A report by think tanks Sandbag and E3G that was commissioned by Energy Foundation China and published on Tuesday, 31 August, reveals that the Carbon Border Adjustment Mechanism (CBAM) would have a low impact on importers.
The authors believe that importing companies will pass CBAM costs on [to consumers] in the price of products. “The net CBAM cost for importers, which factors in the recovery through higher market prices, is significantly lower than the CBAM fees. Overall, the total net CBAM cost should barely reach €1.0 bn in 2026 and €1.6 bn in 2035 across imports from six major trading partners”, the report’s authors indicate.
Russia is the country that the CBAM as currently proposed will affect the most—with an expected cost of €1.9 billion in 2035 (€602 million after passing costs on in selling prices). According to Sandbag and E3G, this is a rather low cost considering the EU’s total imports from Russia amount to €91.4 billion.
The report indicates that too few sectors are covered by the current CBAM proposal. The authors wrote, “Overall, the current design of the proposed CBAM with a narrow sectoral and emissions scope [...] suggest that the proposal aims more at triggering concerted international action than resolving carbon leakage singlehandedly”.
See the report: https://bit.ly/3mPDAUe (Original version in French by Léa Marchal)