industries,” concluded Mr Vilas.

This and much more in APPLiA’s seventh digital interview, available at this link.