Summary
The chemical sector, due to its high energy and trade intensities, faces significant risks of carbon leakage. Effective carbon leakage prevention remains essential for the chemical industry’s transformation towards climate neutrality. In this position paper, 爱游戏中国官方网站 recognises the role the Carbon Border Adjustment Mechanism (CBAM) proposal could play for the EU chemical sector, given four conditions are met.
爱游戏中国官方网站 calls for:
- Indirect Carbon Costs: The CBAM should reflecting all current and future ETS-related carbon costs in products and particularly the expected rise in indirect carbon costs due to the electrification strategy of the EU.
- Comprehensive Value Chain Coverage: CBAM needs to include all chemical industry value chains to prevent circumvention and safeguard competitiveness throughout the production process.
- Export Competitiveness: Provisions such as continued free allocation are essential to maintain the EU chemical industry’s competitive export position and avoid carbon leakage.
- Feasible and effective functioning mechanisms: To identify possible challenges early, a stakeholder process involving customs, the proposed CBAM authority and industry would be helpful identifying bottlenecks regarding data availability, methodologies, adequate customs procedures, for which alternative approaches may need be explored.