The European Union should take greater account of the needs of developing and least developed countries (LDCs) in its implementation of the Carbon Border Adjustment Mechanism (CBAM), says the think-tank Europe Jacques Delors in a report to be published on Monday, to which Agence Europe had exclusive access. Its authors – Pascal Lamy, Geneviève Pons, Colette van der Ven and Cláudia Azevedo – look at ways of supporting trading partners affected by this new tool.
Many LDCs and developing countries see CBAM as a form of discrimination where their economies do not allow for rapid decarbonisation of their industries. Despite this context, “CBAM is here to stay”, as the four authors point out, and they put forward a number of suggestions to support the application of CBAM.
A first step would be to carry out assessments specific to each third country to identify its level of exposure and vulnerability to CBAM. This analysis would then be used by the Commission to fine-tune its support according to the needs identified.
Different personalised aid schemes have been identified: technical assistance for non-vulnerable countries that are highly exposed to CBAM, or support for the green transition for vulnerable countries that are not highly exposed to the impacts of CBAM, for example.
On the other hand, the EU should increase its financial aid to partners affected by CBAM, according to Europe Jacques Delors. This can be done through existing initiatives such as the Global Gateway, but also by setting up a specific, more clearly identifiable fund. It must be linked to income from CBAM certificates.
When the CBAM was drawn up, it was not possible to allocate revenue directly to the decarbonisation of vulnerable third countries, but, according to the co-author of the report and Vice-President of Europe Jacques Delors, Pascal Lamy, this does not prevent the EU from adding a line in its budget to support the transition of third countries and that the amounts more or less correspond to the CBAM’s revenues. “We believe this would send a clear signal that the EU cares about the problems it creates. And it would probably not change much in the budget”, Pascal Lamy told Agence Europe.
The report will be available on Monday on this page: https://aeur.eu/f/c03 (Original version in French by Léa Marchal)