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EU CBAM Could Hurt EU Industry, Limited Effect on Environment

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The positive effect of the European Carbon Border Adjustment Mechanism is likely to be a lot more limited for the environment, while it could deter the competitiveness of European industries according to analysis by the think tank Sandbag.

  • China and other countries may sell good to Europe made with renewables energies. While selling dirtier products elsewhere – which would allow manufacturers to dodge potential fees and benefit from any price increases connected to the stricter CBAM standards.
  • In addition, CBAM might also deter the competitiveness of the EU industry as firms in the bloc will have to pay for more of its emissions in coming years.
  • “CBAM might hurt industrial manufacturers based in Europe more than those based in third countries,” the report said, citing more expensive raw materials.
  • “Most imported finished goods are not covered by the CBAM at this stage,” the study said.
  • Overall, the volume of goods affected by CBAM will be small. For China, the law would apply to about €13.4bn of its almost €500bn in exports to the EU.
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The positive effect of the European Carbon Border Adjustment Mechanism is likely to be a lot more limited for the environment, while it could deter the competitiveness of European industries according to analysis by the think tank Sandbag.

  • China and other countries may sell good to Europe made with renewables energies. While selling dirtier products elsewhere – which would allow manufacturers to dodge potential fees and benefit from any price increases connected to the stricter CBAM standards.
  • In addition, CBAM might also deter the competitiveness of the EU industry as firms in the bloc will have to pay for more of its emissions in coming years.
  • “CBAM might hurt industrial manufacturers based in Europe more than those based in third countries,” the report said, citing more expensive raw materials.
  • “Most imported finished goods are not covered by the CBAM at this stage,” the study said.
  • Overall, the volume of goods affected by CBAM will be small. For China, the law would apply to about €13.4bn of its almost €500bn in exports to the EU.